Using data is a great way to drive sales and create loyal customers. It helps you figure out what clients like and gives them a reason to keep coming back to you.
To an e-commerce firm, customer retention can sometimes be the bane of your life. You’ve gone down all the traditional routes to encourage customers to keep on coming back. But annoyingly, you can’t get anything to stick.
Perhaps it’s time to turn to modern methods and look at how data-driven strategies can improve customer retention. Of course, any new customer is great, but retaining regular customers helps save money and build brand loyalty. So, it’s important to do what you can to keep a regular client base.
Using data-driven strategies is an excellent way to do this as it allows firms to use customer information to their advantage. It helps companies deal with struggles that previously meant they would have to play a guessing game to figure out what works to keep customers.
No matter if you sell video conference software or trade in novelty gifts, here are five ways to use data to help retain customers.
1. Use Intelligent Technologies
Marketing teams are now saying goodbye to personalized ad tracking. They are instead turning to things like AI and machine learning to get an idea of what the customer wants.
From banks to farms, machine learning is everywhere nowadays. It works by using algorithms to make predictions. Information is fed into the machines which then gather data together to create statistical outcomes. The more information is fed into the machines, the more accurate the predictions.
So, as a business, using machine learning is a great way to keep hold of customers by having a deeper understanding of their likes and dislikes. This means you can make more of an effort with the customers that are more likely to use your service in the future.
Alternatively, it means you can figure out the reasons why customers aren’t returning and deal with an issue before it happens. Let’s say cart abandonment is a problem for you. Using the insights from machine learning, you may be able to figure out that customers are leaving their sales when it comes to forced account creation. As a solution, you can make a way to bypass this. You can also work on your cart abandonment campaigns to stop further problems in this area.
This is a great way for firms to be more proactive when it comes to dealing with customer acquisition and conversion. And making changes through intelligent technologies such as machine learning shows you are considering customers' wants.
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2. Build Stronger Relationships
One reason you may be struggling with customer retention is simply that you aren’t building strong enough relationships with your customers. Perhaps your brand voice or story isn’t powerful enough. It might be you haven’t quite figured out a customer’s buyer persona. Or maybe your values aren’t shining through as much as you’d hoped. Whatever the reason, without a strong enough relationship, your customers will opt for the competition.
So, use data to learn a little more about your customer and build those relationships. There are plenty of ways of using metrics and KPIs or general analytics to see who your audience is. You can also use these things to find out where their interests lie, how they get to your site, and what people’s favorite products are.
You may discover you have a strong following of women, in which case, you can create more female-led content. Or perhaps you might find that people are particularly drawn towards your organic range of products, in which case you can create more social media posts based on eco-friendly values you may have.
Even just using data to send out a thank you message after a sale will help to retain clients through building on an existing relationship.
Read how the Philadelphia 76ers used data to understand the interactions with their fans on social, and offer their partners new ways of connecting with the target audiences.
3. Use an RFM model
RFM, otherwise known as Recency, Frequency, and Monetary, is a model used in marketing that enables you to turn data into sales. It's a good way to gain a deeper understanding of customer shopping habits.
Using this model focuses primarily on the customers you already have or who have already started shopping with you. The key is to create a better customer experience and build a more loyal client base.
Recency helps you analyze how recently people visited your site and lets you figure out how to entice customers based on this. So, if you have a client that hasn’t visited your site in a while, you can send them an offer, while if you have a customer who visited your site recently, you probably don’t need to tempt them in as you know they’re already interested.
Frequency is more about analyzing the purchases people are making, then sending offers and products based on the regularity of their buying preferences. Say, for example, you’re the marketer for a telecommunications firm. Data tells you customers are constantly buying low-cost products. So, you should frequently send them low-cost offers. But if, for example, the best cloud-based phone system you have comes on sale, you know to also send it to that group of customers.
On the other hand, if you have a customer that makes less frequent big purchases then you will want to make the most of this too. If you have a pricier service, contact them less frequently and catch them at a good time and push that sale on them.
Monetary helps you discover who is a low spender and who is a high spender. These customers can then be categorized into life-time clients and one-off customers. Using this data, you can target them in different ways. With people that spend less, you can devise strategies to help them spend more. And with those that spend more, you can add them to a reward program.
4. Lessen Your Product Offering
Of course, from a comfy pair of shoes to photo editing apps, you want to be able to offer people all the products you can. However, in the modern age, customers are bombarded with products from every angle, which, frankly, becomes off-putting.
This is where you need to optimize the idea of less being more. And using data is an excellent way to do this. Taking a look at specific customer information allows you to offer something they want, rather than something that is being pushed on them.
Using data to offer products in this way will help you retain customers as it makes you stand out from the masses and shows you care. You can take the information from previous purchases, see where customer’s interests lie and create targeted offers based on this.
For example, let’s say you’re a firm that helps start-ups build successful teams. Chances are, CEOs of new firms will be doing a lot of research about their new role, so they will be getting adverts about CMSs, hiring staff, and getting funding everywhere they look.
At some point, they have turned to your firm and expressed interest in managing a team online. This is where you strike with an email about the benefits of workforce management and any products you have relating to this. Using specifics to target people in this way shows you are serious about helping them and have the knowledge to help them too.
5. Get (More) Personal
It doesn’t matter if you sell retail management systems or homeware - one of the best ways to retain customers is to get personal with them. This doesn’t mean being creepy and commenting on their social media page with products. But it does mean trying to get to know them a little better and sell to them using things you have in common.
It also means showing some personality and connecting to people on a human level. Using data to see what their interests are and building on this is almost like saying, “Hey, I’ve been listening to you and paying attention to what you want.” It could be that you express some shared interests, like your love of cats. Or it could be you have the same values, like you both support animal charities.
You need to use those connections to make a sale. Think of it like a person-to-person relationship. As a human, are you more likely to drift towards the people that talk about your interests or those that don’t? So, if a client has been talking about team communication, you know it’s time to mention the communication platform as a service you offer.
It’s about making people feel special and individual. Using data helps you to create strategies around selling in this way.
Ultimately, the best way to retain customers is to treat them as more than just a sale, and using data is a great way to get personal and stand out from the competition. Showing them you can give them what they want, and sticking to your promise, is a good way to keep them coming back to you time and time again.
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