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customer retention

Customer Retention
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How to Improve Customer Retention

By: The InMoment Team

There is something to be said about how vital it is to leverage market research to understand your non-buyers so you can convert them into customers. But focusing on how to improve customer retention is just as important, if not more. It is more profitable to invest in existing customers, especially since acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.

The market may be vast, but there is a finite number of potential customers, so making a good lasting impression is key to keeping the customers you have already won, regardless of the industry you’re in. That is why your customer retention efforts are so important.

What Is Customer Retention?

The definition of customer retention is pretty simple: it’s your business’s ability to keep your existing customers coming back to you time after time. But with such a crowded market, that is easier said than done.

Did you know that the average business today loses between 10-30% of its customers annually? Additionally, research by CarlsonMarketing shows that U.S. companies lose 50% of their customers every five years. 

The fact of the matter is that today’s customers have more options than ever before when it comes to purchasing products and services. So, if you aren’t working purposefully to keep those customers, it’s likely they will go somewhere else.

How Is Customer Retention Measured?

We’ve already mentioned a few customer retention statistics, so you might be wondering how those are calculated. Well, let’s do some math here.

Assume the following definitions:

  • CE = The total # of customers when the period ends
  • CN = The total # of new customers that you acquired during the period
  • CS = The total # of customers at the beginning of a period

To calculate retention rate, you need to use the following equation:

  • Retention Rate = ((CE-CN)/CS)) X 100

What Is Considered a Good Customer Retention Rate?

It goes without saying that a retention rate of 100% is virtually impossible. But a “good” retention rate is highly varied by the industry you’re in. Here are some industry-average customer retention rates for you to benchmark against:

IndustryAverage Customer Retention Rate (%)
Media84
Professional Services84
Automotive and Transportation83
Insurance83
IT Services81
Construction and Engineering80
Financial Services78
Telecommunications78
Healthcare77
IT and Software77
Banking75
Consumer Services67
Manufacturing67
Retail63
Hospitality, Restaurants, Travel55

Why Is Customer Retention Important?

Regardless of the industry you’re in, retaining your customers should be one of the top four goals of your overall business (alongside acquiring customers, increasing customer lifetime value via cross-sell and upsell efforts, and reducing operating costs). After all, it is your customers that keep you in business.

If you fail to keep track of your customers, their experiences, and how many of them are staying with you versus leaving for a competitor, you could be bleeding customers (and money) without even realizing it. Need some more convincing? Here are some additional facts for you:

  • 68% of sales come from recurring customers
  • Loyal customers are more likely to share their experience with the company and they are also more likely to purchase from the company again in the future
  • Loyal customers who continue to support your brand will increase your profits
  • iLoyal customers will also recommend your brand and give positive reviews to their family and friends”
  • Returning customers tend to spend more on your brand over time.
  • You get a greater return on your investment (ROI) from repeat customers than trying to acquire a first-time customer
  • Even though only 12% to 15% of customers are loyal to a single retailer, they represent between 55% to 70% of the retailer’s sales. 

How to Improve Customer Retention

The most effective way to improve customer retention? You guessed it! By leveraging your customer experience (CX) program. Your CX program gives you direct insight into how satisfied your customers are with their experience, and then identifies the areas in which you need to improve in order to keep those customers.

There are four cornerstones of customer retention that your CX program helps to support. They are:

Understand Why Customers Leave

  • Exit Interviews: Drive true learnings from the people who understand why customers leave the most (ex customers)
  • Market Pulse Programs: Stay ahead of the competition and learn from our competitor’s customers, other industry customers, and identify other opportunities in the market.
  • Invest in the Right Analytics: Predictive models help to extend lifetime value (LTV) by warning you when specific customers are likely to churn

Eliminate Customer Friction

  • Customer Journey Mapping: Understand moments of impact and potential frustration across your customer journey
  • Employee Forums: Access the employee perspective—and socialize that perspective up the chain of command to create effective change
  • Leverage All Information Sources: Look beyond traditional surveys to include other forms of experience data, such as social data, review site data, operational data, and more!
  • Deploy Microsurveys at Key Touchpoints: Get customer feedback in the moments that matter

Recover Customers Effectively

  • Closed Loop Programs: Address concerns when it matters most
  • Multichannel Listening: Fix broken processes before they become retention detractors
  • Empower Employees: Encourage and train your employees to use their best judgment and make things right without layers upon layers of approval

