The 4 Keys to Customer Retention

The 4 Keys to Customer Retention Webinar

In one of our recent webinars, our Director of Demand Gen, Gloria Zhu, was joined by Sterling Jackson, Head of Marketing at Aspire, to discuss this in detail. We've compiled all the takeaways for anyone who missed this insightful webinar.
Nainika Sharma
,
Content Marketer
July 27, 2023

Customer relationship management is crucial for success. Not only does it help you establish credibility in the industry, but it also enables you to attract new customers by creating an autonomous branded community. 

In one of our recent webinars, our Director of Demand Gen, Gloria Zhu, was joined by Sterling Jackson, Head of Marketing at Aspire, to discuss this in detail. We've compiled all the takeaways for anyone who missed this insightful webinar. 

Scroll down to get right into it!

Building strong customer relationships

Building strong customer relationships is vital for a company's success in the long term. Each customer-company interaction paves the way for customer retention and ensures the brand stays on top of prospects' minds. 

Sterling says, "If I distill it into four essential aspects, I'd emphasize understanding customers, providing value, fostering community, and seeking their support."

Here are his four keys to customer relationship management:

  • First, understanding customers goes beyond surface-level interactions. It involves genuine empathy for them and learning how they think, feel, and behave about their needs and goals. Every customer is trying to accomplish a specific job or task, and by comprehending their motivations and pain points, we can tailor our products or services to meet their requirements.
  • Second, providing value is critical to nurturing strong customer relationships. This means going above and beyond to deliver products or services that benefit them. It's about solving their problems and enhancing their lives, creating trust and loyalty.
  • Third, fostering a sense of community is powerful in building lasting relationships. Customers appreciate feeling part of something bigger than just a transactional exchange. Engaging them through newsletters, social media, or events keeps them informed and establishes a connection that makes them more likely to remain loyal.
  • Finally, asking for customer support is crucial. Seeking their feedback, opinions, and suggestions shows that their input is valued and provides insights for improving products or services. Additionally, involving customers in decision-making processes fosters a sense of ownership and strengthens the relationship.

Building strong customer relationships relies on understanding, empathy, providing value, community building, and customer engagement. When these aspects are prioritized, businesses can forge meaningful connections that stand the test of time and contribute to sustained success.

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Digging deeper into the four critical elements of customer retention

1. Understand your customers

Understanding your customers is a fundamental aspect of building strong relationships with them. It involves more than just superficial knowledge; it requires a deep understanding of the needs, wants, fears, frustrations, and obstacles they encounter throughout their journey. To achieve this level of comprehension, businesses must actively document and analyze customer feedback at each stage of their interaction with the company. Avoid making assumptions and instead invest time listening and observing customers, mainly when using your product or service.

Incorporating methods like "follow me homes," where you observe customers in their natural settings, can yield invaluable insights that surveys might miss. Providing value is another vital aspect of customer understanding. Every interaction with a customer is an opportunity to create a positive or negative experience, and customers judge these encounters based on three factors: the effectiveness of the experience, the effort they had to exert, and how it made them feel afterward.

Effectiveness is tied to whether the customer efficiently achieves their intended goal or task. Did they get what they needed? On the other hand, minimizing the effort required from the customer is crucial; ease of use and seamless experiences can leave a lasting positive impression. Finally, the emotional aspect also plays a significant role. The customer's feelings after the interaction can influence their perception of the overall experience.

To truly understand customers, businesses must actively listen, observe, and analyze data to gain insights into their behavior, preferences, and pain points. This knowledge allows companies to tailor their products, services, and interactions, ultimately building long-lasting relationships with valued customers.

2. Give them value

Giving value to your customers is crucial to building strong and loyal relationships. By catering to their rational and emotional needs, businesses can create exceptional experiences with lasting impact. Consistently delivering on these value propositions leads to high net promoter scores (NPS), indicating satisfied and enthusiastic customers. Great companies' differentiating value lies in their products and services and the experiences they provide during customer interactions.

Sterling shares an example of offering significant value in Snack Content Hub, which cleverly utilizes AI to repurpose webinar content into diverse assets like YouTube shorts, blogs, ebooks, tweets, and reels. This innovative approach significantly reduces customers' production time and delivers a seamless, effortless, and delightful experience. Such value-add solutions resonate with customers, making them more likely to promote and advocate for the brand.

Understanding what brings value to customers involves constant curiosity about different products and solutions in the market. Giving value to customers goes beyond just the products and services offered; it's about crafting remarkable experiences that meet their needs, save them time, and delight them. 

