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  • Daman Soni

5 Ideas that I have used to Improve Customer Retention

Most of the new businesses fail not because they cannot attract customers, but because they don’t have a retention strategy in place.

Customer Retention Strategy

Retention is the new acquisition. Retained users are critical for increasing Lifetime Value of Users (LTV). Any given day it is easier to retain a user than to get a new user in without throwing money at the problem. Customer retention can not only help you stretch your current marketing and sales budget, but it can help you develop brand loyalty, gain referrals, and enhance your service overall.

Most of the new businesses fail not because they can’t attract new customers, but because they don’t have customer retention strategies in place.

Churn is killing them.

Here are some ideas that I have worked with to increase customer retention

1. Create a loyalty program that is aligned with your business goals

Incentivise actions that matter most to your business metrics. A grocery app may want a user to order more frequently in a month and capture greater wallet share. Here, creating a gold tier for power users will drive more users to increase their purchases. A social media app may want to drive more user engagement hence a VIP section in the app may open up features for power users which will, in turn, drive users to engage with the app more.

Watch out for using a plug and play loyalty programs. It may not be in the best interest of your business to simply add tiers or give out loyalty points for an action that is not adding value to your business objectives.

2. Transparency and Honesty

Be clear about charges and policies. A grocery app that I worked with wanted to charge their users a delivery fee and did so in the most transparent way. The CEO wrote a message to all users explaining that to maintain the quality standards the company was incurring increased costs and it would be unsustainable for the company to continue bearing the cost. The message (which appeared as an in-app pop up) was taken very positively by most of the user base and led to users increasing their spend on the app

3. Create a community

Communities drive discussions and help the users ‘belong’. Additionally, with the users being able to give feedback as a community the brand can improve on its product and services. Trek Cycles places a huge focus in creating a community around their cycles so that cyclists can reach out to each other to exchange ideas and participate in events. At a messaging app, we created a community of sticker creators. The community shared best practices with each other and got deeply involved with the Line Creators platform this in turn brought more sticker creators on board.

4. Continually Invest in improving recommendations

The better a company can predict its users’ preferences the more it can serve them efficiently. Payment apps figure out when the phone bill is due and send reminders to users, eCommerce companies use data from millions of transactions on their platforms to upsell and cross-sell products to users. If the user can find solutions besides the main problem for which she fired up the app, she will tend to hang on longer and add another transaction to the mix. Show the recommendations at the right time without interrupting the user's purchase flow.

5. Keep Evolving the product to make things easy for the user

Use cases which become mainstay over time should be made easier for the user. Some companies let the users opt-in for an auto top-up of their wallet so that their purchase experience is not interrupted. Others bring the most used functionality right upfront e.g. coupon discovery on the payment screen.

In conclusion, it is important to keep focussing on customer experience at all times. Additionally, there many more methods to improve customer retention, keep experimenting with what works for your company. Your strategies will evolve over time. It is important that the instrumentation is well designed so that you have access to relevant data and analytics which helps you understand the user journey and retention rate. Leverage these insights you to optimize your marketing and sales processes to keep customers engaged and increase your retention rate. More retention tactics here.


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