Every day businesses work hard to attract and retain customers. It takes a lot of time and effort to attract customers. But it takes even more effort to keep those customers around, happy, and loyal. Sometimes the benefits of customer retention are lost with the hype of customer acquisition. It’s very exciting to get new customers, but customer retention can be a profitable strategy.
Customer retention software can be useful for increasing retention, reducing churn, and improving the overall customer experience. This type of technology connects teams across various departments to provide a positive customer and service experience. When you focus on activities that decrease customer churn, you’re reducing the chance that a customer will leave you for the competition.
In this article, we try to understand how customer retention software can benefit your business and the features to look for when investing in a customer retention platform.
Skip ahead to:
- What is customer retention software?
- What are the benefits of customer retention software?
- 9 key elements your customer retention software needs
What is customer retention software?
Before we dive into customer retention software, let’s break down what customer retention means and how it impacts your business. Customer retention refers to a company’s ability to turn customers into repeat customers and stop them from going to a competitor. Because a repeat customer is more likely to make a purchase with you again and again, they become more valuable over time. Although 76% of businesses agree that customer lifetime value is an important concept of their company, only 18% of businesses focus on customer retention.
Customer retention focuses on people who have signed up for your service or purchased products from you. Keeping hold of your customers is about more than a transaction; it’s about maintaining the customer relationship. Often, two of the most important metrics for a start-up or any business really are customer retention and churn. Churn is on the other end of the spectrum. Also known as customer attrition, these are the customers who don’t return to your business after making a purchase.
So, the aim of customer retention software is to increase retention. It does this by taking tasks that are scattered throughout different departments and transforming your retention strategy into a unified approach. This means that it will take little to no energy to collect customer data at each touchpoint. You can then use this data to make informed decisions on the customer experience that have a bigger impact on your retention and attrition rate.
What are the benefits of customer retention software?
The main benefits of customer retention software come from the way it allows you to harness data from your customers. We live in a time where you have more access to data than ever before. The problem is that it can be difficult to take a set of data points and translate that into actionable steps that make a real difference. Customer retention software can specifically help with making business decisions to improve the entire customer journey.
Improve customer satisfaction
The key to customer satisfaction is to provide a product or service that’s seamless. One of the biggest influencing factors of customer retention is customer satisfaction. To maximize your retention rate, it’s important to think about the connection between customer satisfaction and retention. It’s not necessarily true that a satisfied customer will stick with your brand, but it’s more likely they will trust your brand.
Increase customer loyalty
Brand loyalty is a natural result of improving customer satisfaction, experience, and delivering a personalized experience that customers expect nowadays. The best customer retention strategies and the processes you put in place build customer loyalty and improve customer lifetime value over time.
Protect your brand’s reputation
As you work to improve the customer experience and increase retention, it can help to protect your brand’s reputation in the process. Activities like dealing with complaints seamlessly and implementing changes before there’s a problem are dual-purpose. They help to increase retention while managing your brand’s reputation and servicing customers.
When there’s a lot going on, it can be difficult to identify potentially profitable opportunities within your business. By taking your customer data and offering a seamless approach to customer retention, you can identify opportunities that could benefit your business. This also applies to identifying elements of the business that you can improve to remove any obstacle within the customer experience and journey.
For expert insight, listen to Dr. Paul Bedford, an industry-leading expert on retention and owner of the Retention Guru. Paul talks about retention now and in the future. He explains the fundamentals of what makes a great retention strategy and how to create an engaging customer experience.
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9 key elements your customer retention software needs
The reason that customer retention is such an important aspect of a business is that it’s more expensive to acquire a new customer than turn an existing one into a repeat purchaser. Acquiring a new customer costs five times more than retaining an existing one. All that marketing and sales activity requires a big outlay in comparison to retaining customers. If you’re thinking about investing in customer retention software or looking to upgrade your current system, here are nine key elements your platform needs.
1. Intuitive interface
Sometimes the thought of implementing a new system or software can stop you from making the jump. You have to learn how to use the platform from scratch and the thought of getting to grips with a complex tool stands in your way. That’s why it’s important to opt for software that’s simple to use with an intuitive interface. In addition to this, an intuitive solution is a must for your customers. Your customers don’t want to interact with anything that’s overly complicated and this applies to the very first contact with your business. Signing up to your business, making a purchase, onboarding a new customer, and opting in for updates should be as seamless as possible.
