It is important for businesses to know whether their marketing and sales efforts are profitable. They can discover whether they are by comparing their customer acquisition cost (CAC) to customer lifetime value (CLV). 

A Formula to Calculate the Cost of Customer Acquisition

Your customer acquisition cost formula is relatively straightforward. 

• Choose a representative time period (usually a year).
• Calculate your total marketing cost for the period.
• Divide it by the number of new customers you gained.

Finding the right figures to use may require a bit more thought and analysis. For example, maintaining a website is a marketing cost, but if your existing customers use your website to access your company, then at least part of that is not an acquisition cost. In that case, a portion of your website-related costs should be used in your CLV calculation. 

Similarly, some of your marketing investment targets existing customers, and the rest is used to attract new customers. To get an accurate picture that reflects realities, you cannot use your total marketing cost to calculate your customer acquisition cost. Instead, you must divide your marketing costs between customer acquisition and customer lifetime value figures. 

Costs Associated With Customer Acquisition and Customer Retention

“Marketing costs” sounds like a straightforward figure, but it consists of many business expenses you may not allocate under marketing costs in your business accounts. For example, the true costs of marketing and customer retention include:

• Advertising, social media, and website-related costs.
• Sales and marketing salaries and contractor costs.
• Sponsorships and subscriptions you use for brand exposure.
• Equipment costs (e.g. phones and other devices).
• Sales and marketing tools, for example, your CRM and marketing automation tools.
• The cost of office space and a share of overheads, such as electricity and other utilities. 
• Other costs, for example, sales rep travel costs, trade show attendance, etc. 

The percentage of each of these costs that should be allocated to customer acquisition cost and customer lifetime value will also not reflect in your business’s accounts. You may need to analyse your data to effectively identify where your resources are used. 

The alternative would be to allocate all sales and marketing costs under customer acquisition costs (as some sources recommend), resulting in a skewed ratio and unrealistically high customer acquisition costs.

How to Boost Customer Acquisition Profits

The simplest and least effective way to decrease customer acquisition costs is to slash sales and marketing budgets. This is unlikely to be sustainable or profitable. Every business needs new customers to grow and compensate for customer attrition. Adopt a measured approach. For example, you could:

• Analyse how different forms of marketing promote sales. Attribution can be complex, and factors such as seasonality may need to be factored in. You may need to test your conclusions, but your aim is to determine which types of marketing campaigns attract the most customers at the lowest cost and strategise accordingly.
• Optimise your sales funnel. Find out what strategies are most effective in moving customers from one stage to another. Eliminate elements that do not add value, and target your investment to achieve higher conversion rates.
• Improve the overall customer experience. Are you losing prospective customers because your website is confusing or customer service is hard to reach? Search for pain points like these and eliminate them. More conversions decrease customer acquisition costs even if you do not spend any less on sales and marketing. 
• Target your ideal customers. Trying to sell to everyone? Consider profiling your ideal customers so that you can target their needs more effectively and improve your marketing ROI. 
• Work on customer retention and repeat purchases. If you can improve customer lifetime value, you automatically make your sales and marketing investment more profitable. It’s accepted knowledge that it’s cheaper to keep a customer than to find a new one. 

Once you begin analysing your spend and optimising where it goes, you should start seeing results. Remember, you don’t necessarily need to spend less, but you do want to see increased profits. That means focussing your resources where they’ll achieve the best results for your business. 

Need Help Winning and Retaining Customers? Differentiate Through Human Contact

As a company that employs people to talk to people, we often find that our clients’ customers are amazed to hear from a real human being. It’s easy to see why. Though automation can save costs, overreliance on it as a catch-all solution has become the norm. 

Add the human touch to your service, and you are almost certain to win and keep more customers. Set your business apart with RSVP’s customer lifecycle management services. It’s a scalable service that responds to your customers’ needs and your business’s priorities. Offer great customer experiences. Build relationships. Have agents who listen more than they talk, respond intuitively to customer needs, and keep your customers coming back for more. 

Let’s discuss customer lifecycle management and explore how we can support your business. Our aim is always to boost your ROI, outperforming what you could achieve with in-house teams. Serve your customers better, boost your sales, and improve customer retention with RSVP. Contact us today, we are ready to rise to the challenge!

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In this article, we will share our experience with methods that reduce customer attrition rates and offer actionable approaches to recovering lost customers. When you tackle challenges like this, your first step is to benchmark where you are now. Let’s begin by explaining how you can calculate your customer attrition rate. 

A Simple Customer Attrition Rate Formula and Alternatives

The formula requires you to begin by measuring your customer base over a given period and then comparing it to a similar period by expressing customers lost as a percentage of your total number of customers. This is easy for businesses with monthly subscription services. 

Others may have to begin by calculating the average period between repeat purchases. For example, if your customers buy from you every three months on average, you should compare three-monthly figures. If your products tend to be most popular at a specific time of year, you may want to compare annual figures. 

Instead of looking at the number of customers, you can look at revenue or you can calculate your current customer lifetime value. However, whatever means of measurement you use, you should be aware that there may be several reasons for your findings. We will explore these shortly.

Customer Attrition Modelling

There are ways to build a mathematical model that allows you to predict churn. Trying to do so manually, while possible, is a gargantuan task, but specialised software may be able to help. Although this approach to monitoring and predicting churn may not suit everyone, it bears mentioning since you can test various scenarios using your model. To build it, you will still need a lot of historical data. As such, it is best suited to subscription services.  

Why Customers Stop Buying: Reasons for Customer Attrition

Your customer attrition analysis will not be complete without discovering why customers stop supporting your business. These may not be obvious, and it may be worth canvassing customers to discover why they are no longer interested in your products or are spending less with your business. 

Reasons for customer attrition include:

• Your product is no longer relevant to former customers: They no longer match your target market. 
• Customers are no longer satisfied with your product or service: Dissatisfied or unhappy customers choose to avoid doing business with you.
• Poor customer experiences: Your customers may feel that your business does not offer enough support, or have had problems with billing or delivery. 
• Poor value perceptions: Customers may have found a cheaper alternative or one they perceive to be better.
• Price increases: Significant price increases may cause customers to seek alternatives or stop using your product. 
• Involuntary churn: Customers may wish to support you, but they are unable to do so. For instance, they may be struggling with their preferred method of payment. 
• Economic factors: Customers can no longer afford your product. This could be because of personal circumstances or economic downturns.

As you can see, uncovering the reasons why your customers stop buying may influence your business strategy. You may decide to redesign products, create new products, adjust your pricing strategy, or change work systems. 

Of course, you may be able to win some of the departing clients back into the fold, but it is also perfectly normal to have a few customers who are simply no longer right for your products. If you are losing customers faster than you gain them, this may signal a need for a closer focus on marketing. 

Finally, there may be cause for concern, indicating a need to take steps to safeguard revenue and profitability, recover customers to maintain business growth, or increase customer satisfaction so that customer retention improves. 

What is the Top Reason for Customer Attrition?

