Why You Need a Customer Retention Plan for 2020
Customer retention matters for almost any kind of business, but it’s particularly critical if you’re a subscription company. High costs of acquisition means you need to maximize the lifetime value of every customer, and the most effective way to do that is to retain them for as long as possible. But how do you go about doing that when faced with constant changes in customer demands and emerging CRM trends?
We believe the most effective approach is a solid customer retention plan and strategy—here’s how to get that right.
Emerging Trends in CRM and Customer Retention Planning
Before we get into the details of how to enhance the customer retention cycle, it’s worth exploring how things are changing in the world of customer relationship management. There are some very clear trends, driven by customer demand and behavior.
Word of Mouth and Customer Advocacy Really Matters
Customers are wise to the constant demand of their attention from brands. But the marketing, promotions, advertising, and other messaging often falls on deaf ears. Instead, customers are turning to friends, family, and trusted colleagues for advice on the best products and services. Word of mouth recommendations and customer advocacy are becoming vital components to customer retention and acquisition plans.
Social Media is an Incredibly Important Part of Customer Outreach
Customers don’t want to come to you, and in fact, most of them won’t. What they expect is for you to communicate on their terms, in their online spaces. More often than not, that means engaging on social media. And to be clear, that doesn’t just mean posting brand or product updates on Facebook and Twitter. It means actively engaging in discussions with customers, dealing with issues, and answering questions on every platform your audience is active.
Customer Interactions Must be Optimized for Mobile
Mobile devices have been the dominant way to get online for the last few years, however the way we interact with customers hasn’t been as quick to adapt. Tailoring customer communications for mobile devices and making it as simple as possible for them to interact with you is no longer optional, but necessary.
Artificial Intelligence is Coming to the Fore
As customers move toward a self-service approach, AI and machine learning need to become a vital part of your CRM strategy. That means using chatbots and other AI implementations to answer questions, provide information, and guide customers in the direction they need to go.
Customer Success and Customer Service are Major Differentiators
Customer success—a focus on helping customers get the most out of your subscription service—is imperative to demonstrating your benefits, sharing value, and encouraging customers to stay loyal to your business. A highly effective and responsive customer service team shows your customers how much you care about their experience.
The Customer Retention Cycle and Your Customer Retention Plan
The customer retention cycle is an important piece that helps minimize churn and maximize acquisition and retention. It has three main parts:
- Understanding your customers through data
- Managing relationships with existing customers
- Communicating with your customers
Getting these steps right will significantly enhance your customer retention plan. Your CRM software is the starting point for each of these three steps, while the customer retention lifecycle should be the foundation of your strategy.
Principles for Building Your Customer Retention Strategy and Plan
Every subscription business is unique, which means there’s no one-size-fits-all approach to creating an effective customer retention plan. Instead, we’ll share some of the most important principles of customer retention so you can experiment and adapt them in your approach.
Understand the Customer Retention Data that Matters
The starting point for retaining customers should always be your data. Identify the key metrics that indicate possible churn and build a strategy around carefully managing those customers. Ensure your plan allows for daily reporting on key measures and use analysis to identify risks in your customer base.
Allow for Investment in Customer Success
Customer Success is a specialized sales and retention function that helps customers get the most out of your products and services. Your customer success agents should be adept at identifying the needs of your clients. Once they understand their needs, they can approach them with insights, training, and other resources to maximize the value they get out of using your subscription service.
Talk to Existing Customers About What They Do and Do Not Like
Together with data and analytics, talking to existing customers will help you understand what they think about your services. Develop a brief phone interview template that your sales teams can use to find out what your customers like and areas where you can improve.
Identify if You’re Listening and Responding Across all Customer Channels
With the explosion of social media, interacting with your customers across every channel is a necessity. Use your CRM or a third-party tool to actively monitor social media for any mention of your business, products, or services. Respond to your customers across the same channels to build brand awareness and trust.
Make Customer Advocacy and Recommendations a Central Part of Retention
Customers who recommend your subscription service to a friend or family member are less likely to lapse. Initiatives like investing in customer success and empowering your customer service teams all help to prove you care about your subscribers. Offering incentives and loyalty rewards is a powerful way to build trust with customers and get them to recommend you to others.
Learn How Artificial Intelligence Can Enhance Customer Interactions
AI and machine learning can be a powerful part of customer retention. You can use chatbots and other technologies to make it easy to interact with your business from any device. Understand the types of questions customers are asking and how they want to serve themselves, then work with AI developers to create automated communication channels to meet those needs.
Talk to Lapsed Customers to See Why They Left
Oftentimes, the most powerful retention insights come from customers who no longer use your service. Arrange to speak with these customers to find out why they left and what could have persuaded them to stay. You may need to offer incentives to get information from them, but interviewing customers who have already churned is vital to preventing future churn.
Use Feedback to Make Changes to Your Subscription Product
Asking for feedback is one thing, but using it to improve your product or service is another thing entirely. Build useful customer feedback into the development cycle for your products, fix bugs, and introduce new features based on those responses. When customers see that you take their feedback seriously, they’re more likely to provide it.
Other Areas to Consider
Here are some other questions to ask to further develop your customer retention strategy:
- Do you need to enhance your existing customer communications and build those into your CRM processes?
- Are you using the right metrics to identify happy and unhappy customers and how can you move on from unreliable measures like the Net Promoter Score?
- Do you need to consider and communicate the ethics of your products and services as those factors become more important to consumers?
- Are you communicating your brand and what your business stands for, to help differentiate yours from the competition?
- Have you split-test customer communications to find the most effective ways of interacting?
- Should you consider customer loyalty and incentive programs?
Remember that your customer retention plan isn’t set in stone. The most important thing is to start doing something more to retain customers, right now. After you’ve started to get some initiatives in place, you can refine and enhance your plan as you learn more.