Drive Deep Relationships

  • Support Teams Consistency: Identify fundamental customer needs and create customized value and benefits
  • Formal Relationship Surveys: Create goal-oriented relationship surveys; look for churn warning signs specific to your business
  • Leverage Loyalty Programs: Leverage your best customers to be your most outspoken advocates

Calculating the Value of Customer Retention Using Customer Lifetime Value (CLV)

At InMoment, we frequently sit down with brand executives and look at real-time metrics that show how much revenue has been recovered due to their closed loop program. Here is the equation we use to prove that value.

Begin with the lifetime value (LTV) of your customer— for example, a prominent pizza chain has publicly stated that their LTV of each customer is $10,000. So, let’s use that for our example. Because your CX efforts are listening to the voice of your customer across all channels, you have the ability to report that last week (hypothetically) you had 300 service lapse incidents across your digital and retail journeys. Multiply that 300 by your customer LTV of $10,000 and you now have $3M of at risk revenue. (Yikes!)

Studies tell us that 50% of those customers will continue to do business with your brand, however, 50% will defect—this is where your closed loop program comes into play. If we resolve the issues with half of that 50% that might defect, we know we have recovered $750,000 of revenue across your brand just in the last week!

From these numbers, it’s clear that, although it can be complex, focusing your efforts on improving customer retention is well worth it! And if you’re using your customer experience program to guide you, you’re sure to create the types of experiences that keep customers around for a lifetime!

To learn more about how to improve customer retention, download this whitepaper that teaches you how to use your customer experience program to improve customer retention and become a revenue generating machine!

Net Promoter Score (NPS) Customer Retention
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5 Ways to Leverage Net Promoter Score to Boost Customer Retention

By: The InMoment Team

You don’t just want to appeal to new customers—you also want to keep your current ones coming back again and again. Not only do returning customers require less introduction to your products and services, but they also tend to spend more than first-time customers, too. 

One user engagement strategy you can use to boost your customer retention is to make use of the Net Promoter Score (NPS) system. Simple to understand, this powerful metric can give you a wealth of information that you can use to improve your brand. 

What Is Net Promoter Score?

NPS is a metric designed to measure customer experience. First, you ask your customers a simple question:

“On a scale of 0-10, how likely is it that you would recommend my brand/product/service to a friend or colleague?”

Then, customers are asked to explain in their own words why they chose the score they did.

From this, you can place your customers on a scale, where anyone who answered between 0-6 is a detractor, 7-8 is passive, and 9-10 are promoters. 

Net Promoter Score (NPS) calculation

In order to get your Net Promoter Score, you take the detractors away from the promoters.

Let’s say you’ve surveyed 100 people. Of these 100 people, 30 are detractors, 40 are promoters, and 30 are passive. That leaves you with:

40 – 30 = 10

Promoters – Detractors = NPS

Determining your NPS is important, of course, but analyzing the open-ended responses to the follow-up question is what will help you understand the “why” behind your score and make NPS feedback actionable.

What Do These Categories Mean?

Promoters

This category (people who selected 9 and 10) are your loyal fans. They’re likely to be repeat customers, often spending more on subsequent purchases. They generally have a positive view of your brand (meaning if they do contact you with a complaints, they’re often more forgiving). 

As well as this, they tend to refer new customers to you – accounting for more than 80% of referrals for many businesses – and talk about you on social media/in person. You may see effusive praise, with descriptions like ‘we’ve been able to achieve our goals’ or ‘this is the only software I’ll use’, along with thoughtful suggestions for improvement.

Passives

This group (people who chose 7 or 8) tends to be satisfied, but not in the same way as promoters. They’re happy with their purchase, and they might buy from you again, though not nearly as reliably. 

They are unlikely to complain about you to colleagues, but won’t necessarily spend their time singing your praises or talking about you on social media either. They’re also likely to evaluate competitors if they see an interesting advertisement or offer, rather than being wholly loyal to your brand.

Detractors

You might think that a 6 is a high score to count as a detractor, but generally, this group are unhappy customers. Encompassing everyone who chose between 0 and 6, they’re likely to talk badly about you. At the higher end, there might be some positives mentioned, but they’re still going to have complaints. This is where a lot of customer churn and defection comes in.