The most important reasons for customer attrition vary from business to business. As a result, research is generally carried out on specific types of industry. For example, the reasons you may choose to abandon your mobile phone provider may differ from the reasons you cancel a software service. 

However, no matter whose information you read, you are sure to notice poor customer service at or near the top of the attrition list. For years, studies have reported that customer service and satisfaction are at an “all-time low.” The last year has shown that we “ain’t seen nothing yet,” as scores plummet ever-lower. 

The Forrester Report measuring US customer experience deterioration notes that “underwhelming digital experiences using chatbots” are partly to blame. Pulling no punches, the report’s authors say that few businesses are “customer-obsessed.” They define this as basing all business activities around customer wants and needs. 

Since customers are what make a business work, it makes sense that customer obsession may be key to reducing customer attrition. This brings us back to the final section of this article: our tips for reducing attrition and bringing old customers back. 

How to Win Your Customers Back: A Practical Guide

All businesses must accept that as time passes, customers can cease to be a good fit for their products. All the same, this should be a relatively small percentage of people. Why are the rest abandoning ship? With online services, asking customers to complete a short exit survey may well uncover reasons for leaving.

Other businesses may have to look further to examine possible reasons for customer attrition, like competitor or substitute offers, changing trends, the economic climate, and so on. Knowing why people leave should help you devise strategies to get them back. However, we can offer some general advice.

Be Proactive About Customer Retention 

Prevent negative experiences by making sure your customers are always able to get good service. Contact customers after purchase to find out whether they are satisfied. Monitor your competitors and offer customers superior solutions or better prices. Monitor and measure workflows so that efficiency is always on point.

Recover lost customers through win-back campaigns

This could take the form of a standard marketing campaign, or you might shoot through some emails, but one of our most successful win-back campaigns involved in-person calling. Virgin Wines tasked us with calling customers who had last purchased between two and six years ago. 

Using this strategy, most people should achieve a conversion rate of around 10 percent, but our team achieved a 25 to 35 percent conversion rate. With the right team to work on the project, you may be able to emulate this. 

Personalised Experiences

We aren’t just talking about automated messages and offers, although these might help. Gaining a perspective on people’s tastes and needs is best done in person, and you can adjust as you go. 

This is one of the strategies we employed in the case study mentioned above. If Mrs Jones prefers Sauvignon Blanc, there is no point in talking to her about Burgundy unless she expresses interest in it. If you can throw in an incentive or two, you may well have a winning recipe. 

Continuous Improvement

In business, one can never rest on one’s laurels. There is always something that can be done better, and your customers can provide valuable intelligence that you can use to keep on improving their experiences. Find ways to offer clients what they want, where and when they want it, and keep getting better at it. 

Business Process Outsourcing (BPO) and Customer Retention

Many businesses struggle to undertake all the tasks required for effective customer retention. Too often, the focus is on new client acquisition. While this is important, managing customer life cycles so that you can achieve a higher customer lifetime value will benefit business growth and may require less investment. 

At RSVP, we help businesses improve sales and support experiences and offer customer lifecycle management services. From client acquisition to lapse prevention, cancellation saves, and reactivation of old customers, we help you understand your customers better while strengthening their bonds with your business. 

Our team members are masters in the art of communication, and our service is fully scalable. With RSVP, you can build better customer experiences and boost your bottom line at the same time. Talk to us about your customer attrition woes. We may just have the ideal solutions you are looking for.

Read more about the Customer Lifecycle.

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A customer journey map ensures that every step on the way towards a purchase – and the steps that follow – are taken into account. Without it, it may be easy to overlook some small but important detail that either prevents customers from making a purchase or that leaves them with a negative impression. Even neutrality is not good enough. A customer who is neutral is perfectly likely to support your competitors next time around. 

How to Create a Customer Journey Map

If you haven’t yet done customer journey mapping, now is a great time to start. You’ve probably realised that not all customer journeys will be exactly the same, and it’s true that you’re likely to end up with several customer journey maps. But, to begin with, you can consider your typical customer and plot their journey towards a purchase and beyond. After that, it’s easy to tweak it to take less typical journeys into account. 

If you’ve already captured your sales funnel, the typical customer journey map will follow it closely – and go beyond it. If you haven’t, you can conceptualise both the sales funnel and the customer journey map at once. A very basic representation will include the following stages:

Attention 

“This company has a product.” Terminology varies, so the “attention” phase is sometimes termed “awareness,” and it represents the first step of the customer journey. So, your first step in creating a customer journey map is to consider how people become aware of your business. Online businesses can quite easily use automated analytics as customer journey mapping tools that show them the sources of traffic to their websites. This could be anything from organic search to social media advertising. 

Interest

“I’d like to know more.” If you pique their interest during the awareness phase, the next thing customers do is to explore what you offer. They’ll also compare it to other alternatives – and they might have questions. It’s vital that you make it easy for them to find the answers they’re looking for. Compare this to entering a brick-and-mortar store. If you can’t easily find what you want, you might just walk out there and then. And if you want help from a sales assistant but you can’t get their attention, you’re sure to leave empty-handed. 

Desire

“I want something like this.” Play your cards right, however, and your prospect may decide that they have a desire to purchase your product. But the sale isn’t made yet. There may be another round of comparison shopping, and any questions they have will become more specific than they were before. Consider the ways in which prospective customers would interact with your business, and what they may experience elsewhere. You want your business to get through this phase with flying colours.  

Action

“I’ll buy that.” At last, your prospect is ready to convert and become a customer, but you can’t leave this part of their journey to chance either. How will you make your customers feel like VIPs as they reach for their wallets? Is it easy to make the purchase?

The last phase of the customer journey isn’t part of the sales funnel at all. But it’s decisive and often overlooked. Having bought what you have to offer, your customers will still expect service and support. And those needs may extend to the entire time during which they’re using your product. Having won a customer, you don’t want to lose them now! After all, you’d like them to support you next time around – and even recommend you to their friends. Map it out. Know what they’re experiencing.

Customer Journey Map Example

Customer journeys are usually plotted in a linear fashion with each stage being allocated a category. This allows you to construct multiple customer journeys based on these phases. What these consist of depends on your type of business, but a typical example might include:

• Identifying a need or want
• Researching solutions
• Making a purchase
• Onboarding
• Using the product
• Retention
• Referral

To optimise each of these steps, consider the needs, thoughts and feelings of consumers at every phase. But people can surprise you – we may think we know what they want, but the reality might differ from that. Surveys can be very helpful customer journey mapping tools but be sure to keep them simple while allowing customers to expand on their answers if they want to. 

Insights from your customer service team and website analytics can be extremely valuable. Look for bottlenecks, hitches, pain points, and frequently asked questions. Now, consider how you can address them. Remember, it’s a journey. You want it to be smooth and pleasant, and it shouldn’t be necessary to stop and ask for directions!

