{"id":27948,"date":"2020-03-03T10:06:00","date_gmt":"2020-03-03T17:06:00","guid":{"rendered":"https:\/\/bamf.com\/?p=27948"},"modified":"2020-06-26T15:07:03","modified_gmt":"2020-06-26T22:07:03","slug":"customer-retention","status":"publish","type":"post","link":"https:\/\/bamf.com\/customer-retention\/","title":{"rendered":"16 Cutting-Edge Customer Retention Strategies For 2020"},"content":{"rendered":"\r\n
Having unnecessarily high churn rates that you\u2019d love to improve? I have prepared 16 cutting-edge, research-backed customer retention strategies for 2020. You should definitely try these out!\u00a0<\/em><\/h5>\r\n\r\n

Increasing your customer retention rates is an investment that is always worthwhile.\u00a0<\/p>\r\n\r\n

Customers are what shapes the success of your business. In fact, according to CallMiner<\/a>, U.S. companies lose as much as $136.8 billion per year, due to customer switching that is completely avoidable.\u00a0<\/p>\r\n\r\n

With an ever-evolving digital marketing space, direct responses and inbound tactics are easier than ever.\u00a0<\/p>\r\n\r\n

However, with every business doing the same thing, you have a double-edged sword in your hands.\u00a0<\/p>\r\n\r\n

On one hand, customers expect that you have the same CRM systems in place as your competitors. Emails, Social Media support, and telemarketing support <\/em>are a must.\u00a0<\/p>\r\n\r\n

On the other edge of the sword, poorly implemented tactics can result in the loss of your clients.\u00a0<\/p>\r\n\r\n

So, how do you go about increasing your client retention rates? <\/em>????\u200d\u2642\ufe0f\u00a0<\/p>\r\n\r\n

It\u2019s easy and simple. And I’m to show you just how to do it.\u00a0<\/p>\r\n\r\n

But first, what is all the fuss<\/em> about?\u00a0<\/p>\r\n\r\n

Table of Contents<\/strong><\/p>\r\n\r\n

Understand that CRM is a Founding Part of the Profit Equation (Calculate your LTVs) <\/a><\/p>\r\n\r\n

How do you decide how much to invest in customer retention? <\/a><\/p>\r\n\r\n

The 16 MOST Cutting-Edge Customer Retention Strategies for 2020 <\/a><\/p>\r\n\r\n

Test Your Customer Response Management Process <\/a><\/p>\r\n\r\n

Address the Most Common CRM Issues by Thinking Outside of the Box <\/a><\/p>\r\n\r\n

Think Personal Instead of Global <\/a><\/p>\r\n\r\n

Build Out a Gamification System that Rewards LTV <\/a><\/p>\r\n\r\n

Use Loyalty Program to Reward your Most Active Customer <\/a><\/p>\r\n\r\n

Improve your Customer Retention with an Engaging Company Mission <\/a><\/p>\r\n\r\n

Implement Direct Digital Response Tactics on Social Media <\/a><\/p>\r\n\r\n

Focus on the Quality of your Customer Response <\/a><\/p>\r\n\r\n

Chatbots are the future. Get on the Trend Sooner, Rather than Later. <\/a><\/p>\r\n\r\n

Actively Communicate with your Customers <\/a><\/p>\r\n\r\n

Position Yourself as the “Customer Whisperer” in your Industry <\/a><\/p>\r\n\r\n

Build out Experiences to Engage Customers with your Brand Values <\/a><\/p>\r\n\r\n

Leverage Social, Authority and Scientific Proof <\/a><\/p>\r\n\r\n

Actively Improve the Relationship with your Customers <\/a><\/p>\r\n\r\n

Ensure that your Employees are Active Brand Advocates <\/a><\/p>\r\n\r\n

Be Proactive in the Customer Perception of your Product Pricing <\/a><\/p>\r\n\r\n

Conclusion <\/a><\/p>\r\n\r\n

Understand that CRM is a Founding Part of the Profit Equation (Calculate your LTVs)\u00a0<\/strong><\/h2>\r\n\r\n

I\u2019ve seen a lot of business owners stumble upon CRM tactics after the fact<\/em>.\u00a0<\/p>\r\n\r\n

In building a strategy, they consider the cost of the product, calculate the profit margins, jump on a marketing tactic and wait.\u00a0<\/p>\r\n\r\n

Yet, in about a year or two, they wonder WHY isn\u2019t their business successful.\u00a0<\/em><\/p>\r\n\r\n

It was boasting profits in the beginning, so what\u2019s changed?\u00a0<\/p>\r\n\r\n

Well, you\u2019ve considered ONLY your customer acquisition costs. Have you thought about the experience they have ONCE they purchase?\u00a0<\/p>\r\n\r\n

According to research posted in Harvard Business Review<\/a> increasing your customer retention rates by JUST 5% can result in an overall increase in the profits of your business anywhere from 25% to 95%.\u00a0<\/p>\r\n\r\n

The reason?\u00a0<\/p>\r\n\r\n

Client retention isn\u2019t simply an extension of their subscription service or another purchase. It\u2019s an increase over the course of the lifetime period of your customer.\u00a0<\/p>\r\n\r\n

To understand the impact client retention has on your business, you must first make sure that your KPIs and profit calculations are based on the value a customer has for your business.\u00a0<\/p>\r\n\r\n

This will help you make better investment decisions for your business, rather than just focusing on your customer retention score.\u00a0<\/p>\r\n\r\n

How Starbucks uses LTV to Be Profitable even in Unstable Market Conditions\u00a0<\/strong><\/h3>\r\n\r\n

As estimated in a case study by KISSMetrics<\/a>, the average lifetime value of a Starbucks customer is $14,099.\u00a0<\/p>\r\n\r\n

Having this number, Starbucks is easily able to calculate how much they would be able to invest in their customer acquisition and customer retention strategies.\u00a0<\/p>\r\n\r\n

\r\n
\"Customer<\/figure>\r\n<\/div>\r\n\r\n

While speculative, a huge part of the reason why the LTV of a customer of Starbucks is so high, despite their relatively low-profit margins per product is the customer satisfaction rates they have. (62% Very Satisfied, 27% Satisfied and 11% Not Satisfied)\u00a0<\/em><\/p>\r\n\r\n

Despite the shaky economy in the first part of the 2010s, Starbucks continued to successfully open new stores. The reason for their confidence?\u00a0<\/p>\r\n\r\n

Knowing their KPIs and making sound business decisions, despite overall market conditions.\u00a0<\/p>\r\n\r\n

How do you decide how much to invest in customer retention?\u00a0<\/strong><\/h3>\r\n\r\n

Go back to your KPIs and add these numbers. Start building your business analysis and profitability analysis based on your LTV to CAC ratio value instead of simple profit margins.\u00a0<\/p>\r\n\r\n

    \r\n
  1. Average Customer Lifetime <\/strong>– The average time a customer spends with your brand\u00a0<\/em><\/li>\r\n
  2. Average Customer Value <\/strong>– The average value a customer brings to your business for a period of time\u00a0<\/em><\/li>\r\n
  3. Lifetime Value<\/strong> – The average value a customer brings to your business for their lifetime with your brand\u00a0<\/em><\/li>\r\n
  4. Customer Acquisition Cost<\/strong> – The average spend your business makes to acquire a new customer\u00a0<\/em><\/li>\r\n
  5. Lifetime Value to Customer Acquisition Cost ratio<\/strong> – The LTV to CAC value\u00a0<\/em><\/li>\r\n<\/ol>\r\n\r\n

    Analyze Where to Spend More\u00a0<\/strong><\/p>\r\n\r\n

    Step #1: Analyze your CAC based on Industry Averages\u00a0\u2714<\/p>\r\n\r\n

    Locate and find research in your industry that shows whether your CAC is within the boundaries of normal. DemandJump is a great resource.\u00a0<\/em><\/a><\/p>\r\n\r\n