2. Social media integration
Customer retention can help to improve communication and messaging, provide valuable data insight, and identify and reward your loyal customers. Nowadays, social media is a huge part of your brand communication and customer engagement plan. Social media integration is essential for monitoring social sharing, mentions, comments, and posts. This is especially important for promotional competitions on social channels and for tracking your loyalty program. It’s also vital to track social media metrics so that you can take actionable steps within your social media marketing strategy and greater social media presence.
3. Segmentation features
Customer retention software gives you the ability to harness customer data. It’s useful to have a platform with segmentation abilities. With this can divide your customer base and make actionable plans based on specific information. If you can analyze and segment your customer base, you can create targeted campaigns that drive retention. That means that you can use data more effectively for business decisions. Another way segmentation is useful is within your loyalty programs. It’s difficult to have one prize or reward that works for all of your customers. It’s entirely normal to have different customer personas with varying hopes, fears, and wants. Customer segmentation plays an important role in loyalty. It helps you to craft more effective marketing campaigns and communicate with your audience. So, it’s worth integrating segmentation into your analytics.
4. Insight and data analytics
A crucial part of your customer retention software is analytics. The platform helps to effortlessly collect customer data and analyze it in a way that makes sense for you. By using software to track metrics like customer satisfaction and customer behavior, you can figure out what’s working and what needs to change. Your customers produce so much data throughout the customer journey. It’s almost impossible to make sense of that data without using technology. By connecting all the data, you get a comprehensive overview of your customers in real-time. From this, you can find ways to better engage with your customers, create more successful marketing campaigns, and boost retention in the long run.
A CRM (customer relationship management) system helps to manage your customer relationships, but it also has a role to play in retention. A CRM system can help you to improve the sales process, buying journey, customer satisfaction, and marketing efforts. All of these support and increase customer retention. If you’re looking for a system that you can implement across all departments, a CRM system usually features powerful marketing automation, sales, and service capabilities. The idea is that a CRM creates a seamless customer experience and gives you the opportunity to step in at every touchpoint to turn an existing customer into a repeat one. This means stepping in at the right time with the correct communication, marketing, and upsell to keep a customer engaged.
6. Customer loyalty program and referrals
Customer retention software can also track and identify loyal customers. This helps to both create happy customers and encourage them to bring new customers to your brand. According to the 2020 Loyalty Report, 72% of customers are more likely to recommend brands that have good loyalty programs. Loyalty programs are also more likely to keep customers doing business with those brands. Retention software can help you manage loyalty and referral programs so that you can reward loyal customers and continue to build your brand. A good loyalty rewards program is simple, offers relevant rewards and incentives, and gives you valuable data that you can integrate into your marketing mix.
7. Customer feedback
Another key element within customer retention is customer feedback. Gathering feedback from your customers is essential for spotting trends, opportunities, and making your customers feel heard. From these insights, you can gauge how well you’re performing in the eyes of your customers. A company that actively seeks and monitors feedback could then use this information to improve your website or fix a problem within the customer journey. It’s another way that you can gather data, understand your customers’ needs, and find opportunities that contribute to customer retention. There are various ways that you can gather customer feedback. The main thing is that you have one dashboard. Here you can see all the information to give you that comprehensive top-level information.
Gamification encourages your customers to take certain actions by making it fun. The action could be to sign up to your newsletter, refer a friend, make another purchase, or share their experience on social media. Whatever you’re trying to do, gamification makes the experience more enjoyable for the user. As a customer retention tool, it’s useful to integrate gamification into your customer loyalty program. This could mean including quizzes, leaderboards, badges, and other prizes that showcase customer loyalty. Essentially, gamification encourages users to keep performing certain actions because it’s fun.
Personalization has a part to play across various departments including sales and marketing. As a retention tool, personalization allows you to create completely relevant customer experiences. By collecting data and delivering a personalized experience, it has a naturally positive effect on customer retention. You can implement personalization throughout your customer retention strategy. Through segmentation capabilities, you can offer personalized content and rewards to customers. There are so many touchpoints where you can implement personalization to make a big impact including emails, follow-up automation, and personalized content.
Depending on your needs as a business, customer retention software can be an all-in-one CRM system for your marketing, sales, and service needs. By gathering feedback and collecting customer data into one destination, you can harness your data to maximize customer retention. Increasing customer retention and reducing member churn is a key part of a successful business. While it’s great to attract new customers with amazing content and marketing campaigns, businesses need to retain existing customers to come out on top.
We live in a time where data is everywhere and the key to making more impactful business decisions is understanding that data. It’s turning numbers and data sequences into actionable steps that your employees can implement to boost the customer experience. Through customer retention software, you can identify opportunities, increase customer satisfaction, and continue to turn one-off customers into repeat and loyal customers.