We’ve covered the topics of retention rates and retention marketing in the past, but if there’s one thing we know for sure, it’s that loyal customers can help a
business to grow and thrive. According to recent reports, 52% of SaaS providers have increased their customer retention spending. This is completely understandable. As it turns out,
a new customer costs 5x more than holding onto an existing one.
DestinationCRM even declared that, depending on your industry, reducing customer defection or churn by just 5% can result in a 25%-125% increase in profits. This eBook will dive into one of the most powerful ways to guarantee your retention marketing success: by using cold hard data. How can you improve customer retention by using data analytics? More important than that, are you using data analytics to inform strategies and tactics that boost customer loyalty? The way you approach data analytics directly
impacts how you engage with customers. We’ll discuss this and more as you read on.
What Are Customer Analytics?
Customer analytics is a process of analyzing customer behavior in order to make business decisions. It allows businesses to make key decisions, such as cutting costs or boosting
revenue. Understanding your customer journey for a specific industry can help you get more in-depth insight into the customer experience and therefore give you more effective results.
What are customer analytics tools?
Customer analytics tools are programs designed to show an in-depth view of customer behaviors. The most common toll for this is Google Analytics, which segments and categorizes target audiences for marketing purposes. When you use these tools properly, you’ll find patterns in customer behavior that help you determine customer lifetime value, predict future purchases, and more.
Data Analytics & Customer Retention
You need to use data-driven strategies and campaigns to maximize performance. Data/information can be used as a jumping off point to inform specific marketing campaigns
or even new product development. This is what the current landscape of datadriven marketing and customer retention looks
- McKinsey found that “executive teams that make extensive use of customer data analytics
across all business decisions see a 126% profit improvement over companies that don’t.”
- The same study also published, “Intensive users of customer analytics are 23 times more likely to outperform their
competitors in terms of newcustomer acquisition than nonintensive users, and nine times more likely to surpass them in
- Companies that use analytics are two times as likely to enjoy up to 45% higher ROI than competitors who don’t.
- In a joint report from Data & Marketing Association (DMA) and Winterberry Group in April
2018, they found that over half (53.2%) of North American marketers believed enhancing
customer experience would lead to loyalty and retention, second only to increasing engagement.
- Despite knowing the importance of data-driven marketing, a 2017 Forrester
report said, less than 1/3 of senior leaders at a company admitted they use customer
data consistently to help make better business decisions.
Strategies to use data analytics to improve customer retention:
Ready to learn how you can use data to improve your retention rates? Here are five strategies you can implement right now.
Don’t just segment customer data based on demographics such as age or gender (as many marketers do). Segment them by
You can get data about a customer as soon as you have their contact information. Attribution helps track where users came from, which can help determine what might
have caused them to convert into actual customers. One straightforward approach is to categorize your customers into different groups, based on things like what they’ve
purchased, what items they’re interested in, or what country they live in.
Create a rule or tags in your marketing automation with different means to document what happens after someone
interacts with your campaign. For example, if someone clicked a link or took a survey, that information should be placed into a database or spreadsheet. Then, add customers to specific interest
groups or segments that you define.
Once you’ve gathered your data, you can begin to offer personalized recommendations—a whopping 63% of millennials, 58% of Gen Xers, and 46% of
Baby Boomers are willing to share personal information with companies if it means being able to receive personalized offers.
For example, a beauty retailer might send their customers products based on an understanding of their existing preferences and previous purchases. If a customer has been browsing items for a specific skin concern, they will be recommended beauty products to target those concerns. This is a great way to cross-sell and upsell at the same time. If your brand can get information directly from its customer base, do it.
In relation to our previous example, you might be able to ask customers to fill in details about themselves via a quiz or form, including their eye color, their skin
type, and their biggest skin concerns. Pair this up with other touchpoint behaviors across your store, and this will allow you to capture more detailed data, which can be used to create more
personalized experiences for customers.
Practice good website hygiene.
Customer data can be collected and analyzed from the first moment a customer is in contact with your brand. Attribution marketing helps us track where users might have come from or what may have led them to convert into an actual sale. In many respects, website hygiene is just like personal hygiene: It is composed of a series of essential steps and best practices that contribute to the overall health of your website. Now, the question you’ve surely been wondering about: How will this help with retention rates? It is actually extremely important.