Customer Journey Mapping Process and Pitfalls

Mapping customer journeys may seem fairly simple. Here are the steps:

• Gather data
• Create personas
• Look for touchpoints
• Optimise touchpoints
• Get loyal customers

But each of these steps has hidden pitfalls. For example, if your data isn’t good, then you might be barking up the wrong tree from the outset. And, if you generate irrelevant personas, you’re setting out to please the wrong people. As for touchpoints, customers won’t always follow a formula: are you missing important moments? If you are, they could be the very areas where you’re losing customers along the way. Finally, don’t drop the ball after you’ve clinched the deal. Your aim is not only to get customers, but to keep them and develop them into brand advocates.

The bottom line? The top challenge to overcome in customer journey mapping is knowing your customers: not who you think they are or what you think they will do – but the reality. It’s not something you can do effectively as a theoretical exercise, and the more perspectives you collect, the more likely you are to get on the right track. 

Do You Listen to Your Customers?

Surveys are great, but they have to be rather simplistic or you won’t get responses. It’s possible that survey results may leave you with more questions than answers. For example, metrics like your Net Promoter Score may point towards customer journey issues but fail to pinpoint the moments that matter most to your customers. 

In the end, good, old-fashioned talking and listening may reveal surprising insights – so your customer-faced staff can become your top source of information. To do this effectively, they need to know what your goals are, understand customer journeys, and be able to alert you to areas for improvement. 

This might seem to throw up some additional problems for you beginning with where you’ll find customer service agents who will go beyond just “doing their jobs” and how you’re to capture and collate all the data they collect. 

The solution lies in a combination of the right people and the right tech tools. At RSVP, we provide you with both. Advanced software and analytics combine with customer service agents who know how to listen actively. Your customers may forgive much if they receive dedicated help from real people, but we don’t overlook the fact that you want to pinpoint moments when customers are struggling on their journeys. After all, if the journey is a smooth one, requests for assistance should be the exception. 

Let’s work together to create great customer experiences. Contact us to find out more about our business process and communications outsourcing services – let’s get the ball rolling!

Read more about the Customer Lifecycle.

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This post looks at what customer journeys are, the elements that go into them, and the critical, make-or-break points that matter to your customers – plus, we’ll offer tips and examples to help you. 

What is the Customer Journey?

The term “customer journey” is very apt. Think about a regular journey you’d undertake, perhaps to a holiday destination. Consider it as a simple customer journey example. 

• You become aware of a destination
• You research it to find out if you want to go there
• You enquire about anything that seems unclear
• You decide to travel to the destination
• If all goes well, you arrive
• You stay for a while
• Throughout the trip, you will have good, bad, or neutral experiences. This helps you decide whether you’ll go there again in the future. 
• You had a fabulous time! You tell your friends how great it was! 

Let’s translate this to your customer journey. Just as you went through several phases on your holiday journey, your customers “travel” through several steps during their relationship with you. The combined effect of all these steps represents the customer journey – and your task is to optimise them so that customers not only complete the buyer journey but keep coming back to you. 

So, What are the Customer Journey Stages?

Each stage of the customer journey creates an impression, and you want that impression to be much better than “neutral.” Indeed, you will strive to make it good, or even exceptional. Fail on one stage, and all your other efforts might be overshadowed. Here are the vital touchpoints you need to consider when crafting customer journeys that are memorable for all the right reasons. 

• Potential customers become aware of your product or service: Your attention-grabbing advertising, or more convincingly, a recommendation from someone they know, makes a prospect aware of what you offer. If this step is positive, they may move to the next step.
  
• The consumer considers whether they might want what you offer: A lot goes into this step. Consumers want to know whether your product addresses a problem or provides a benefit they want. They’re searching for information, and they’re probably comparing you to your competitors. Give them useful information. Show them real reasons why they should choose you. Take it easy on the sales talk. Give them good advice, facts and figures.
• Your prospective customer is ready to make a purchase – but they might still decide to choose your competitors. Improve your chances of winning them over by being at their service. Show them why choosing you is the smart option. If they seem ready to commit but then cool off, follow up. Did they buy your product? You have completed the buyer journey, but not the customer journey.
• You have a customer. Will you retain them? Too many businesses think that a successful sale is the end of the customer journey. But the real journey has just begun. Before this, you had a prospect. Now you have a customer. It’s up to you to keep them. Show your customers how much you value their support by providing superb service and building relationships.
• You win! Your customer is now a brand advocate. You stand a chance to lose customers at every step of their journey – even if they already bought your products. But once you’ve gotten this far, the remaining customers are so happy that they chose you, that they tell other people about their great experience. Their recommendations are far more convincing than any marketing message you may craft, so you get new people who are ready to embark on a customer journey. You’ve achieved customer journey marketing. 

Customer Journey Management: A Must for Successful Customer Journey Marketing

As we pointed out earlier on, great customer journeys are purposefully crafted. The work you do to create impressive customer journeys that end in brand advocacy is termed customer journey management. 

It may sound like a lot of work. It’s clear that a great many details need to be taken into account, but the results are compelling. Here’s what you get.

• Elevated interest in your brand
• More conversions and better revenue
• Loyal customers who will support you in the future
• Brand advocates that “sell” to their friends at no additional cost to you
• New prospects who heard about you from your customers and who, if handled correctly, become brand advocates themselves

Compare this type of marketing to any other type of marketing you might undertake. For example, let’s think about an advertising campaign. It can help to elevate awareness, but you’ll have to keep reminding people about what you do. You’re spreading your net widely, and only some of the people you reach are interested in your product. Even if they are, you’ll have to work harder to gain trust and convince prospects to convert. 

That’s not to say that advertising doesn’t have its place in your marketing strategies. It does. But once you have a new customer, turning them into an advocate means even more benefits: for example, highly relevant new sales prospects, greater trust from the people happy customers refer to you, and a much better chance of gaining a new advocate. The word “exponential” is no exaggeration when applied to the results of customer experience marketing. 

Getting Started With Customer Journey Marketing

It’s time to walk a mile in your customers’ moccasins. Even if you think you’re already offering great customer experiences, there’s always room for improvement!

1. Identify your ideal customers

Never forget that customer journeys are followed by real people. Who are yours, why do they buy your product, and would they recommend you to people they know? Unless you have a completely new business, you can use your sales histories and existing clients to answer this question. Surveys are a great tool. For example, your Net Promoter Score and Customer Effort Score will be useful metrics. 

2. How do people navigate the customer journey?

Each stage of the customer journey is represented by one or more touchpoints. Each of these must be positive or you run the risk of losing them along the way. What would they want to experience? How do you provide for that? Map out all the possible touchpoints and strategise around them. 

Of course, different customers may experience different journeys. Begin by mapping out a typical one. After that, you can expand your customer journey model to cover additional options. 

3. Identify pain points

It’s time to take an honest look at what people experience in their customer journeys – and what puts them off. E-commerce customer journeys can give you very clear indications of where customers fail to move to the next step. Now, you have to figure out why. Ask some hard questions and look for honest answers. 

For example, if people visit your product listings, browse and then leave, they may not be finding what they want easily enough. Consider your marketing messages as well as your website’s architecture and content. Are you sending out relevant signals? Can customers reach out for help, and if so, did they get great service? Abandoned carts? It happens, but why? Is it because your checkout is hard to navigate? Did they hesitate because they were still unsure of your product?

