Marketers spend the lion's share of their time thinking about how to win over prospective customers and acquire new business.
What they — and their companies — miss out on with that singular focus are the valuable opportunities that crop up post-acquisition, when they continue engaging customers after the sale. The numbers back this up: the economics of customer engagement are such that it costs much more to win over new customers than it takes to get existing customers into a long-term relationship with a brand, building an ongoing connection where they buy and buy again.
Retention vs. Attrition
Earning customer loyalty today goes beyond simply offering a quality product at a competitive price. Instead, as we've all heard, businesses are competing and differentiating based on the customer experiences they provide.
Esteban Kolsky, founder of thinkJar, reports that 55 percent of customers are even willing to pay more for the guarantee of a good experience, and 67 percent of customers who switch brands do so because of experiences that didn’t sit well. Of those customers who do jump ship, two-thirds say that companies could have prevented their defection by resolving the issue at the root of the poor experience when first reported.
Pair these findings with data showing that companies spend up to seven times more to attract new customers than to keep existing ones (and that 65 percent of companies are successful at upselling or cross-selling to existing customers versus only 12 percent to new customers), and a focus on post-purchase customer relationship management — in order to foster customer loyalty and win brand advocates — emerges as an essential pursuit for most businesses.
One reason preventing businesses from nurturing customer loyalty post-purchase is it can be difficult to do effectively. After all, increased competition has introduced more choice and flexibility, making it easier than ever for customers to shift their loyalties. Expectations have also increased to the point where customers may switch brands because of a single bad customer experience — or simply because a brand doesn’t feel congruent with their identity at that time.
3 Strategies to Keep in Touch
Against the backdrop of this always-evolving landscape, adopting these three strategies will equip a brand to better engage its existing customers:
1. Collect Actionable Data
Today’s consumers are (understandably) weary of sharing personal information, so brands should ensure the data they collect provides value. Data that offers insights into customer behaviors and a deeper understanding of their desires tends to prove particularity worthwhile — and actionable.
One example of a big brand using data effectively is Walgreens, where it uses customer analytics to help its in-store health clinic employees better understand customers’ healthcare needs. The big data within Walgreens’ system contains information for over 100 million customers, along with diagnoses, procedures and care plan details.
Equipped with this more complete view of a patient, clinicians can provide more knowledgeable health recommendations and Walgreens’ system can then follow up with customers who have unfilled prescriptions or other healthcare needs that require timely attention.
Data-driven insights like these enable brands to more deeply deliver on customer needs, prepare inventory at local stores and personalize responses. The end result? A better brand experience that helps win customers’ trust (and business) for the long term.
2. Offer Everyone Personalized Customer Service
While outstanding individual efforts by customer service personnel can make for powerful word-of-mouth anecdotes and likely win over those particular service recipients, on a business level it’s important to empower all customer service workers to deliver high quality experiences at scale.
Rather than relying on each individual worker’s knack for remembering a particular customer’s needs and preferences, technology that stores and organizes customer data can provide all workers on every channel with the information needed to offer a great experience.
For example, take a local eatery where technology records the past orders of customers paying via mobile app or who are part of a loyalty program. With this technology, any worker is equipped to ask those customers if they want “the usual,” making those service experiences more personal and more efficient for established customers.
3. Position your loyalty initiatives to best serve your customer engagement strategy
Remember that loyalty programs are not a means to their own end, but exist to serve the success of the overall customer strategy. Kroger’s grocery stores have built a winning strategy around the company’s loyalty program, utilizing data from over 770 million consumers to develop actionable insights that continually adjust the customer experiences offered in-store.
By analyzing buying patterns and accentuating strong in-store experiences, the supermarket giant has been able to drive profitability while growing its loyal customer base. As a result, 95 percent of sales are now completed by customers using their Kroger loyalty cards. This goes to show how loyalty programs can serve as an effective component of your strategy to continually engage established customers.
Retaining customers and winning valuable brand advocates hinges on advantageously using technology to make sense of customer data, glean actionable insights, and execute strategies that deliver positive, personalized customer experiences before and after purchases.
In competitive markets where loyalty must be earned, brands that best understand their customers — and who are smart about meeting their needs as individuals — will hold the upper hand.