How Personalization Can Help Reduce Customer Churn
“Great customer success is perhaps the single greatest defense you have against high churn.” – Retently
“We are living and working in the era of the customer, and customers are demanding exceptional customer service and experiences. When they don’t receive it, they flock to competitors…” – NG Data
“Businesses can pour money into elaborate advertising campaigns, but bad customer service can undo all that hard work instantly.” – Salesforce
When something is broken in your business, it can be difficult to come together as a team and identify the root of the problem. In the case of customer churn, however, there’s a powerful consensus among industry experts who say that your customer service strategy can make or break a retention rate.
To help reduce customer churn, a business needs to first look inward at their customer service offering and recognize where it’s falling short. More often than not, weaknesses present themselves in the form of impersonal messaging and inefficient solution resolution processes.
Big data can be a brand’s best tool for getting to know its customers and an excellent customer data platform is crucial. By collecting and organizing customer data, it’s possible to recognize where an individual’s needs and interests lay, and identify points where your offering can dovetail as the perfect solution.
Ask yourself what steps you’re taking to ensure that every engagement with every customer is directly relevant to their unique experience with your brand. At a time when personalized content is nearly expected across all points of a client-brand relationship, it’s important to deliver relevancy. (Because if you don’t, another brand will.)
How Do We Know Personalization Matters?
Let’s break it down, shall we…
- 75% of consumers are more likely to buy from a retailer that recognizes them by name, recommends options based on past purchases or knows their purchase history.
- 77% of consumers have chosen, recommended or have even gone so far as to pay more for a brand that provides a personalized service or experience.
- 78% of consumers trust a brand more after they’ve received personalized content.
- Another 78% of consumers will only engage offers if they have been personalized to their previous engagements with the brand.
- One in four U.S. adults say their overall customer experience has improved in the past 12 months due to increased use of personal data about them by the companies they typically buy goods and services from.
…and all this personalization results in customer retention rates that are 14% higher among companies who apply big data and analytics to deal velocity.
What to Do with All That Data…
Suffice it to say, email is just the beginning. Albeit a great beginning with personalized emails receiving 29% higher open rates and 41% more unique click-through rates than traditional non-personalized email. Why? Because when an email is personalized, it contains content that the recipient actually cares about.
Case in point, if someone searched for dining tables on your website, and you followed up with an email containing your most popular dining table styles, you’ve got a pretty high probability that that content will be engaged with.
Conversely, if you send a blind email blast announcing that you have a sale on fish tanks, what happens to all your customers who may not own fish? At best you’ll receive no engagement, at worst you’ll have people unsubscribing, marking your emails as spam and tuning out future offers – it’s the fast track to driving up a churn rate. So yes, it’s important and effective to leverage customer data to send more individualized emails, but don’t stop there.
Customer service is made up of more than just email communication. Perhaps most frequently, it means working to find resolutions to problems. If a customer is coming to you for help, they’re likely already frustrated with something that’s not working out (meaning your product or your service). The last thing you want to do is send them on a wild goose chase to fix your mistakes. After all, 76 percent of customers believe that customer service is a representation of how a business values them.
Self-help resources should be highly visible and customer portals should be personalized to reflect recent purchases along with related how-to guides, instruction manuals and policy/warranty information.
Similarly, it’s always a good idea to send these resources before they’re needed. Reaching out after a purchase with a free manual not only adds value to a customer’s brand experience, it creates a personalized touch-point to follow up on a sale, ask how things are going and see if your team can make individualized recommendations for additional products or services.
Why Using Data Results in Better Customer Service
A huge part of excellent customer service simply comes down to preempting questions and being at the ready with solutions when someone comes to you. As we said above, smartly leveraging your customer data is going to massively help with this.
Personalizing communication, reaching out with relevant materials before they’re sought, simply going above and beyond – those are the customer service maneuvers that create an engaged relationship between brand and consumer, and they’re what will ultimately help reduce customer churn.
Are you interested in optimizing your customer retention strategy? Find tips for driving customer engagement (especially within the much-coveted millennial market), reducing churn at critical lifecycle junctures and more in our eBook, “The Insider’s Guide to Customer Retention”, available for download here!