Repeat this process with all the touchpoints you’ve identified. If you uncover a long list of issues, don’t get discouraged. See it as an opportunity. Only think how much your focus on customer journeys can improve customer experiences, and with that, your sales!

4. Decide what you’re going to do to optimise customer journeys

When optimising customer journeys, remember that you’re trying to make them easy and pleasant for your customers. Your aim? A first-class journey in which your customers’ every need is attended to. Your customers feel valued, and they’re frankly impressed. 

Our top tip? Never forget the value of in-person service. Even if your customers rarely take advantage of it, knowing it’s there for them is a big plus. Sure, your help menus or chatbot can field some basic questions, but there will always be times when what customers really want is interaction with real people. If nobody is out there, you just sent them a deal-breaking message about your customer service. 

5. Customer journey analysis: measure your results and refine

Your focus on customer journeys should begin to bear fruit quite quickly while also having longer-term benefits. In the short term, you should see an increase in conversions. In the long run, you should reduce churn and improve customer lifetime value. Looking good? That doesn’t mean you can’t refine customer journeys still further. Dig deeper with detailed customer journey analyses and smooth the path toward more sales and happier customers. 

Customer Journey Communication Channels

At each of the touchpoints on your customers’ journeys, you’re communicating with them in one way or another. Some communication channels are interactive, and others are not. Some are digital, and others are analogue. For example, an advertisement on a billboard is a communication channel. Your website is an interactive digital communication channel – even if you never “talk” to your customers, your website is doing that for you. 

Identify the channels you’re using to communicate with your customers at every phase of their journeys and at every touchpoint. You’re not only aiming to optimise them, you’re also looking for gaps and eliminating further pain points.  

Remember that you won’t always be the one to initiate communication. Got a social media profile? It shouldn’t be a one-way communication channel. Received an email or a call? Don’t leave your customers waiting for a response. Chatbot not coping with a live chat request? Someone must pick up the pieces fast!

Here’s where RSVP’s customer lifecycle management services can help you. No matter where your customers are on their journeys, which channel they use to reach out, or what time of day or night it is, we’re there to help you build amazing customer journeys through communication. 

Contact our London-based communications company and find out why top brands are trusting us to deal with their clients. Are you ready to create customer journeys that convert and retain customers? Want to know what your customers are saying about their experiences? From providing superb client service to supplying the vital feedback and valuable market intel you need, we’re here to support both you and your clients.

Read more about the Customer Lifecycle.

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Customer loyalty means that people will keep buying from your business because they believe that you offer them the best in products and services. They’ll stick with you even when there are cheaper alternatives, and they’ll even tell their friends and business associates about your company and why they’re loyal customers. 

Don’t underestimate the benefits of this. You can join the thousands of companies who make claims about what they offer, or you can have social proof in the form of satisfied customers who are ready to recommend you. Would you believe marketing claims over something that ordinary people say? Most people wouldn’t. 

We’ve already touched on some of the benefits of customer loyalty, but we’ve barely scratched the surface. Let’s try to capture them all next. 

Why is Customer Loyalty Important?

Loyal customers are happy customers, and the businesses that build loyalty are healthier businesses too. Need specifics? Let’s dive in!

Build a great reputation. Loyal customers are happy to tell the world how pleased they are with their experiences. Reputations are built on customer experiences, and loyal customers will be happy to share theirs – both online and offline. 

Get brand advocates. You pay for advertising, but when happy clients tell others about your business, you get very believable advertising for free. Would you support a business that your friends recommend? Chances are, you would!

Get social proof. There isn’t a business out there that won’t claim that it offers fantastic products and great service. Your marketing claims may be met with scepticism, but people who have become your loyal clients provide evidence that your business really is all that it says it is. 

Get repeat purchases. This one’s a biggie! Neutral customers might succumb to the lures your competitors throw out and try a competing offer. Loyal customers will always choose you.

Get more for your marketing bucks. It costs a lot to make people aware of your business and what it offers. Getting that initial purchase is your first big win. Provided they’re pleased with the result, they’ll stick with you and even recommend you. Your converted customers remain your customers without you needing to spend more – and they’ll draw in more customers for free. 

Boost your profits. What’s your customer lifetime value? Winning a customer is great. Now, you need to keep them. Loyal customers will choose your product over competing products for as long as they need what you offer. That means a higher customer lifetime value and more revenue for your business. 

Get to know your customers. Who are your loyal customers? Why do they choose your products? The answers to these questions may be surprising and can help you to pitch to the most relevant demographics. 

Get more customer engagement and input. When customers are loyal, they feel engaged too. They’re ready to talk to you about your products and services, giving you valuable information about their experiences. Find out what your customers like – and don’t like. Market research is expensive, but loyal customers will give you their opinions freely.

Deal with less price-sensitive clients. Pricing needn’t be a race to the bottom. Loyal customers are willing to pay more for products and services they believe in. Sometimes, loyalty comes from the quality of your products, and sometimes it’s the great service you offer. Usually, it’s a combination of the two. Loyalty equates to trust, and a reluctance to test the waters elsewhere – even if there’s potential for getting something similar at a lower price. 

What’s the Customer Loyalty Ladder?

Building customer relationships to the point where you have loyal customers doesn’t happen the minute people become aware of your business. It’s a process, and if you see loyalty as the pinnacle you want to achieve, you should consider customer experiences on every rung of the customer loyalty ladder. 

Here’s how it works. At first, people notice your business and think you might have something they want. They’re prospects. They haven’t purchased anything yet, but there’s a good chance that they will. 

Now that they know your company exists and has products they might want, prospects take a closer look. They’ve processed to the “shopping” level of the ladder, but you don’t have a loyal customer yet. 

You’ve made a sale! During the shopping process, you gain a new customer. But they aren’t a client just yet, and there’s no guarantee of satisfaction, let alone loyalty. 

The dictionary says that clients and customers are the same. Definitions you can search for online try to distinguish between the two based on various criteria and don’t agree. For the purpose of this discussion, a client is someone who will keep buying your products, while a customer buys once. Customers are good to have – clients are better!

Let’s suppose that a prospect has become a customer, and later a client. Are they an advocate? That depends on you. Most of us can think of businesses we support grudgingly. Your insurance company might be a good example. Before you become an advocate, you’re going to want evidence that it’s a pleasure and a privilege to do business with it before it enjoys your full support. 

Customer Loyalty and Retention: Strategies to Keep Your Clients and Develop Brand Advocates

There are many ways to build customer loyalty. It’s based on self-interest, so customer loyalty programmes, though unemotional by nature, can work. Typically, you’d offer incentives for referrals and repeat business. It’s a purely transactional way of keeping your customers and getting them to recommend you. 

But passionate advocates are better than incentivised advocates. You don’t need to offer them anything extra in exchange for their loyalty and advocacy. Instead, they’re objectively convinced that you offer the best options for them and people like them. 

It takes more than offering good products. After all, competition can come from unexpected places. Products that are even vaguely related to yours could win in a situation in which one or the other might achieve a similar result and your customers have limited resources. 

