Think about every time that you sign into Amazon to make a purchase.
If you’re like a lot of Amazon shoppers, you have your password and payment information as well as your shipping address stored. You can log in and make a purchase in as little as one or two clicks, the experience is smooth and pleasant.
Now think about making a purchase from a site that you’ve never used before. Not only do you have to dig around for the product you want to purchase, but you also have to enter your credit card and shipping address, and in many cases create a brand new account with a new, strong password.
The path to purchase is longer, and there are more opportunities to change your mind. When we talk about customer loyalty and the importance of customer retention, this is what we’re talking about. In this scenario, it is clear to see why customer retention is critical. If someone can buy something from Amazon, where it is much easier, they are more likely to complete the purchase and keep coming back, even without shopping around and looking for more selection or better prices.
You've likely been working toward enhancing your customer retention; when someone complains or threatens to leave for a competitor, you bend over backward to keep them. But the truth is that 91% of customers leave without any warning at all.
Below, you will find outlines of a few customer retention stories that go to show just how important -- and possible -- it is to keep customers happy and become part of their buying habits so that they wouldn’t dream of shopping anywhere else.
Following are five stories about companies that made changes to improve customer retention rates that paid off big. Keep reading to get inspiration and ideas for your own business.
Customer Loyalty is for the Dogs
FiveStars is a customer loyalty program for retail stores. They offer points and discounts for every purchase made at a participating shop. When Sarah Lester realized she needed a way to improve sales at her pet boutique and grooming spa, she was reluctant to consider a customer loyalty program. Fortunately, FiveStars was able to show Sarah how their product specifically could increase her customer retention rates, with real data to back up their claims. Lo and behold, when Sarah started offering the cards to every person who came into the shop, she saw her profits skyrocket because the points and discounts encouraged customers -- both new and old -- to eschew other shops for her. The results were astounding, with a 500% increase in daily profits at the store.
This story is interesting because not only does it show how a retail store can increase customer retention through this kind of program, but it shows how a company like FiveStar can turn their customers, like Sarah, into loyal customers and promoters through excellent service and delivering on their promises.
Read more on the FiveStars blog.
Collecting Data Leads to Customer Retention
Not every business can track their revenue as easily as counting up the cash that every person who walks through the door spends. For many businesses, the customer journey is much longer than a walk from the parking lot. When Zapier, an enterprise app integration service, wanted to improve customer retention, they turned to data cloud solutions.
Too many companies make customer retention choices based on gut instinct, but Zapier knew this wouldn’t work. When they started to dig into their vast expanse of data, they learned that support requests were way up over the year. When customers have a lot of questions that need your support, there’s a good chance they are experiencing some frustrations and could be considering jumping ship.
To address this issue, Zapier had their entire team “hunker down for a week to write 278 pages of help documentation, which had been nearly non-existent before.” Support requests decreased almost immediately, making for happier, more loyal customers.
Read more from Zapier.com.
When You Know Your Customer’s Journey, You Can See When They Leave
With more support for a data-driven approach is a story from Simply Customer, a UK-based customer experience consultancy. One of Simply Customer’s founders, Nigel Greenwood, came to his consultant expertise when he was tasked with improving customer retention at his corporate job.
After some initial research, Nigel decided that to get to the heart of the company’s customer retention woes; he needed to know exactly what his customers were doing and proceeded to map out his customer journey in detail. With these customer journey maps in place, Nigel was able to identify 19 different initiatives, such as being more proactive when customers experience issues and providing support collateral that was more professional and attractive, that would make an impact in as little as three months.
The other important part of this particular story is that the entire mindset of the company shifted with Nigel’s effort. Customer retention became top of mind for everyone, not just his team, which led to more ideas, tests, and ultimately better customer retention rates year after year. This customer retention story led to a profit impact of nearly £150 million in its first year, going to show how valuable a deep understanding of your customers’ behavior can go.
Read more on SimplyCustomer.co.uk.
A Viral Sensation Still Sees Customers as People
Seeing your customers as complete humans rather than dollar signs is an ideal that can slip away from too many companies. At Dollar Shave Club, their viral online branding launched an extremely successful company. In fact, their startup video has over 18 million views, which is unheard of for a promotional video.
But, according to SVP of Member Services, Janet Song, the company is still committed to customer retention, despite their powers of acquisition. In her words, "Dollar Shave Club doesn’t respond to situations, it responds to people."
Like some of our other stories, Dollar Shave Club relies on data to learn more about their customers as living, breathing human beings rather than credit card numbers. The results have seen their 1.5 million customer subscriber base remain largely steady with positive opinions of the company.
Customer Education Leads to Customer Loyalty
During the sales process, you do your best to lay out all the benefits of your products or services. However, the best salespeople hone in on what will appeal most to a particular prospect and focus in on those particular areas. While this can be effective in customer acquisition, it is critical that you keep educating your customers about your product even after they make their initial purchase.
Bitly, a popular URL shortener, has used customer education to great effect when it comes to retention. While all of Bitly’s customers knew about its usefulness as an URL shortener, fewer knew about the analytics the service could provide. Those analytics could be extremely useful for marketers using the Bitly service. By offering educational content to their customers, Bitly could show the full possibilities of their product and thereby make those customers a lot more likely to stick around.
These customer retention stories should give you some insight into the importance of knowing what your customers care about and understanding their behavior. If you can see your customers as they are, you can more effectively keep them around, upsell to them, and support your company’s growth in the long term.
For more content about improving customer experience and reaching your company’s biggest goals, be sure to subscribe to the NascentHub blog.