Customers are in a state of constant evolution. They are digitally driven, socially connected and mobile empowered. They are at the center of the universe and have more control over the purchase process and how they choose to interact with organizations/brands. Gartner defines this shift well- “The most disruptive thing in the market is not technology but rather the customer.”
For any business to grow in this customer-centric market, it is imperative to retain existing, most valuable customers through better customer experience and engagement. Recent research shows that improving customer retention rate by 5% can enhance bottom line by 25- 95%. It typically costs any company 5X to acquire new customers as compared to retaining existing ones. This clearly shows the importance of retention in growing revenue and profitability.
However, most companies struggle to handle customer pain points, resulting in poor/unsatisfactory customer experience and engagement, thus losing them. This is more so for companies that are not well-equipped for the digital and social age. 68% customers leave a brand because they feel it is indifferent to them. Gone are the days when a one-size-fits-all approach can keep customers engaged. Templatized reminders through emails, text messages and tele-calling without a deep understanding of customers’ needs is a redundant and ineffective way to retain customers. Despite the time and effort invested, the response rate is low, leading to minimal ROI.
The key to significantly improve retention is by adding intelligence to the process and making it smarter. This can be done by uncovering the customer’s decision-making process through behavioral analytics. Behavioral analytics helps gain a deeper understanding of what matters to customers to granularly identify “how” and “why” they make decisions. This approach uncovers customers’ unmet needs and sets the stage for an organization to address their concerns before they decide to be on their way out. By uncovering what is important to customers (expectations), behavioral analytics helps organizations/brands deliver superior customer experience driving enhanced customer engagement. A typical Customer Experience (CX) revamp exercise should take the following path to facilitate ‘smart’ retention:
- Use behavioral analytics to understand what matters most to your customers & why
- Create actionable micro-segments by marrying ‘what’ & ‘why’ with ‘who’ (demographics)
- Identify your most important customers and uncover their choice patterns
- Develop communication strategies that address these choice patterns
- Identify unmet needs for innovation opportunities that will delight your customers
- Identify cross-sell and up-sell opportunities keeping in mind the above findings
- Implement systems and capabilities that support and deliver insights on CX
A smart retention strategy delivers enhanced customer engagement and profitability and is the starting point for sustainable growth. OSG Dynamo™ our AI based big data analytics platform gets to the root of understanding what behavioral triggers can help customers stay motivated and engaged with an organizations’ products and services. By measuring customer expectations and designing tailored experiences, Illuminate ensures that customers stay engaged, dropping churn and increasing retention.
For a global health insurer, OSG’s behavioral analytics solution delivered a 30% reduction in churn and a 700-bps growth in revenue.
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