One-to-One Connection Builds Relationships and Loyalty

Real loyalty means that your customers love supporting your business, and great service is one of the top ways to win them and keep them. It’s not just a matter of operational efficiency and sending nice automated emails (although these have their place). The differentiating factors that you can count on are personal service and interpersonal connections. 

Technology offers many ways to connect with brands, but one-to-one interactions offer defining moments. That was the case back when everyone shopped on the high street, and it still holds true when people shop using the World Wide Web. 

Your challenge? Ensuring that everyone who interacts with your business can get in-person service that uses technology to understand where they’re at when they make that call or send an email. Talking to bots just doesn’t cut it. Try it if you’re curious – and avoid the “throwing my phone at the wall” moment it is almost sure to provoke. 

People want to talk to people and they want what only real human beings can offer: empathy, flexibility, and someone who will truly listen to them. Your customer service and support line can be your biggest source of customer loyalty – or your weakest link. 

When your customers search for human contact, give them everything they’re looking for and more. What would your customers’ experience be like if you, the founder or CEO of your company, picked up the call yourself? At RSVP, we match anything you could do for your customers, and then work to do even better. Great in-person service makes personal connections, and they last. Customer loyalty could be the key to your success, and RSVP has the people you can trust to connect with your customers and build relationships with your most precious resources: your customers and clients. 

Customer Lifecycle Management: Building and Maintaining Relationships

Customers go through several phases on the road to customer loyalty – and once they’re there, they will have expectations. You’re focused on business strategies, product development, and more. Do you have time to listen to your customers? 

We do! Build customer loyalty and acquire brand advocates effortlessly while keeping your finger on the pulse of customer opinion. RSVP delights your customers and keeps you in control. We deal with the details – you tap into the trends and get the big picture. Deploy your customer lifecycle management efforts effectively with RSVP. Contact us today, we’ll do you proud!

Read more about the Customer Lifecycle.

The post Customer Loyalty: What it Is and Why It is Important appeared first on RSVP Call Centre.

Why is Customer Lifetime Value Important?

Marketing has its costs, and as such, you want to get good returns in exchange for your efforts. But are you pitching to the right audience? The Pareto Principle says that 20 percent of your efforts are responsible for 80 percent of your results. Shocking as this may seem, it’s been tested by countless businesses and it works. 

What if you could discover which 20 percent of your work brings in those higher-value customers? Armed with this knowledge, your marketing team can concentrate their efforts on activities that deliver the best results. At the same time, knowing who your best customers are helps you to align your business with their needs. They’re happier, and more likely to remain loyal. 

Calculating and monitoring customer lifetime value helps you to discover just who your best customers are; who you should be working hardest to attract and retain as clients; and helps you to find ways to get better returns from your existing customer base. Less investment, better returns: it’s an attractive prospect. 

Customer Lifetime Value Formula

What’s the average lifetime value of your customers? To get a baseline figure, gather the following data:

• Average order value
• Average number of transactions per period
• Average time that customers continue to support your business

Each of these figures is already valuable on its own. For example, you could use your customer retention figure to set goals to boost customer lifetime value, look for ways to encourage customers to buy more frequently, or find strategies to boost order values. Multiplying all three figures together gives you a baseline customer lifetime value and your goal will be to keep improving it. 

However, you can do even more. What’s the demographic that represents your high value customers, for example? One of your most interesting uses for customer lifetime value is to see how it compares to customer acquisition cost. Let’s zoom in for a closer look. 

Customer Lifetime Value vs Customer Acquisition Cost

How much does it cost you to gain new customers, and is it worth it? Looking at your sales following a marketing campaign can be interesting, but what you really want are longer-term figures. So, if your marketing investments attract X number of new customers, what is your customer lifetime return on that investment? 

Knowing this fact will help you to see whether your marketing is attracting the right customers – people who genuinely gain utility from their purchases and who are likely to continue their relationships with your business. 

Tips to Increase Customer Lifetime Value

Price Increases

Looking for some extra inspirations to improve customer lifetime value? The obvious one would seem to be a price increase, but approach this with caution. Aim too high, and your prospective customers may think twice before making their purchases. 

Offer Great Customer Experiences

Keeping your customers happy, on the other hand, always improves your chance of building loyalty and getting more repeat purchases. Use customer satisfaction surveys and customer support data to benefit your customers and your business. Pay close attention to all the feedback you get. If there seem to be stumbling blocks that are preventing your customers from having an experience they unreservedly want to repeat, you just found room for improvement and a way to improve customer lifetime value. 

Pitch Higher-Priced Options and Extras

Cross-selling and upselling can help you to boost customer lifetime value, but be sure to leave customers feeling that this approach benefitted them. “Pushy” salespeople and buyers’ regret will drive your customers away and that’s just what you want to avoid. 

Build a Community

Building a customer community is a great way to help customers identify themselves with your brand and foster loyalty. Your social media activities can help a lot here – or you can consider interactive message boards – even a “club.” Consider Harley Davidson as an example. There’s a strong sense of community with fierce brand loyalty there!

Offer Value or Status Incentives

Customer incentives can make a huge difference to customer lifetime value. There are many ways to incentivise customers. It comes down to offering something they want in return for their continued loyalty. Freebies and discounts are big favourites, but you can also look beyond the obvious. For example, if leading with the latest trends is important to your customers, you can have exclusive VIP offers or give your VIPs a chance to get the latest goodies before anybody else.

Are They Getting on Board? Make it a Pleasant Ride

Onboarding processes that work for your customers will help you to provide a customer experience that incentivises repeat purchases. Make it easy, welcoming, and be sure that help is at hand whenever it’s needed. Make it hard for them, and they probably won’t be back.

Special Mention: Subscription Models

Finally, subscription models can help you to boost customer lifetime value. You’ve probably seen software subscription offers before, and they make a great example. It’s fairly standard to offer a lower monthly fee for longer subscriptions – for instance, subscribe for a year and pay less per month. 

By the end of that year, customers will have become accustomed to using that software, and as long as it still does what they need it to do, they’re very likely to renew their subscriptions. They may need a little reminder – even a call to find out if there’s a reason why they don’t seem to be renewing their contracts – or they might just leave renewals to run without you needing to intervene. 

But software isn’t the only area that’s open to subscriptions. If you’re selling something that people want or need fairly regularly, subscriptions can work with you. From wine to dog food, customers are happy to save effort and cost in return for a regular supply – and you’re happy to get repeat purchases effortlessly.

Boost Customer Lifetime Value With RSVP

There are several reasons why getting us on your side will help you to boost customer lifetime value. First and foremost, you can rely on us to give your customers great 24/7 service and support, but there’s more. Using our CRM software, we record valuable metrics that help you to “listen” to your customers even though we’re doing the listening and talking on your behalf. 

From helping you to understand customer behaviour to gathering customer satisfaction data, and following up with your customers as needed, our customer lifecycle management services provide a single, unified touchpoint that provides you with strategically important information. Meanwhile, we’re nurturing your customers by providing the superb service you want them to have. Looking for a strategic partnership to boost customer lifetime value? Let’s talk!