Sometimes these customers may seem profitable, as many of them may be spending a lot of money with you. However, an NPS program isn’t about the initial revenue generated by a customer or account, it’s about customer lifetime value. Detractors are at risk of leaving your business and can even give your brand a bad reputation (and the lower scorers are likely to be difficult for your staff to deal with at times).

Image Source

What Is a Good Net Promoter Score?

Bain & Company, the originators of the score, consider between +30 and +40 to be a favorable score. (Why are we using +30, not just 30? Because it’s possible to have a negative score if you have more detractors than promoters). As you head up to +50, you’re looking at an outstanding result. If you’re at +80? That’s world class.

However, this will vary based on your industry and your location. Europe and Asia generally mark things more conservatively than the US. So, if you’re comparing your scores to your competitors, make sure you’re looking in the same place rather than at a global average. If your industry is one generally viewed negatively – think debt collection, or property management – then you’re generally going to have lower scores, too.

For this reason, it’s worth investigating NPS benchmarks for your industry, and your location, rather than relying on a general global average. It’s also worth focusing on improving your own score per quarter. If you go from 5 to 15, you may still be below the average, but a jump of 10 points is respectable and means you’re doing the right things.

5 Ways to Use NPS to Boost Customer Retention

Now you know what NPS is, it’s time to take a look at how you can use it to improve your customer retention. 

#1: Make Sure It’s Accurate

Firstly, you need to make sure you’re starting off with an accurate assessment. There are a few common mistakes companies make, including:

  • Asking leading questions on the survey
  • Promising rewards for higher scores
  • Using methods that increase bias (like face-to-face rather than anonymous online surveys)
  • Only surveying happy customers
  • Asking too many questions at once

Using “set and forget” NPS microsurveys can help you avoid these pitfalls.  By starting with an accurate assessment, you can take the right steps. Having a false image of customer success can be harmful, as issues will go unrecognized and unresolved. 

#2: Reach Out to Detractors

Responding to the customers who gave you lower marks is beneficial – both for finding out why they gave lower marks, and saving their business. 

Contact detractors right away.  If you can address their issue right away, you have a shot at keeping them as a customer.  

Even if you can’t meet their needs, it is important that their feedback be acknowledged.

If you lack the time to personally reach out to each detractor, you can still mitigate negative feelings by automating your survey response. Send an email right away to thank them for their response, and ask for more feedback.

Reading through detractor feedback, you’ll gain insights into why they wouldn’t recommend you and be able to adjust accordingly. For example, if half of the detractors respond with ‘processing time is far too long’, then you have something to work toward. 

Sometimes negative reviews are based on service factors, like the delivery company you used or customer support that is slow to respond. Sometimes, complaints won’t be directly about your business. For instance, if you provide companies with a virtual phone number, you might get complaints about it not working. Changing this can instantly boost results. Create the experience consumers expect by prioritizing improvements, drawn from their direct feedback.

Feed this data back into your product roadmap and to your sales team. Designing new products with these criticisms in mind can avoid the same issues in the future. Meanwhile, it also gives your sales team some leeway on what they can offer in response to these criticisms to overcome them at the point of sale or renewal. It’s an extra handy thing to add to their sales playbook. 

For instance, if a customer is concerned about delivery times, give your customer success managers permission to upgrade them to expedited shipping at no extra cost. If they’ve had issues with subscription software, offer them a feature upgrade. All of these solutions can turn your detractors into passive customers – and potentially even promoters.

Reaching out to Net Promoter Score detractors to boost customer retention

#3: Learn from Passives 

Don’t ignore this group of customers. While detractors are clearly telling you their business is at risk, passives are more likely to silently churn.  It is your job to find out why and whether you should focus attention on this group. 

Segmenting your NPS feedback by business size or other factors will help you decide how important passive feedback is. If passives reside in important accounts or user groups, you may want to understand the “why” behind their lack of enthusiasm. 

One way to do this is to customize the NPS follow-up question. If a customer scores you a 5 or a 6, ask them “What’s one thing we could do better?”   

#4: Engage Your Promoters

Not all of your effort should focus on your unhappy customers, however. You know that this category of people has positive things to say about you – so why not turn that into something official? 