Slow page loading speeds, broken links, orphan pages, and code errors can quickly turn off your site visitors and cause them to leave before they scan any other content on the page. These things will also cause Google to give your website a low rank. Regular checks on your site’s overall health can help you keep tabs on your website’s performance and quickly address bottlenecks and issues. There are several things you should do to ensure your website’s performance is top-notch:
- Think about using a Content Delivery Network (CDN). This serves to disperse the traffic to your website across various servers around the
world. In return, customers will get to access your site from local servers near them, which means a reduction in their waiting time.
- Consider changing your website host. If you want to get the best performance for the lowest price, it’s important to be informed
about all your options and to look at user reviews.
- Optimize image sizes. If you use excessively large image files on your site, this can really slow down your site. To remedy this, optimize your images or reduce
their file sizes by using an image optimization tool.
once, and generally reduce the site’s userexperience. You could hire a consultant or developer, but we recommend using tools like Script Minifier or Grunt to optimize your code.
- Minimize web fonts. If you’re using 25 fonts on a webpage, your page speed may suffer. If you’re using 1 or 2, your site will operate much more smoothly and look more cohesive. So, remove any fonts and character styles you don’t actually use.
Locate and reward your repeat customers.
If you’re focused on acquiring new customers, you may be neglecting customer retention. A solid focus on customer retention will ensure your business’ continued success, especially for small businesses. So how do you find new customers while retaining existing customers at the same time? One way to do that is by giving your customers a Net Promoter Score (NPS) survey. In the survey, you can ask customers how likely they are to recommend your business or product to a friend.
If your business uses a subscription-based model, you can also add the Net Promoter Score on your website. Another way to sort through your leads is by using a “lead scoring system.” This will allow you to identify your loyal customers based on their purchases, how they engage with your content, and where they are in your sales funnel. 03 Locate and reward your repeat customers. The data you collect using these two methods can also help you build a loyalty program that’ll reward them for your brand and products’ continuous patronage. Once you’re ready, you can develop a customer loyalty program that will have your most loyal fans keep coming back and even become evangelists for your brand.
Here are some customer loyalty program mechanics that you can use as helpful examples:
- Referral Program: This program provides rewards to customers who successfully refer a sale.
This might be in the form of a unique code, invitations, or special links.
- Tiered Membership Program: A tiered membership is a business model in which customers
receive a sequence of rewards the more they purchase from you. As they move up each tier,
the rewards increase more and more in value.
- Point System: For each product that your customer buys, they earn points. Those points might
be redeemable for rewards or they can be applied towards future purchases.
Use predictive models to map customers.
One of the ways predictive analytics can help you is by telling you in advance how likely it is that your online marketing campaigns will succeed. This helps to predict how certain campaign
messages and promotions that the company is planning to put out will be received by the public.
This type of analytics might help you identify which users are at risk for churn, so you can create engagement campaigns that nurture and get these customers and users interested in your products again. For example, a reengagement campaign might involve sending someone who signed up for your service but hasn’t used it in a while an email to remind them of how they can use your product through promotions like an extended free trial, a “we miss you” discount code, or sending high-value product use cases.
Send follow-ups to existing users to retarget.
We already discussed how you can use data about your customers to deliver personalized offers, but you can also use that same information to follow up with them for non-promotional content.
For example, if an online store recently sold moisturizer to a customer, they could send the customer a personalized guide to make the most of their new purchase. Or they could send blog posts
about different products that pair well with their moisturizer and heighten the benefits.
It’s a good idea to also analyze abandoned carts and create a follow-up campaign for users who abandoned their carts. When you have an understanding of what the main reasons are for people abandoning their carts, you can have better-tailored email and ads to get them back. Abandoned cart emails are one of the most effective ways to get customers to complete a purchase from your website.
If you want to make smart marketing decisions, you need to have access to data
and analytics. Data can help inform you on which products to create and allow you to
increase your customer satisfaction. Use the tips above to improve customer
retention using analytics you might already have access to.