Read more about the Customer Lifecycle.

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If you can truly understand these triggers, it places you in a position in which you can influence customer behaviour and boost your sales. You can’t get under your customers’ skins to see what their thoughts and emotions are, but you can look at their behaviour, search for patterns, and make inferences. 

What are Customer Insights and What Are They Used For?

Customer insights are an outside-in approach to understanding customer behaviour. Although each of your customers is unique, your business communicates with them through verbal and non-verbal cues, and to gain insight, you can use their responses to these cues to understand them better. You’ll be looking for answers to seemingly obvious questions like “What do my customers need?” Did you think you knew? The real answers might be surprising. 

For example, an insurance company might think that its customers need insurance policies. But what they really need is peace of mind. It’s an important difference that should be used to shape the way they communicate with their customers. If they can communicate using visual and verbal cues that show their understanding of their customers’ needs, and that resonate with them, the chances of selling their products will improve. The same is true of any other type of business. 

To analyse customer behaviour and obtain customer insights, you will need high-quality data, excellent analytics, and a willingness to accept the results of consumer research. And, in acknowledgement of the fact that your customers aren’t all the same, you will need to consider that your market should be segmented into several groups with broadly similar sets of characteristics and motives. 

You’ll use this information to guide your marketing efforts, possibly even crafting different messages to cater to the needs of different market segments. 

How to Create a Customer Insight Strategy

Using customer insights to guide your strategy is a great way to develop your business’s appeal within its target market. As we’ve seen, it takes a research-based approach. 

Start by finding out what your customers really need and why they would want what you offer. Hint: it probably isn’t just the product itself. Using another example, nobody buys potatoes because they want potatoes. They buy them because they want to satisfy their hunger. So, what do your customers really want, and why? Once you know this, you can determine what would influence their buying behaviour. You can use this information to define your value proposition and to develop customer journey maps – you can even use it to develop new products. 

Segmentation research uses customer behaviour analysis to help you to identify the different types of people your business might serve and how their motivations might differ. You can also try to determine which are the most fruitful market segments to target. Pitching to a niche segment will only give you niche sales. Where do most of your potential sales and profits lie? It makes sense to invest in those market segments first. 

Concept research can help you to decide whether you want to pursue new ideas. Would your customers be interested in them? How would they react to your new concepts? What would they want to change? It’s a great way to test the waters before diving in and investing in new areas. 

You can also use quantitative projections fruitfully. For example, your products might include features that raise your price but that customers don’t really want or need. If you did away with those features, could you expect to make more sales based on your ability to reduce prices?

Sometimes, you’ll use the way customers are already behaving to get data through analytics. At others, you might want to approach customers and ask them for their opinions directly. Or, you might use analytics to form an insight, and then see whether it is verifiable by testing it out.

To sum this up, you will constantly be monitoring your customers and their reactions, changing your approach based on your conclusions, and then making further adjustments to refine your offering. By understanding customer behaviour and motivation, you’re better able to cater to their needs, and the more you refine on that, the better your results will be. 

Factors That Influence Customer Behaviour

Customer buying behaviour is influenced by internal and external factors. The most important of these is self-interest. When people buy a product or commission a  service, they are doing so because they think it will benefit them. 

In a related point, customers are influenced by their problems, difficulties, and the barriers to satisfaction which they face. These are often termed “pain points,” and understanding how your business addresses them provides a valuable insight. 

Perceptions can also matter. Why do people buy expensive designer goods when they can get the same amount of utility from less well-known brands? Their perception is that they are becoming part of something bigger and better, even when that means paying more than they really need to. 

The role of demographics in shaping customer behaviour can’t be ignored either. For example, older people are more risk averse than younger ones. For instance, 94 percent of people investing in the crypto market are Gen Z or Millennials. Older consumers were slower to respond to what they saw as being a risky investment. 

Finally, culture can also have a huge influence and that could impact you in unexpected ways. The Rolls Royce Silver Shadow was set to be dubbed “Silver Mist” until executives realised that in German, “mist” means “manure.” It’s an extreme example of how culture might influence consumer decisions, but presents a cautionary tale for those who overlook this factor. 

There are other considerations too. For example, the broader economy and the customer’s financial means, marketing campaigns that persuade them a product is worth trying, influence from friends, family, or colleagues, and outright personal preferences are simple examples of these. 

Consumer Behaviour Models

A great deal of thought has already gone into the broad reasons why people buy products. You can use these broader categories to guide you when narrowing down the areas of customer behaviour you would like to research more closely. Examples of customer behaviour models include:

Complex Behaviour

Think about those big purchases you make throughout life: things like buying a house or a car. You’ll put a lot of thought into it and you’ll be going all-out to make the best possible decision. A person who wants to sell you a home or a car must be able to satisfy you with their answers to your questions – and even if they do, you’ll still comparison-shop. 

Dissonance-Reducing Buying Behaviour

Making an unfamiliar purchase and having trouble distinguishing between competing offerings? You’ll feel uneasy and may undertake a series of actions that you hope will reduce your feelings of dissonance. If you feel reassured that you’re making the right decision, you go ahead and make the purchase.

Habitual Buying Behaviour

You buy it because you always buy it. It’s not a matter of brand loyalty as much as it is a force of habit. The purchase itself is a literal “no-brainer.” You just do it on auto. Hoping to compete in this category? You’ll need to get consumer attention and cater to variety seeking, which is our next model.

Variety-Seeking Buying Behaviour

You bought it because you felt like trying something new for a change. For example, you try out a new brand of washing powder. You weren’t unhappy with the brand you bought last time around, you’re just curious about the new one. 

Gathering Customer Behaviour Data

There are many ways to gather customer behaviour data. Sales figures can help, as can individual customer histories. Website analytics show what customers looked at, what they chose, or whether you are losing them along the way. 

You can run short surveys to gather opinions, or you can test the waters on social media, look at repeat purchase behaviour, or see which of your blog posts gets the most attention. But the best way to get information on customer behaviour is to take a closer look at what customers are saying. 

Your customer service staff and their CRM software will be a rich source of information on customer behaviour, particularly customer uncertainties that may be hindering sales. Besides recording what customers are asking, customer service agents can work to get additional information from customers by encouraging them to share their thoughts. 

To understand customer behaviour, you’ll need advanced software to analyse the results of these interactions, but you’ll also need empathetic service agents that will put customers at their ease and encourage interaction. 

That’s just one of the areas where RSVP, a London-based company offering customer lifecycle management services and back office support, can help you. Our handpicked employees are chosen for their interpersonal skills and their dedication to representing our customers’ brands. Get valuable customer behaviour analytics, boost sales, and project the business image you want customers to experience. There’s no time like the present – contact us today and let’s get started with understanding your customers’ buying behaviour. 

Read more about the Customer Lifecycle.

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What is Upselling?

When a customer approaches you in the hope of buying a product and you offer them something similar, but with a higher price-tag, that’s upselling. It’s easy to see how that could backfire, but it can help customers to make choices that better match their needs. For example, your customer may be trying to buy an item that won’t have all the functionality and features he or she will need. In that case, it’s wise to make them aware of the benefits of choosing a higher-priced item as an alternative. 