Reach out to them and ask for reviews or personal testimonials you can use on your website.  You might want to automate asking for a review. That way you ask at the right time — moments after a promoter scores you a 9 or a 10!

If you don’t already have referral marketing in place, it’s time to implement it. Roll it out by targeting these promoters, who you know are likely to make use of it. 

This encourages customer retention by giving them special offers, but it also boosts acquisition at the same time. For B2B companies, this is especially helpful if some of your customers are well-known in their field, as businesses are likely to respect their opinion.

Referral and loyalty schemes aren’t always well suited to B2B brands, but customer marketing or a VIP program can work instead. Customer marketing seeks to deepen relationships by providing customers with multiple benefits. One such example might be providing access to your product roadmap as part of an advisory council. Alternatively, you could create a VIP ‘space’, where exclusive content and in-person events are offered.

#5: Thank Respondents

Reach out to your loyal customers, and thank them for being so. 

Getting an email that says ‘thank you!’ is a great boost and encourages them to remain loyal. Video can improve customer experience, so having a thank you video may be worth the investment – especially if it is personalized or includes some behind the scenes content.

While most of these efforts should target your promoters, some of them can be sent out to your passive base, too – potentially converting those 7 or 8 scores into 9s and 10s. Add value to your initial product through a higher tier service, exclusive access to industry information, or trade-in offers. These methods can tempt passive customers into a deeper relationship with you.

Keep Going 

Net Promoter Score shouldn’t be used as a one-off metric, but a regular measurement. To retain more customers, continue to listen to them, learn from their feedback, and take action. NPS is especially helpful for tracking if your tactics are working. You should see an improvement in retention as you begin to implement those suggestions above. 

Equally, you might see a drop if something changes, like an operating system update or switching to an IVR system to route customer service calls.  By regularly tracking NPS, you’ll spot improvements and problems quickly. You’ll know if something is working or not, and be able to mitigate negative effects as soon as possible.

NPS will help you improve the customer experience you’re providing and that’s the best route to customer loyalty. 

Retain more customers with InMoment, the #1 Net Promoter Score platform for SaaS

Eliminate Friction in the Customer Journey
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How to Eliminate Friction in Your Customer Journey

By: The InMoment Team

What Is Friction in the Customer Journey?

When most folks think of friction, they probably think of middle school science class. But if you’re a customer experience professional, “friction” is probably a term you’ve heard whenever your teammates talk about reducing customer churn. Within that context, friction refers to points in the brand experience that can have a long-term impact on customers’ relationship with a business. Friction may even cause some customers to quit a brand altogether.

Why Is It Important to Reduce Friction in the Customer Journey?

Did you know that the average business today loses between 10-30% of its customers annually?

Additionally, research by Carlson Marketing shows that U.S. companies lose 50% of their customers every five years. Multiply the amount of churning customers by the lifetime value (LTV) of the average customer at your organization and losing customers at this rate means losing millions of dollars!

Because of this, it’s essential that brands have an experience program in place that can detect friction, help experience professionals understand the problem(s) creating that friction, and correct them. The result is both a meaningfully improved experience and saved customer relationships. So, without further ado, let’s go over how your organization can ensure it’s eliminating friction across your customer journey.

How Can You Eliminate Friction in the Customer Journey?

#1: Understand The Moments That Matter

Like we said earlier, an important part of reducing friction is knowing about and understanding the moments that matter to customers. Brands can achieve this understanding by mapping out a few of their most important customer journeys. Learning about key touchpoints is one of the best ways to become aware of problems as they arise.

One of the most impactful methods to identify these moments and then reduce friction across your customer journey is InMoment’s Touchpoint Impact Mapping. Touchpoint Impact Mapping is a innovative way of understanding the moments that matter to customers. It is unique because it is based entirely on comment data drawn from customer feedback, ensuring a more accurate view of the customer’s memory of their experience. This creates an emotional picture of the journey that highlights what is most important to customers and also allows our clients to prioritize those moments that matter most to their customers.

Watch this video to hear how banking giant, Virgin Money, leveraged Touchpoint Impact Mapping to identify a key friction point and then improve its customer onboarding experience!

