“We see our customers as invited guests to a party, and we are the hosts. It’s our job everyday to make every important aspect of the customer experience a little better.” – Jeff Bezos
If you get the essence of the above message right then customer retention would be a cakewalk for you and you need not be then taught the bookish definition of what customer retention is all about. The on-paper strategies have to blend with on-ground efforts to have a culture and approach which flows through the veins of the entire organization to make customer retention a reality!
And for that to happen we need to be thoroughly sure about to how to arrive at Customer-Retention Rate before we get into the fundamentals of the concept.
Say for example you want to arrive at the retention rate for the first quarter of the year.
You have 50000 customers at the beginning of Jan and acquire 1000 more over the period of three months and the end of it you have 40000 clients.
We will subtract 1000 from 50000 to get rid of newly acquired customers. That leaves us with 49000. Now if we divide 40000 by 49000 and multiply that with 100 we can calculate the retention rate of 81%.
There has been a considerable thought-provoking research done on the impact of a ‘Customer-First’ strategy that there is no doubt that it provides a highly remunerative ROI(Return on Investment) and statistics reveal that the cost of acquiring one is 5-25X more than retaining an existing one.
- Genesys showed that improving the customer experience is the key to increasing retention, satisfaction and sales.
- Bain & Company research shows that increasing customer retention rates by 5% increases profits between 25% to 95%.
- Walker found that 86% of buyers would pay more for a better experience.
- Deloitte and Touch claim that customer centric companies are 60% more profitable.
These numbers are enough to re-iterate that customer is the King and a strategy to contemplate this is worth investing in.
The journey from prospect to customer and then retaining them isn’t always a straight line. In fact, it’s more likely to take a lot of unexpected curves. With intervention of Predictive Scoring and Advanced Algorithms we can guarantee that you wouldn’t miss to see the bumpy speed-breakers, sharp turns and accident-prone zones and have your seat-belts and air-bags in place!
If we re-visit the reasons for the downfall of once-upon-a-time-global-giants in their own fields we realize that not being able to retain their existing customer base was one of the major reasons for their story from riches to rubbles ,though not the only one.
In 1998, there were millions of employees, spread across the globe, working in Kodak and they used to sell 85% of the world’s photo paper. In a few years, they were unceremoniously driven-out of the markets and declared bankrupt with nose-diving customer base. They paid a heavy price by turning a deaf ear and a blind eye towards what their customers yearned for and adapt to changes as per the changing tastes, preferences and tastes of their clients. And rest was as per what the as the saying goes-“If you do not take care of your customers, your competitors will.”
HMT(Watch), BAJAJ(Scooter), DYNORA(TV), MURPHY(Radio), NOKIA(Mobile), RAJDOOT(Bike),AMBASDOR(Car), DINESH(Cloth) are examples which could act as eye-openers for those who are unwilling to embrace drastic changes that the advent of AI and Automation-the Fourth Industrial Revolution is going to bring about.
With the emergence of SaaS (Software as a Service) based companies which encompass a wide spectrum, ranging from not only service and product industry but also extend to regional as well as national political parties worldwide. Yes you read it right. Politics is no exception and whether it is retaining customers or basking in the glory of relentless support of its vote-bank, the underlying principles remain the same!
We all have seen the rise of a relatively late entrant in political circles from a dismal performance of 2 seats to a thundering 303 seats in LS polls and the debacle of a party with more than 100 years crashing to the lowest-ever 40 seats in spite of the fact that it had a rich and colorful heritage and support of masses for decades together. So what went wrong?
The unprecedented win for a second consecutive term by the current ruling party at centre in India took everyone by surprise but the loyalty and trust earned was not an overnight accomplishment! Let’s keep aside the political and ideological differences but decoding their digital journey would give us an insightful view of CRM (Customer Relationship Management) that can be fruitfully applied to all kinds of businesses.