    If it\u2019s lower, that\u2019s great! If it\u2019s higher, it means that you should optimize your customer acquisition process.\u00a0<\/p>\r\n\r\n

    Step #2: Check your CAC to LTV Ratio\u00a0\u2714<\/p>\r\n\r\n

    It\u2019s universally accepted that 3.1 to 1 is a good CAC to LTV Ratio for a business.\u00a0<\/p>\r\n\r\n

    If your acquisition costs are normal or within the target, but your ratio is too low, it means that you should spend more and optimize your customer retention process.\u00a0<\/p>\r\n\r\n

    If it\u2019s too high, then a good rule of thumb is that you should invest both in your customer acquisition process, but also your customer retention process as well.\u00a0<\/p>\r\n\r\n

    The 16 MOST Cutting-Edge Customer Retention Strategies for 2020\u00a0<\/strong><\/h2>\r\n\r\n

    Now that you understand the importance of customer retention and response management, let\u2019s talk about the tactics you can use to improve them.\u00a0<\/p>\r\n\r\n

    Here are the top 16 cutting-edge customer retention strategies for 2020, alongside tips on how to implement them in your existing business.\u00a0<\/p>\r\n\r\n

    TEST YOUR CUSTOMER RESPONSE MANAGEMENT PROCESS\u00a0<\/strong><\/h3>\r\n\r\n

    According to Forrester<\/a>, As much as 69% of U.S. Customers shop more with retailers that offer great customer service both offline and online.\u00a0<\/p>\r\n\r\n

    And as much as 71% of customers end their relationship with a business because of poor customer service<\/a>.\u00a0<\/p>\r\n\r\n

    This means only one thing — to increase your customer retention, you should make sure that your customer response management process goes above and beyond the expectations.\u00a0<\/p>\r\n\r\n

    How to achieve it?\u00a0<\/strong><\/h4>\r\n\r\n

    The best way to test your CRM system?\u00a0<\/p>\r\n\r\n

    EMPLOY CRM TESTING AGENTS OR DO IT YOURSELF\u00a0<\/strong><\/p>\r\n\r\n

    \r\n
    \"Customer\r\n
    Make sure that your request appears legit\u00a0<\/em><\/figcaption>\r\n<\/figure>\r\n<\/div>\r\n\r\n

    To understand all the points of improvement that can be made in your CRM process, you should ensure that the test is completed in a proper manner.\u00a0<\/p>\r\n\r\n

      \r\n
    1. Ensure that the \u201cfake\u201d client has an account with your service\/business and that they seem like a real existing customer\u00a0<\/em><\/li>\r\n
    2. Build out testing scenarios for common issues with CRM based on your particular service\/product\u00a0<\/em><\/li>\r\n
    3. Build out a few test scenarios for edge cases\u00a0<\/em><\/li>\r\n
    4. Have a \u201ctest\u201d score sheet and record your experience\u00a0<\/em><\/li>\r\n
    5. Implement the test presenting yourself as the client\u00a0<\/em><\/li>\r\n
    6. Analyze the key points of improvement and build out a plan for action\u00a0<\/em><\/li>\r\n<\/ol>\r\n\r\n

      ADDRESS THE MOST COMMON CRM ISSUES BY THINKING OUTSIDE THE BOX\u00a0<\/strong><\/h3>\r\n\r\n

      Is there a recurring or common issue customers are having with your business?\u00a0<\/p>\r\n\r\n

      Start thinking outside the box. ????\u00a0<\/p>\r\n\r\n

      \"\"<\/figure>\r\n\r\n

      Vodafone UK is a great example of how this can be done. A few years ago, they implemented an interactive graphical map that showed the real-time status of their network.\u00a0<\/p>\r\n\r\n

      The results? (As shared by eConsultancy<\/a>)\u00a0<\/p>\r\n\r\n