How Virgin Money Eliminates Friction in It’s Customer Journey

What’s more, once you’ve identified those high-impact moments, you can use this strategy to immediately begin solving those problems and expediently reduce journey friction. Understanding touchpoints and their drawbacks enables organizations to come up with solutions, implement them, and listen to see how they’re working. Experience practitioners can then point to those changes, and their improvements, when proving their program’s worth.

#2: Talk to Employees

Research has even shown that a highly engaged workforce increases profitability by 21%! So, getting your customers’ take on an experience is clearly important, but many brands, in their rush to do so, overlook chatting with their employees about customer journeys as well. Employees, especially frontline ones, can provide extremely powerful and eye-opening intel about your brand’s experience. How can brands access and leverage that?

The best way for brands to get their employees’ perspective is by letting them constantly submit feedback and ideas in real-time. Rather than relying on, say, an annual survey, organizations should instead utilize experience platforms that give employees a constant voice. This also further allows brands to learn about, and act upon, problems as they emerge in real-time instead of too far down the road for the customer’s liking.

Want to learn more about how employees can help you decrease friction in the customer journey and grow customer loyalty and value? Check out this infographic!

#3: Keeping Tabs on Your Customer Journey

That notion of being constantly aware of journey friction as it happens is at the heart of keeping it suppressed as much as possible. Surveys are important, but this dynamic is another reason why they’re insufficient for reducing journey friction by themselves—a constantly possible problem demands a constantly active solution. Organizations simply cannot achieve that level of awareness otherwise.

Another element of getting a full picture of your experience is leveraging data sources outside of surveys. And that’s going to become crucial in the next few years. Why? Because only 19% of U.S. Gen Z customers are likely to complete a traditional survey.

Instead of relying solely on direct surveys, brands can do this by combining survey listening with other sources of data, like your employees’ perspectives, and putting it against a backdrop of financial and operational information. This approach creates a 360-degree view of your customers and experience, an understanding that your organization can leverage to reduce friction, boost retention, and create a meaningfully improved experience.

Want to learn more about improving customer retention? We just published an entire eBook on the subject—click here to check it out!

Customer Churn Prediction
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Reducing Customer Churn: Do You Need Prediction, Interpretation, or Both?

By: Ton Luijten, Customer Success Director, Data Science Lead APAC

Customer behaviour prediction—including customer churn prediction—is at the top of our clients’ agenda—and for good reason. Who doesn’t want to be able to predict the future for their customers, employees, and business? 

What Is Predictive Modelling?

In the world of customer experience, predictive modelling means using data to predict the future needs, wants, and behaviours of your customers and employees. 

My name is Ton Luijten, and I’m a Customer Success Director for InMoment, as well as the Data Science Lead for the APAC region. I’ve come across many interesting case studies that show how predictive models can be really powerful when trying to sell products or services to your consumers. However, when it comes to actually improving the experiences of your customers, it becomes more complex. 

In order to take action and make the right improvements to your CX, it’s vital to understand why something will happen. If you do not have those actionable insights, you will know what or who to target, but you don’t know how best to target them. In this post, I’ll take you through why you need both prediction and interpretation to make the best business decisions.

What’s the Difference Between Prediction and Interpretation?

Let’s take a step back and talk about the difference between prediction and interpretation. In data science, there’s a trade off between prediction accuracy and model interpretability. We have very flexible approaches that tend to come with great prediction accuracy, we’ll call these “black box” models. We also have more restrictive approaches that lend itself to better interpretation, which we’ll call “white box” models. While at first glance it might be appealing to always go for black box models (i.e. the flexible approach with the higher prediction accuracy), you might want to opt for white box models, which leave room for greater interpretation.

To Decide Which Prediction Model, Identify Your Goal

The best model for your business will depend on what you’re trying to achieve. If you’re in a situation where you just want to be able to predict who will buy your products or services, then you don’t really have a need for interpretation, because you just need to target that audience with your ads. However, if you need to have a conversation with a customer that’s very likely to churn, it might be useful to understand why they’re going to leave, so you can have a more relevant conversation.

Bringing Employee and Customer Churn Prediction to Life

The most common use case for predictive models in CX and EX tends to be employee or customer churn, which means customers or employees are intending to leave your brand. Of course businesses are motivated to retain their customers and employees, as it takes time and money to replace both customers and talent. 

When we build predictive models for churn, I typically create at least two—one black box model, where I use a flexible approach that tends to achieve good prediction accuracy and a white box model that provides more insights. When we do this, it becomes very easy for clients to understand why it’s important to have interpretation alongside your prediction accuracy.

