The client is king. This timeless principle holds true even in the digital age where customers make purchasing decisions with a click or swipe and have more choices than they’ve ever had.
Businesses looking to succeed in an internet-driven world with shrinking customer loyalty must be in control of securing new customers and hang on to them. Customer retention is more critical than customer acquisition. A Harvard Business Review study suggests that it costs 5 to 25 times less to retain a customer than to acquire new ones.
The success of futuristic brands then rests on offering exceptional experiences that delight customers throughout the customer journey. Data-driven strategies can ensure that the business delivers the most compelling message by addressing its deepest issues at the right time, to the right buyer, through the right platform, while establishing a clear call to action. to close the feedback loop.
Here are some data-driven approaches to rethinking customer journeys and improving customer retention:
Listening to the voice of the customer
Today’s digital savvy customers have explicit brand preferences and expectations. Implementing a Voice of Customer (VoC) program can help brands design a structured way to listen to their customers and engage them in conversation and feedback. Think customer surveys, feedback forms, customer service feedback, and suggestions.
However, just focusing on VoC is not enough. Incorporating feedback throughout the business is necessary and makes the customer feel valued and heard. Agility and adaptability to changing customer preferences is akin to offering them âa seat at the tableâ.
Agility and adaptability
The lockdown situation perpetuated by the pandemic has caused a visible change in customer behavior, and businesses need to be nimble and responsive to changing models.
Today, customers are increasingly using apps for purchases and services to avoid the hassle of travel, queues and the risk of exposure to the widespread virus. In addition, the Internet makes it possible to access more product options and evaluate reviews before making purchasing decisions. This change offers companies the opportunity to strengthen their presence on such platforms, to interact with potential customers and to make the digital experience worthy of their time. To do this, companies will need to “listen”, observe, identify what the customer needs, and then adapt to it by changing internal processes and external communications.
- One example is an insurance company struggling with low retention rates adopting a retention strategy based on artificial intelligence (AI) and machine learning (ML), which generated $ 20 million in revenue from renewal. fast fonts. A systematic approach was applied to observe customer renewal patterns, decision-making processes and obstacles in the customer journey, and an algorithm was used to score each customer. Based on the model results, customers were segmented and the company rolled out a region-specific communication plan to build trust and better engagement, resulting in higher retention.
Map the customer journey
Today’s customer experience determines customer loyalty and retention. From the first impressions of the interactions with the brand (how fluid, convenient, unique and personalized the interaction is), the product experience (whether the product scored high on usefulness and meets expectations of customers), brand perception (if the brand is aligned with customer values) and value for money, the customer experience at every step increases retention.
Businesses can delight the customer by identifying moments of authentic connection within the customer journey and using insights to exceed expectations. Real-time insights combined with deeper, more actionable insights can help businesses improve the customer experience at every touchpoint.
AI and ML help track customer behavior down to the tiniest preferences, allowing brands to deliver the right message at the right time on the right platform. But don’t forget to add the human touch. Brands need to instill empathy and trust in posts to extend emotional quotient beyond stats.
With more and more brands vying for customer attention that is already stretched, personalized customer journeys and communications ensure customers receive what is most relevant to them and have the opportunity to act on it. .
Data-driven engagement strategies
Not all customers are the same, so brands cannot use the same engagement and communication strategy at all levels. AI and data-driven analytics can help segment customers into smaller segments with similar behavior patterns and propensities. Companies can then offer a personalized approach to communication to each group. This strategy will lead to higher response rates from customers since they only receive targeted, personalized and relevant messages.
Taking the example of the insurance company increasing customer loyalty using AI and ML – the company using the analysis separated the customers into four clusters, starting with the retention segments high to weaker retention segments. By deploying AI and ML algorithms, the company received granular insight into customer behavior that helped define four hyper-specific strategies to target these clusters. So when a client was identified as having a strong propensity to renew a program, the company gave little nudges to complete the renewal process.
In contrast, the company sent persuasive messages and frequent nudges to low-retention customers, highlighting how the product solves their specific problems. This has helped convert clients on the fence to renew their policy with the company.
Based on the initial success of adopting a personalized approach, the organization aims to deploy an AI-based pricing approach, âA fair price for a good customerâ. This futuristic strategy breaks with the conventional approach of location-based pricing strategy and will entice customers with good track records.
Customer retention is about building meaningful relationships with customers beyond transactional interactions. Data-driven experiences can improve customer journeys and help companies retain customers while building lasting relationships with them. Leveraging technology to listen intently to customers and nurture them with communications that enrich their brand journeys maximizes lifelong value and turns customers into brand evangelists.
The insurance company, through data mining, also identified customer segments that would respond to native language communication and are more likely to engage / transact in regional dialects.
Another area in which businesses plan to thrive is leveraging data analytics to improve business efficiency by aligning key customer preferences. For example, using data analytics to identify information about customers’ preferred transaction platform, be it a website, app, digital link, or WhatsApp, and establish a brand presence there. Additionally, companies are exploring preferred payment methods and ensuring the availability of various options to minimize customer abandonment in the middle of the transaction and provide a seamless customer experience.
The author is Senior Vice President & Head – Operations & Customer Service, Tata AIG General Insurance