While capturing the attention of consumers that have not yet formed a connection with a brand is typically a priority for businesses, it's also important not to overlook current customers. In fact, according to analytics solution provider Pointillist, supporting strong customer retention can actually provide a much better return on investment, and costs as much as 25 times less than customer acquisition efforts.
In order to improve retention, though, companies must have the right data and insights on hand, including some key pieces of information like:
1) Demographic and location data
"Customer retention can provide a better return on investment, and costs as much as 25 times less than customer acquisition efforts."
While this may seem obvious, details about where a customer lives, their age range, gender, educational and income level, and even marital status can tell a business a considerable amount about shoppers and their potential preferences. For instance, when curating items for a subscription box, it's best to avoid tropical-themed merchandise or beach attire for someone living in a landlocked area, or a region with primarily cold weather.
In addition, Kumar Arora of Aroridex Ltd. told Inc. magazine that because customers often change their email address more frequently than their physical address, the latter is something that can be leveraged for outreach and retention possibly for years.
"[S]ending them the occasional letter, holiday card, or thank-you note is something customers appreciate, which allows you to have communication beyond the traditional avenues," Arora noted.
2) Data about their customer journey
Pointillist contributor Swati Sahai noted that it's imperative to take an end-to-end view of the interactions customers have with the business, as opposed to simply examining their last click ahead of purchase, or directly before cart abandonment or churn. Mapping the customer experience can provide powerful data for customer retention efforts, including the ways in which the business can streamline its path to purchase, or the areas where more content or additional offerings might be beneficial.
"Different customers will have different experiences and you will visually be able to see each one the various touchpoints encountered and the actions taken from there," Sahai wrote. "To discover the root causes of churn, you need to look at the complete customer journey or you will likely reach the wrong conclusions. Conversely, not understanding what makes your loyal customers feel valued is also not helpful."
3) Net promoter score
Delving a little deeper, it's also beneficial for businesses to understand whether or not current customers would recommend the brand to friends or family. Mattan Griffel of One Month told Inc. that the company asks customers to rate the likeliness of a recommendation on a scale of one to ten, and uses this information to establish and continually track the Net Promoter Score.
"We always follow up the question with a 'Why?' and we get lots of really important insights from this simple question," Griffel said.
Businesses within any industry should look to leverage customer data to their advantage, especially subscription-based brands. Supporting efforts to improve retention and prevent churn is a critical initiative that can make a considerable difference for differentiating within a competitive market as well.