3. Foster community

Fostering a community around your products, services, or brand is a powerful strategy to create a sense of belonging and engagement among customers. Great companies understand that their differentiating value extends beyond their products and services; it lies in the experiences they curate for their customers during interactions.

Building a community in B2B customer marketing profoundly impacts customer retention and expansion rates. When customers feel connected and part of a tribe, they are more likely to renew their contracts and expand their engagement with the brand. It enables businesses to unite like-minded individuals, fostering shared excitement and support. This not only enhances customer satisfaction, but also contributes to long-term business success.

4. Ask for their support

Asking for support from your customers is a vital aspect of building strong relationships of trust. The post-purchase experience is just as crucial as the pre-purchase phase, and businesses should never forget their customers after the contract is signed. Contrary to what some may assume, a request for support from customers can strengthen the relationship rather than harm it. Striking the right balance between giving and taking, and making appropriate requests at the right time, is crucial.

Human nature inclines us to feel valuable and helpful to our community or tribe, and offering assistance creates a bond and emotional connection. When businesses discover happy customers during a QBR, an event, or through surveys, asking them to be a reference, write a review, or share insights in a webinar can increase their loyalty and reduce the likelihood of churn.

Strategies to solve customer retention challenges

You'll want to cultivate strong relationships and focus on customer outcomes to solve customer retention challenges. Understanding customers is an ongoing process, requiring you to gather feedback and turn it into actionable insights continuously. Customers' needs and expectations are not static, and personas and target segment profiles should be regularly updated to reflect these changes.

To improve retention and expansion rates, businesses should prioritize customer-focused goals and create compelling, easy, and enjoyable experiences. Adopting the "law of marginal gains" allows for minor, incremental improvements that lead to significant results over time. A design-thinking approach to value helps identify problems and research methods contributing to continuous improvement.

Resource constraints can be addressed by being scrappy and focusing on automation, messaging, and campaigns that appeal to a broader yet relevant audience. Customer understanding remains crucial to avoid creating irrelevant messages that may alienate customers. Constantly asking "why" helps challenge assumptions and biases, enabling an iterative approach to finding successful solutions. You can further support customer retention efforts by embracing failure as part of the learning process and scaling up successful strategies. Businesses can strengthen customer relationships and drive long-term success by continuously refining experiences, adopting customer insights, and implementing minor improvements.

Best ways to cultivate customer relationships

Cultivating the best customer relationships can be tricky, and even with best practices, business strategies often fail to deliver in the long run. Here are four best practices shared by Sterling to avoid this situation altogether: 

1. Understand that it's an ongoing process: Sterling suggests to keep innovating when it comes to customer retention strategies. Build a strong foundation by evaluating what works or doesn't for your business. 

2. Be method agnostic: Take time to understand the problem that you're trying to solve and let that guide your research method. 

3. Bring them to your community: Create a strong community around your business to establish your credibility. 

4. Gamify customer advocacy: Don't miss out on rewarding your best customers. Foster healthy competition in the community and ensure their efforts are appreciated. 

KPIs to measure success in customer retention

Tracking key performance indicators (KPIs) is essential while building customer relationships. Some important KPIs to monitor include gross retention, net retention (including expansion), product engagement score, customer effort score (CES), and customer satisfaction (CSAT). Understanding leading indicators is vital as they provide early customer satisfaction and loyalty signals, enabling proactive actions to improve relationships.

You should also be sure to address customer needs and company goals when considering the customer journey. Pre-purchase, customers go through awareness and understanding phases, while companies plan, build, and advertise products to meet those needs and outshine competitors. Post-purchase, the focus shifts to retention, expansion, and advocacy.

Gross and net retention are lagging indicators that show overall customer retention performance. However, more emphasis should be placed on leading indicators like product engagement scores, CES, and CSAT. These metrics, measured at the user, account, or touchpoint level, offer early insights into customer satisfaction and highlight areas for improvement.

Collecting data at specific touchpoints in the customer journey creates closed feedback loops, allowing companies to act on customer feedback effectively. This data-driven approach enables businesses to identify issues, make necessary adjustments, and drive higher retention rates.

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According to Harvard Business, acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one. With the tips and insights in this webinar, you'll learn how to play your cards right before your customers. If you're a company aiming to surpass the competition with a strong bond with your customers, check out the complete webinar here.

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Nainika Sharma

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