What does Customer Retention Mean with Today’s CX Expectations?
Let’s say you’ve decided to watch one of your favorite Netflix series on a quiet weekend evening at home. What do you think when you see your show from last night removed from the platform? “I have to cancel my Netflix subscription!” could be a possible answer.
The 21st century introduced us to “individual-oriented” opportunities to make such choices comfortably. If I don’t like Netflix, I’ll try HBO Max. If not satisfied, I can switch to Disney+. Being able to do this so quickly is a great convenience for the consumer, but it is also a big problem for companies. Now, companies have to take more care in formulating their customer retention strategies. Whatever product or services they market, companies should prioritize efforts to improve customer retention rate. When firms serve their customers at the right time and right pace, that positive experience helps to increase customer loyalty and retention. Emotions, intents, or preferences can change so easily. A customer retention strategy based solely on price discounts is not viable; competitors can easily imitate a sales campaign based on the promise of big savings. So, is it possible to boost customer retention with classical strategies? Here is an example of the classical approach. Let’s say you’ve tried to perform an action on a mobile application running for a retail company called Rhettail, but you didn’t get a result. You are unhappy. At the end of the ordeal, you are queried by a pop-up asking, “Are you satisfied with our service?” Then you fill it out as shown below:
After this feedback, imagine that the Rhettail customer service agent called you and asked, “Can you tell me about your problem?” You had a bad experience, scored the service as one star, and wrote a paragraph-long complaint. As a follow-up, all the employee does is call you to repeat an evaluation process by asking the same questions, which is a rather clumsy form of feedback evaluation. Whatever you think of this experience, your customers will feel worse. This whole process definitely won’t deliver improved customer retention. Your customer is most likely in a negative mood because of the bad experience. He/She will feel that this phone call is impersonal, just a routine process for every customer as part of standard customer retention tactics. As these behaviors contradict the concept of “individual-oriented” customer retention that we mentioned at the beginning of the article, your customer will probably leave you. So, what do we do? How will you retain those unsatisfied customers and unlock a competitive edge for your company? Do you need a customer retention analysis?
Adopting AI-Based CX Management Approach to Improve your Customer Retention Rate
There are three unique ways to retain your customers and navigate your customer retention strategy by leveraging a CX automation system:
1- Decoding customer experience signals: Getting closer to clients means investing time in understanding their concerns, their experience, and the context surrounding their use of your product or service.
2- Real-time engagement: It is a great way to improve customer retention, keep consumers engaged with your brand, and remind them that you are “there” to be of service exactly when it counts. Relationship quality is the bedrock of customer retention. The integrity of your follow-up demonstrates respect.
3- Predicting future events: Now it is possible to bring fresh perspectives to your business by predicting future events based on history. You can predict customer behavior and implement preemptive problem-solving strategies.
Embedding these capabilities by utilizing AI-driven CX management systems will enable you to pick the right strategies for higher customer retention rate. Let’s delve into how those capabilities reflect on real life.
Now let’s imagine that your customer’s feedback appears on the screen in real time in front of you as follows:
It looks better, doesn’t it? Would a smart assistant that reads and analyzes thousands of customer feedback that comes your way every day, then presents you with logical insights gleaned from those communications, be useful to you? Alterna CX’s AI-enhanced CX management system gives you that. Using the most advanced Machine Learning methods, our technology analyzes pain points, sentiments, intents, and emotions as part of a powerful AI-Human collaboration. We have designed this software specifically to provide more accurate customer retention management. For Alterna CX’s AI power, the commercial product or service specialty is not a limiting criterion. Insurance, Retail, Banking, Automotive… Whatever your field of business, our advanced NLP solutions are primed to help shape customer retention strategy.
Reading and analyzing customer feedback allows you to plan actions in advance, formalize your customer retention strategy, and interact in real time. Workflow automation and alert management solution can notify you when someone makes a negative or low-rated comment. Instead of reading a whole text of feedback, all you have to do is browse through our analytics and provide the commentator with a personalized solution.
Our experience analytics solution doesn’t just provide historical or recent insights. Our AI-enhanced simulation screens offer a predictive analysis that shows how the NPS result changes over time for each topic discussed by customers, what areas you need to improve in order to sustain loyalty, and how much your NPS will be affected if you make progress on that topic. Thanks to these analyses, you can examine the history of your CX performance, intervene in the present, and plan the future of your customer retention plan.
What is customer retention?
By definition, customer retention is focused on the capability of an enterprise to convince its customers to remain loyal to it and to prevent them from switching to a competitor. It is a valuable indicator of whether your clients are pleased with your products and services. It is also a vital concept for companies and service providers that offer subscriptions. Customer retention strategies are processes and actions that companies put in place to sustain loyalty and improve lifetime value. Customer retention should not be confused with customer acquisition or lead generation. Retention only concerns customers who have already subscribed to one of your services or acquired one of your products.
However, customer retention goes beyond just contacts. It’s more about relations. As studies have shown, customers treat brands like they would treat friends. They expect brands to be trustworthy, authentic, and responsive to their needs. So, to retain your existing customers, you need to reinforce the affiliation they have with your brand. This is what will keep them choosing you, even when they have other options.
Why is it important to retain your customers?
The Harvard Business School Review published a piece that concluded it’s generally less expensive to retain loyal consumers than to acquire new clientele. According to that research, it costs up to 25 times more to attain a new client. Essentially, there is no need to invest more money in publicity, promotions, or sales. It is considerably easier to preserve your current, standing customers because they already trust you. New customers, on the other hand, require much more effort. You have to convince them. When your customers are devoted to you, they will not just purchase your goods again, but also tend to recommend your services to their colleagues, family, and friends. Customers who trust you again and spread the word are an indicator of loyalty and a guarantee of long-term success.
How does customer experience impact customer retention?
It’s simple cause and effect: Creating frictionless experiences allows you to build more meaningful relationships with your customers. Those relationships inspire loyal customers and their intent to repeat purchases is higher. To learn more about the impact of CX on high customer retention rates, please visit Voice of the Customer