Recently we went through this exercise with one of our clients and the black box model provided a great fit, however the only output it provided was relative importance of the variables. In this case it showed tenure as the most important driver. Now this might not be a surprise for most of you, as tenure tends to be quite important when it comes to churn. It’s also not very useful and just throws up more questions; the key question would be at what tenure do my clients start to churn? 

Taking Action Post-Churn Prediction

The most important part of predicting churn is taking action on those insights. Churn prediction won’t give you all the answers to why customers or employees might be leaving, but it will direct you where to focus. You’ll need to identify the best way to avoid the churn—and there are right ways and wrong ways of actioning your churn insights. 

The wrong way of taking action might look like contacting your at-risk customers and explaining why they shouldn’t leave, or perhaps explain how easy it is to use our product or service. It’s also a bad idea to call at-risk customers to confirm they are leaving, then try and talk them out of it. 

These approaches are highly problematic and could cause customers or employees who weren’t actually going to leave to consider doing so. After all, some customers or employees are not looking to leave but are also not very engaged or loyal, so these types of actions could make them rethink the relationship.

The right way to take action on churn insights is to think broader and make a proactive plan. From the “white box” approach, we could actually see that there were high churn groups across the tenure range. At one end there was a group with very low tenure (less than 1 year) who never really used the service and on the other end we have clients who had been with the company for many years and had done many transactions, but they never bothered to use certain services, which made the service harder to use. 

Now this obviously gives us a much better idea of how to take action and reduce churn. For new customers, you might consider introducing incentive programs to start using the service when they sign up, while for customers with a longer tenure, you could intervene and make them aware of the services they could take advantage of to make their lives easier.

So, Do You Need Prediction, Interpretation, or Both?

When it comes to Experience Improvement, we need both prediction and interpretation. We want to be as accurate as possible when we predict churning customers or employees but we also want to understand why they’re leaving—and this is not just a one size fits all. 

Different segments might be leaving for different reasons and have different propensities to leave. Having insights into why customers or employees might be leaving gives you a better idea of what to do about it. Of course, this might lead to a slightly less accurate predictive model, but the trade off is worth it, because what good is an accurate prediction if you cannot take effective action on the back of it?

Want to learn more about how you can reduce employee and customer churn with your experience program efforts? Check out this eBook, “How to Improve Customer Retention & Generate Revenue with Your CX Program”

How to Prove CX ROI
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4 Reads That Will Help You Prove CX ROI

By: The InMoment Team

At the end of the day, investing in customer experience (CX) is about more than just the score. Sure, it’s great to see a boost in CX metrics like NPS, CSAT, and CES, but what really drives impact? Creating tangible value for your business—and that means proving that sometimes elusive CX ROI. 

Historically, CX practitioners have struggled to assign a dollar amount to the value of their programs. And if that sounds familiar to you, that’s okay! Throughout our decades of experience helping the world’s top brands craft memorable, business-powering Experience Improvement (XI) programs, We like to call them the four economic pillars of customer experience (or the four pillars of CX ROI for short).

Curious about the pillars and how they support a foundation of bottom-line value? Look no further! We’ve packed this blog with information on each pillar, examples of programs who have found success in that area, and assets you can leverage to mirror that success in your own program. Let’s dive in!

Four Ways to Prove CX ROI (and Assets That Show You How)

  1. Customer Acquisition
  2. Customer Retention
  3. Cross-sell & Upsell
  4. Cost Reduction

#1: Customer Acquisition

A well-built voice of customer (VoC) program enables organizations to anticipate what new customers are seeking in a brand and thus be ahead of the curve. 

For example, a major athletic company sought to capitalize on acquisitions by optimizing its surveys to find new types of customers. By targeting respondents between the ages of 18 and 35 with specific questions, the company was able to understand this demographic and expand to new cities and demographics.The practitioners who ran this initiative were able to prove CX ROI by tracking the new customer acquisition, increases in unique customers, and market share growth that it generated.

In “Four Customer Experience Tools That Fuel Your Customer Acquisition Strategy,” we highlight four CX solutions you can add to your tool box that will help you bring new customers through your doors. They include Key Driver Analysis, Competitive Benchmarking, