3 Ways You’re Losing Out On Customer Retention
When businesses think about growth, there tends to be a significant emphasis on attracting new customers. After all, how do you increase profits without having a larger audience? It’s a logical perspective, but not necessarily a very accurate one.
In fact, instead of focusing on new customers, businesses that want to see real financial growth should be focusing on customer retention. That’s where the money is – in repeat sales.
What else are businesses getting wrong about growth and customer retention? These 3 common myths could be holding your business back, and it’s time to get to the bottom of things.
Myth: If Customers Like Your Product, They’ll Go Out Of Their Way For It
Fact: Sales Have To Be Convenient If You Want To Drive Loyalty
Businesses are deeply invested in the concept of brand loyalty because, well, it’s comforting to think that people have some kind of allegiance to your company and its products. In reality, though, consumers are only willing to buy a brand if that brand offers something in return, even if what they provide is essentially just convenience.
Ensure that you’re offering a consistent, convenient experience across your sales ecosystem, and that if you encounter even a few customer complaints about functionality, that you correct them immediately. Checkout frustrations are a sure path to cart abandonment and, in short order, brand abandonment.
Myth: Onboarding Should Be Straightforward
Fact: Onboarding Should Be Memorable
Many brands assume that the best way to get people signed up for their services is by keeping onboarding as simple as possible, and there are certainly positives associated with such an approach. That being said, consumers are often at their most engaged when making their first purchase, so they’re willing to be mildly inconvenienced or provide a little more information on the way to their first check-out. Use this to your advantage.
Rather than oversimplifying your onboarding process and leaving out valuable information, spend time honing your onboarding stack for customer retention. This is sometimes referred to as creating “thoughtful friction.” Essentially, creating just enough inconvenience or investment that the customer actually feels more invested in your brand. It’s a little bit like the sunk cost fallacy, but it works in your favour.
Myth: You Should Segment Your Audience By Value Or Needs
Fact: Audience Segmentation Demands Narrow Groupings
Segmentation is vital to successful marketing, but if you want to encourage retention and increase customer lifetime value, you can’t just break up your audience into a few general groups. You need to use narrow, customer-focused segmentation practices so that it’s clear to customers that this is about what they want and need, not just about your profit margins. There’s one major challenge at play here, though, which is that if you didn’t collect enough information early on – specifically during that onboarding process – you’ll never be able to do this. Coming back later means missing out on a lot of information, and a lot of sales.
While there’s a lot of debate over how much more cost-effective it is to retain existing customers than it is to acquire new ones, the bottom line is that you need to be attentive to the audience you have, first and foremost. By developing practices that emphasize customer retention from the first moment, you put your brand in the best position to both attract new customers and maximize the value of existing ones.