What is Cross Selling?

The cross-sell vs upsell can be confusing, but when we look at a simple definition, the difference becomes clear. Cross selling means offering your customer related products in addition to the one they were about to buy. They’re things that customers are likely to want once they have the item they’re ordering, so giving them an opportunity to buy everything they need at once saves them time. 

For example, if you’re selling mobile phones, you can offer your customers mobile phone accessories like covers, protective films, or charging stations. As with upselling, the aim is to leave your customer feeling positive about their purchases while simultaneously boosting your revenue. 

Upselling Best Practices and Importance

It’s easy to see that upselling can do good things for your bottom line. But knowing about upselling and knowing how to upsell are two different things. Your aim is to benefit your customer as part of the deal – not to leave them feeling like your hard-nosed sales tactics make doing business with you unpleasant. Here are the principles that distinguish good upselling from dodgy salesmanship. 

It’s personalised. Even customers who buy the same product do so for different reasons. For some of them, the basic package is all they need. But listening carefully to customers and asking them the right questions could reveal additional needs that your business is able to satisfy. 

It’s well-timed. Upselling doesn’t have to occur at the same time as the initial sale. You may find that customers are ready for an upgraded version of your product or service after several months or even years. On the other hand, someone who has chosen an item that won’t meet their current needs must be informed of the possibility and offered an alternative right away. 

Don’t overdo it. You offered the upsell. The customer thought it was a great idea. But the next thing you do is to offer several other options with progressively higher price tags. They can be pardoned for thinking you don’t necessarily have their best interests at heart. Keep it simple. 

Talk benefits. How will your upsell help your customers? If you can’t nail down the benefits clearly, you’re taking a shot in the dark. If there are no real benefits, don’t offer it. If there are, explain them compellingly. Tech specs aren’t enticing. Their benefits to your customers, on the other hand, are. 

Offer a sweet deal. This is a cross-selling technique. Bundled products that work together to meet needs associated with product ownership, and that cost less than they would if bought separately, are a great example. 

Solve their problems. Good salespeople are great listeners. They don’t just rush through with the sale. Instead, they pay attention to the reason why their customers are making a purchase. If the item they’re about to buy doesn’t solve those problems as well as a costlier alternative does, it’s time for the upsell. 

Offer tailoring options. Nowadays, buying a car isn’t just a matter of choosing the make and model. You can opt for any number of extras that personalise the purchase. It’s part of the sales process, so it’s what people expect. They’re ready to think the options through and might opt for the upsell. Thus the product itself is designed to support upselling techniques but will work just fine if the customer doesn’t want the extras. This principle can work well in other contexts too. 

Steps Involved in Upselling

The first step in upselling is to make buying the product the customer initially wanted easy. However, you don’t want them to walk away with an option that won’t suit them. Being able to discover the motivations that lie behind their purchases is among the skills top sales operatives have. If everything checks out, and the customer has chosen a product they’ll be satisfied with, it may be best to skip further upselling attempts and just go ahead with the transaction. There may be opportunities for upselling later on. 

Before you close the interaction, however, you may want to check whether your customers need the extras that come with cross-selling. After all, they complement the purchase currently being made and agreeing to purchase them may benefit your customers. 

At this point, however, upselling and cross-selling aren’t as important as a great customer experience, so tell them what the benefits are and why you think they might need extras – then leave it up to them. Right now, you’re working on building a positive relationship. If you succeed, you’ll be able to keep them informed about new developments and make more sales later. 

As you can see, successful upselling depends on the circumstances in which it occurs and the needs of the customers you serve. Knowing what will be welcome advice from a salesperson, and what will be seen as time-wasting and cut-throat sales tactics takes empathy. Upselling can be a mutually beneficial exercise, but knowing when to do it is almost more important than knowing how to go about it. 

Upselling is More Effective When Real People Do It

You’ve probably encountered a fair amount of automated upselling and cross selling. For example, the “you may also be interested in” items you see before you complete an online purchase. Or have you ever chosen a free version of software only to find that you really want the paid-for functionality – or the ad-free experience? In the latter instance, you probably acquiesced out of sheer frustration! As for the “might also wants,” you’re likely to have taken a glance and declined. 

Truly effective upselling means gauging the individual customer’s needs based on a relatively brief exchange between real people, and it takes empathetic people with great product knowledge to get it just right. RSVP has a handpicked team that delivers superb customer experiences, and they know just how and when to pitch the upsell or cross-sell. If you’re wishing you had a team like this on your side, there’s good news for you: we’re at your service, because service is our core business. 

Our London-based customer lifecycle management service offers unbeatable customer service and sales personnel. We serve you by serving your clients, and our goal is to achieve better results than anything your business could achieve in-house. Are you ready for happy customers and better sales? Contact us today and let’s work together!

Read more about the Customer Lifecycle.

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How do Businesses Acquire Customers?

There are many ways to get new customers. Some of them cost a lot of money, and others don’t. But even old-fashioned local businesses that rely on passing trade will do their utmost to make their businesses look attractive, so there’s always an element of marketing involved. 

Your customer acquisition strategy will depend to a certain degree on the type of business you have. For example, people who offer professional services often rely heavily on networking and referrals. Online retail businesses will count on having good online storefronts, and will attract new customers through advertising and search engine optimisation. 

B2Bs may target businesses that would benefit from their goods and services, and may try to set up meetings with them, send reps to show samples of what’s on offer, attend trade shows, or even cold call to gauge interest and take it from there. 

Customer Acquisition Costs

Although it takes money to make money, it’s important to know your customer acquisition cost. A simple way to do this is to take your marketing cost, and the cost of any facilities or tools you needed in order to make the sale, over a specified period, and divide that by the number of new customers you acquired. It’s not as complicated as it sounds: take the “Cost of Sales” figure from your business’s books, add the cost of your marketing, and you have the baseline figure you need to work from.

If the number of customers you’re getting doesn’t seem to justify the cost, it’s time to restrategise! Before you do though, consider how long a converted customer is likely to support your business and how much money they are likely to spend. What looks like an expensive acquisition could be a valuable one if you can expect cumulative earnings or multiple referrals off the back of that!

What is the Customer Acquisition Funnel?

When you’re developing your customer acquisition strategy, it helps to understand the customer acquisition or sales funnel you’re trying to move prospective customers through. Strategise for each portion of the funnel, remembering that your chances of making that sale improve with each of its stages. 

Awareness

Your first step is to make the right people aware of the fact that your business exists and can help them with its products and services. Think about your ideal customers and where you might find them, be it online or offline. 

Interest

Once they’re aware of your business, it’s up to you to try and pique your audience’s interest. If you can achieve this, they’ll check your business out in greater detail and decide whether supporting it is worthy of consideration. During this process, they might reach out with questions, and your answers will make them decide whether they will move on to the next step: consideration. Not all of them will. Some of them might decide that they don’t need what you offer after all, but those who do are now hot prospects. 