A good amount of groundwork and homework was meticulously done behind the curtains with regards to understanding the needs, tastes and preferences of the masses, analyzing the changing demographics and dynamics. Having a strategic vision and a mission statement with clarity of thought and honest intentions , emotional connect with the prospects who could resonate with the policy framework of the top-most leadership, timely and consistent robust feedback mechanisms in place and most importantly reaching out to the potential and existing voters with adoption of multiple channels including conventional ways as well as embracing the new-age technological advances with open arms led them to a massive victory. It undoubtedly gave them a competitive edge over their rivals who have still not fully come to their senses from the devastating defeat and are on the verge of getting reduced to rubbles. And that’s exactly the point we want to drive home!
The fact that they had mammoth size of data at their disposal could not have yielded expected results had they insisted on adopting conventional ways and relied only on manual intervention. AI, Machine Learning and Big Data Analytics acted like a light-house to give a clear direction to navigate through stormy weather and ruffled waters and not hit the ice-berg en-route to success.
Co-incidentally, if we have to draw parallels to politics, every single touch-point in the sales journey too is a mirror of the brand and an opportunity to highlight it over that of their competitors. The Sales and Marketing team and the after-sales and support team are acting brand ambassadors and have to be in sync with each other.
Some dose of raw wisdom and a common-sense approach would make customer-retention relatively simpler. Here are a bunch of such steps at your perusal to make customer experience an exceptional one.
- Be creative whether it is the slogan, a tag-line, a message you want to convey or content you choose on multiple platforms to woe and retain customers. Make customers the hero of your story. L’Oreal Paris has a tagline “Because You are Worth it” as it believes in the worth of its customers rather than blaring out about the brand!
- Connect with customers on an emotional level. Have empathy. Be in their shoes and you will be amazed to see your customers turn into evangelists, patrons and ambassadors for your brand. That’s the reason, Master Card’s ‘There Are Some Things Money Can’t Buy. For Everything Else ,There’s MasterCard’ could establish an emotional chord with its clients!
- Do not pass the buck as customer service is not the job of any one particular department. The onus to give them a memorable experience lies on the shoulders of the whole organization. It is a collective responsibility and has to be the DNA of the organization!
- Commitment to the customer is similar to a sacred vow. If you cannot fulfill it do not make false promises.
- Deliver within set deadlines. If you are not able to meet those deadlines due to any unavoidable circumstances or unpredictable changes at the eleventh hour show the audacity to keep the customers informed. Being clear, transparent, honest, prompt, punctual, pro-active and regular while communicating with your customers is a key to customer retention.
- Go a one step ahead and have an on-boarding program in place. Your job does not end with designing an User Manual. A demo on do’s and don’ts would relieve the customers of the jargons and technical terms and make their lives easy.
- Craft personalized offers and design loyalty programs to retain customers. Grofers, an e-commerce platform for sale of groceries , has features like ‘Smart Bachat Club’, ‘Grofers Exclusive’ and’ Top Savers’ along with periodic ‘Grand Orange Sale with 100% Cash-back up to Rupees 5000 with no minimum spend condition (to be used @20% at a time for next all purchases ) and a catchy tag-line of ‘Lowest Price Guaranteed’ along with promotional bank and coupon code offers is a win-win situation and a magnetic reason to have a loyal customer base.
- Stay relevant. Don’t be outdated when it comes to matching wavelengths with your customers’ transmissions. Stay tuned to their expectations which are set to change with changing times and play the trending song to be rest assured that customers do not hop on to another station.
- Implement the Five Why approach to drill down and locate the root cause of customer complaint. Keep asking the “Why” until you receive satisfactory answers and track down that last missing piece of the puzzle. Once the problem statement is finalized work towards re-structuring and repairing the cracks.
So the choice is yours! The quote by Doug Warner- ,”In the world of Internet Customer Service, it’s important to remember your competitor is only one mouse click away” shall remain a guiding light in your dilemma of whether to embrace AI and ML or not in your CRM!