Acquiring a new customer can cost anywhere between 5 and 25 times as much as retaining an existing one, but many companies are still focusing their efforts on customer acquisition. So, here’s five drivers of customer loyalty in the coming years and some suggestions of how you can turn customers into loyal advocates.
- How do brands exceed customer expectations?
The customer has certain expectations when they come to your business. Make sure these expectations are met, and then go one better. Take Five Guys, for example. They offer free peanuts while you wait, a simple but highly customisable menu and an extra portion of chips in the bag. These simple extras are an easy way to exceed the customers’ expectations and leave them with a more positive memory of their experience, thus driving future loyalty and engagement.
This isn’t just limited to restaurants though – every industry can get involved:
- Hotels – One of the top drivers of customer loyalty in the hotel industry is offering your guests a personalised welcome pack with a customised suggested itinerary. Leading hotels often remember guest preferences, such as dietary requirements or room service requests, for repeat visits.
- Banks – Offer personalised spending insights and budgeting advice to customers as well as recommending saving opportunities and promotions based on purchase history, all to save customer’s money.
- Shops – Offer a personalised welcome using apps, a free gift wrapping service, complementary food and drink whilst browsing. Leading stores even offer in-store music requests to create an immersive experience far beyond the purchase.
- How do brands offer personalisation – one of the top drivers of customer loyalty?
Customers want to feel special. Many companies collect customer data but then don’t use it to enhance the customer experience and drive loyalty. A rookie mistake really, when the technology is out there to do it for you.
Segmentation is key to this. All good CRM systems have the ability to assign characteristics to customers, which allows you to develop deep customer insights and create highly personalised content. There are many companies offering this, including:
- Optimzely and Visual Web Optimiser – These are website optimisation platforms which allow you to target different customer segments with different versions of the website, as well as testing different versions of web pages, to optimise sales or lead generation.
- MailChimp – Allows you to send highly personalised e-mails to customer segments, increasing the click through rate and conversion rate of e-mails. Personalised e-mails deliver six times higher transaction rates than generic ones. Following segmentation and personalisation, clothing retailer, Johnny Cupcakes, reported a 42% increase in click through, a 123% increase in conversion and a massive 141% increase in revenue per e-mail campaign.
- Triggered e-mails – E-mails sent to customers following a specific action are incredibly effective with a 152% higher click through rate than traditional campaigns. Triggers can include abandoned carts, a price drop for a saved item or, cross selling after a purchase.
- Hubspot – Having a connected CRM is vital to generating key insights, but it’s no use having a mail hub that doesn’t connect to your marketing or customer support systems. Hubspot provides a free CRM and low cost packages that allow you to maximise customer growth as well as easy integration with existing platforms such as MailChimp.
- How do brands embrace Artificial Intelligence?
Chat bots such as Twyla integrate into your existing systems, including CRM and web support apps and learn from agents in order to provide a highly personalised service. Having access to assistance when they want it will drastically increase your customers’ experience, driving loyalty and increasing sales. Live chat is shown to have the highest satisfaction levels for any of the usual customer service channels – beating both e-mail and phone.
In the US, Amtrak generated an 800% ROI and saved $1M in their first year after implementing chatbots across their website. They also generated 30% more revenue. In total, the chatbots answered over five million queries.
- What about partnerships?
The right partnership can have a huge impact on purchasing and repeat custom for your business. Take a deep dive into what your customers want and look at how you can team up with other companies to deliver this in new, innovative ways.
Amazon Logistics have partnered with a number of ‘click and collect’ services, such as Pass My Parcel, allowing customers to collect their parcels from a local convenience store, rather than having to be at home for delivery. Although there is a cost to providing this service, click and collect is experiencing astronomical growth and this will continue to rise in 2020.
It’s not just partnerships in sales that matter. Vitality Health Insurance partnered with Virgin Active to offer reduced gym membership to its policy holders. Offering member-only privileges like this is a proven method to boost customer loyalty, as customers respond better to instant gratification than to points based rewards.
- How do brands surprise and delight the customer?
Small gestures go a long way when looking for the top drivers of customer loyalty. Customers want to feel appreciated, but a recent study found 2/3 of customers thought that brands don’t recognise the benefits of ‘surprise and delight’ offers.
A recent survey revealed that 95% of customers felt that surprise and delight left them with an increased positive view of the brand. Over half shared the positive experience with friends and family, and more than 1 in 3 revealed that the experience resulted in them giving the company more business.
Studies have shown that the best way to surprise and delight include:
- Gifts for long-time customers
- Birthday discounts
- Recognising high spending customers
- Targeted gifts over holidays based on purchases
Putting the ideas above into your work should allow you to get a better handle on how to keep customers genuinely happy. Knowing why you do what you do when it comes to customer retention makes a huge difference.