With customers having more control over where to get products and services these days, customer retention has never been more important for businesses of all sizes. Customers with strong brand loyalty are incredibly important since they are a dependable source of revenue and are great ambassadors for your brand—they are a way to make your business known to their peers. Moreover, retaining customers is also considered more cost-effective than acquiring new customers.
Improving customer retention requireshaving the right sets of data and knowing what to do with them. Surprisingly, not all marketers gather and use enough relevant data for developing customer retention strategies. If you own a business and want to stay at the top of the competition, you can leverage analytics and use the latest appropriate software to better understand what makes your customers tick.You can then use that information to formulate more effective customer retention strategies.
What Your Customers Want: Keeping Your Finger on the Pulse
Using advanced tools for measuring customer retention, it’s possible to have a more accurate analysis of certain kinds of data thatcan help you better navigate the world of subscription-based economy. Some of these data include those that deal with demographics, usage statistics, payment-related information (e.g. payment transaction failures), and departures (e.g. cancellations, refunds, and opt-outs).
Some people may think that a lot of these information are too ambiguous to engender accurate analysis, but they can actually be structured in a way, which, when run through the right formulas, can give you valuable insights that can help you make better business decisions. For example, a single negative feedback may suggest a “warning” that a customer couldend up buying elsewhere if they’re not satisfied with the product or service on offer. While they haven’t necessarily made the switch, the data is still a good indication that something about the product or service might have to be improved upon. This becomes even more evident when similar negative feedbacks are seen in more customers and across different touchpoints.
Customer Retention and Customer Value
With the right analytics tools, it’s also possible for you to monitor customer value metrics like customer lifetime value (CLTV), average customer lifetime value (ACLV), average revenue per user (ARPU), average revenue per paying user (ARPPU), and monthly recurring revenue (MRR).Metrics such as thesehelp identify which customers can be considered “high priority customers” — the ones that stay the longest, buys the most over time, and requires the least resources to keep them engaged.
Concentrating on valuable customersis a different approach to the method that focuses more on acquiringnew customers, but both approaches can work hand-in-hand to increase both customer retention and customer volume at the same time.
Furthermore, by taking a closer look at information about churning customers, it will be easier to pinpoint the common reasons why people choose to switch to another brand. Your customer service department can then focus on addressing these issues and reminding customers the value of your product, making them less likely to leave.
Sometimes, customers leave even if they don’t want to. With limited payment options, customers who suddenly lose access to their current payment option might find it too troublesome to find a replacement card ASAP and just choose to drop their subscriptions. Analytics can easily show if your business is losing a significant amount of customers to payment issues and other factors that are beyond their control. By using billing solutions that feature secure backup payment methods and automated transaction retries, payment issues are minimized and customers have some breathing room to find new payment methods.
There’s no denying that accurate analytics is the key to better customer retention. By using the information to your advantage, your business will be more successful at keeping your customers happy and engaged in the long run.