Consideration

During the consideration stage, your prospects think about whether they should follow up on the interest you generated. Once again, they may interact with your business’s representatives or your website. Having given the matter some thought, they will either develop buyer intent, or leave the funnel. But even if they do, they’ll remember your business and may return later or recommend it to other people that they think might benefit from what you do. Your efforts so far are definitely not wasted!

Intent

By the time they reach this stage, your potential customers are very near to making a final purchasing decision. If they haven’t interacted with your business before, they will do so now. They’re not quite ready to become your customer, but if you play your cards right, your chances of winning them over are very good. 

Evaluation

At this point, the prospective customer knows enough about your product or service to weigh up alternatives. They’ll consider what they’re likely to get, they’ll compare the possible benefits with the costs of getting them, they’ll compare you to your competitors, and they’ll have formed an opinion of your customer service. The latter is especially important. Most people are willing to pay more (within reason) if they believe they’re likely to get excellent service in the process. 

Purchase

You’ve reached your initial goal and you’ve gained a new customer! But although you’ve successfully navigated customer acquisition, your work is not yet done. The new focus? Customer retention!

Top Tips for Customer Acquisition

In business, you’ll rarely if ever get something for nothing. Your customer acquisition process gains you customers, but it also costs you money. Use these tips to get better returns on your investment. 

Awareness: Target the right people in the right places. Don’t spread your net too wide or target a demographic that isn’t going to benefit from your products. 

Interest: Get their attention. Craft your marketing messages in such a way that your target market can’t resist finding out more. 

Consideration: Make it easy to find information. Respond quickly and professionally to enquiries. Help customers to find the best match for their needs.

Intent: If you have contact details, now’s the time to follow up and see if your customer needs guidance. Signs of buyer intent are great, but you still don’t have a customer!

Evaluation: Software businesses have an advantage here. They can offer free trials and their customers can use them to evaluate whether the software is right for them. Other businesses might tip the scales in their favour by offering an additional benefit like a discount or a guarantee. 

Purchase: Now’s the time when your product and your people really have to do their stuff. Offer great service and after-sales support to keep your hard-won customers. 

The Human Element is Still the Most Important Element

Doing business remotely may mean that you never meet your customers face to face, but don’t let that lead you into thinking the human element isn’t important to them. 

While some of them may go through the funnel with barely a whisper, many of them will require personal attention at some point. When they do, they’re going to want good answers, and they’re going to want them fast. Make them wait, fail to give them the information they want, and you’ve just given them time to change their minds about supporting your business. 

Can your people be available 24/7? Can you scale customer service and support to handle peaks and troughs on demand? Do they follow up your top prospects and turn them into customers? Are they giving you information about what your customers like and what they struggle with? Are all these questions stressing you out because you know that the answers to some or all of them are “No?”

Relax. You’re invited to get one of the UK’s most established and successful customer service teams on your side: RSVP. Contact us and let’s talk about your customer acquisition process, your customer acquisition strategies and your customer acquisition and retention needs. We make it our business to help your business reach its goals. You’re in charge. We do the legwork – and we do it well. Our customer lifecycle management services will help you to reel those prospects in, and once they become your customers, we’ll be your partners in keeping them that way!

Read more about the Customer Lifecycle.

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In this article, we’ll introduce you to the basics of customer retention including why it’s important, how to improve it, and how to manage it. Could this be a starting point that leads you to a healthier bottom line? Read on to find out!

Why is Customer Retention so Important?

Is it possible that your focus on gaining new customers means that you’re overlooking the need to retain the ones you already have? An interesting set of figures suggests that improving customer retention by as little as 5 percent could increase profits by at least 25 percent. It’s not unreasonable to suppose that there’s something in this. 

The whole process of making people aware of your business, let alone actually buying something from you, clearly costs more than selling things to people who have already supported your business. So, why focus your efforts exclusively on getting ideal customers when you already have a slew of them? Perhaps a little investment in the “converted” can lead to more sales for less effort!

While new customers are always a welcome addition, retained customers will think of you first when they need what you offer, and as long as they’re happy, they’ll prefer your business over a company they haven’t dealt with before. 

Customer Retention Rate: How are You Doing?

Everyone likes to think that their efforts have pleased their customers and they’ll be back for more. But are they really getting it right? The only way to know is to measure it, and there are several metrics that are of interest. Here are a few of the best.

Customer Retention Rate (CRR)

It’s super-easy to calculate your CRR. Know how many customers you gained over a set timeframe. Subtract that from the number of customers you have at the end of that time, and turn it into a percentage by multiplying that number by 100. This metric applies best to subscription services. 

Repeat Purchase Rate (RPR)

Once again, set a timeframe. Now, see how many people who bought from you before purchased something else during that time frame. Take that number, divide it by your total number of customers, and add the multiplier to get a percentage. This metric is frequently chosen by E-commerce businesses. 

Customer Churn Rate

Churn rate tells you how many customers stopped doing business with you over a specific timeframe, and it’s also expressed as a percentage. If your business offers services based on monthly or yearly contracts, reducing churn will be among your priorities. 

Customer Lifetime Value (LTV)

The customer lifetime value metric tells you how much you can expect the average customer to spend with you. To discover this figure, the average value of orders is multiplied by the average number of times people will buy from you and factor the average time that customers continue to support your business into account.  

Customer Satisfaction Score (CSAT)

Obviously, the more satisfied your customers are, the more likely you are to retain them. Surveying customers after they’ve made their purchase helps you to calculate what percentage of the ones who responded were happy with their purchases. 

Net Promoter Score (NPS)

“On a scale of one to ten, how likely are you to recommend our business to friends and family?” If you’ve seen this little survey question, its answers help businesses to determine their NPS. Its primary purpose is to work out whether they can expect referrals. However, it’s also a good indicator of customer satisfaction and the potential for customer retention. 

How to Improve Customer Retention

The first important step in improving customer retention is to commit to it. Make it a priority. Develop strategies that will incentivise converted customers to make repeat purchases. Use your metrics to set clearly defined goals for improvement. Try new things and see how they work for your business. Here are a few ideas. Tip: you might get the best ones from your customers themselves!

• Offer the best in customer service and support
• Start a loyalty programme with awesome rewards
• Collect customer feedback
• Address issues promptly and turn detractors into promoters
• Start a referral program with incentives
• Offer options for personalisation
• Make it easy to do business with you
• Listen to customer pain points and address them

Customer Retention Made Easy

If you’re looking at all this information and thinking that customer retention management looks like hard work, we can confirm that it is! But here’s the good news: you don’t have to do it all yourself. At RSVP, we offer customer lifecycle management services that help you by identifying what keeps your clients as active supporters of your business. 

Hoping to create a welcome campaign that makes your new customers feel valued? Trying to discover the top reasons why customers abandon their accounts? Have plans to upsell and add to your customer lifetime value? Skip the learning curve and the legwork. Contact us today and get our team on your side. Your product plus our people makes for a winning combination.

Read more about the Customer Lifecycle.

The post What is Customer Retention and Why is it So Important? appeared first on RSVP Call Centre.