“A transaction was made and your product was bought.” Wow! What satisfaction when the businesses witness that. But is that all your responsibility? No, not at all! You can’t retain them just with an excellent product but also need to build a healthy relationship that makes the customers loyal to you. Read on further about Customer Loyalty vs Customer Retention!
Remember, you are a SaaS business. You’ve to ensure the customers come to you again and again – so that leaves you with an option to retain the existing customers and that’s customer retention!
Let’s dive to see what distinguishes customer retention from Customer loyalty.
Customer loyalty vs customer retention!
Has your brand acquired repeat businesses so far? If yes, that’s the potential of the brand to attract the customers to make repeat purchases and also indicates that they haven’t tried the competitor’s product yet but may anytime else.
And who is loyal to your brand? The one who decides to not just buy the product repeatedly but also recommend you to others! Loyal customers are up above the transactions as there is a sought of trust inbuilt here and they always show a way up for growth and are reliable!
Retained customers are bought after fighting up the declines and they are more likely to leave at any point in time. So there you have the line between customer retention and customer loyalty.
What are the levels of customer loyalty?
Customer loyalty comes in 4 levels and each stage has to be worked out delicately to progress.
Cognitive loyalty
Here the customers look at the cost to benefit ratio and compare it with other competitors to stay in benefit. That’s why most of the firms are willing to stay at loss to win them over on their first sale.
So this is the weakest first stage that is mostly related to the price of the offering.
Affective loyalty
The customers have a sense of your brand at this stage. They have the satisfaction from their former purchase and now they are here.
To win them over at this stage, the services and the attributes of the brand have to meet their expectations to satisfy them!
Conative loyalty
This is influenced by affective loyalty. And is associated with making a purchase repeatedly. So this thought is developed over a series of purchases.
Now they are at the stage to make repeat purchases, recommend them to others, and even make cross-buying!
It’s worthy to note that they are still not committed to you and can jump to competitors anytime.
Action loyalty
Your brand is identified by the customers at this stage now. Their preferences socially, individually, and financially are associated with your brand.
And are more prone to spread the word of mouth that has a positive impact and can promote your brand to everyone there. Here it is more than buying and has developed a systematic habit to be using your product.
Improve customer loyalty in 3 ways
The idea is to persist longer with the existing customers and if that’s something you care about, customer loyalty should be given attention.
Customer experience
To give a customer experience more than the purchase, there is a need for personalized messages. A 360° view of the customer profile allows you to know their interests and can aid in giving them a personalized experience throughout their journey.
Post-purchase followup
Track the metrics that tell you about the customers. That which will add to give relevant offers to caress the relationship. When you look at the metrics it can give details of interests of the age groups and you can cater solutions to them accordingly. And can have a better picture of the customer lifetime value.
3Rs are the go-to option!
Reviews: On post-purchase, build your connection to know how they liked your product. It can be a rating, review, or a thumbs up to your brand!
Rewards: create a loyalty program, it can either be about giving products at a discount or member-only benefits to indulging them in purchases. Track their engagement behavior to customize your program!
Referrals: Ask them, did the product catch their attention and if it made them use it for their needs, and if they can refer it to others that can help? There is no harm in asking loyal customers.
4 ways to Improve Customer Retention.
Retention starts right from the beginning and until you achieve the repeat purchase order for your subscription from the customers. So, get it the right way!
Retaining comes with smooth onboarding.
How you impress your customers at the first shot that is at onboarding is something that stays long for them to come more often to look for that experience. Imagine you left a negative impression, they are most likely to not use your product again.
Layout the process such that it is a human touch intervention with much personalization. And has less friction!
Close the feedback loop!
To retain is to know how they are like your product or if they are not. As it allows improving and you don’t want to miss it. So an NPS survey can help them rate your product and give a detailed explanation to justify their rating.
Let them know how important it is for them to receive your feedback and that you are noting it to improve the product by conveying it with a Thank you message. Reach out to customers wherever they are engaged with you, it can be an email, or in an app. So rolling out an NPS and closing the loop is crucial.
Stay on top of their mind!
With the increasing competition, how can you expect customers to remember you? Give them something valuable that keeps you on top of their brain. A podcast, downloadable PDFs or a contest, and a newsletter can let them know about you.
Don’t take anyone for granted.
Customer time should be valued. Gauging at how long they have been with you, remind them of how valuable you are and give them bonus surprises to excite them!
The role of a CSM in customer retention!
A Customer Success Manager (CSM) is taking care of the onboarding process to give the best first impression that remains longer. As smooth as it can run, the customers are excited about their purchase of the product.
The next thing is in the product adoption process. Telling them how well you can guide the customer to use your product is as crucial! Understand how well they are adopting the solution you just gave or are they using it correctly? Are they using more features to the solution? All this monitoring can keep them engaged with the product.
Amongst all, they need to hear their concerns and monitor the risks the customers are into and maintain a relationship that they can trust you with their goals.
Lastly, they need to best layout the customer experience, organize it accordingly, and improve the process along the customer’s journey to make them retain, which is the ultimate goal!
So it all starts right from onboarding to giving out the best customer experience for the goal of customer retention. But if it’s about gaining customer loyalty, it prolongs beyond customer experience and transactions.
In the end!
Are you looking into growth opportunities every year, customer loyalty aids you in achieving that. Repeat purchases are yet fine to consider but they are not long-lasting and take double the effort of customer loyalty to retain them every time.
Leverage the time of those customers who have no better options but yours and those who don’t have experience with others. Attract the ones who know competitors, with customer loyalty and distinguish them to choose you over every time with a personalized customer experience that the competitors don’t have.
Getting customer loyalty isn’t easier unless you know them from a 360° angle and so aim bigger with customer intelligence and a 360° view of the customers profile not just for retention but as well for customer loyalty.
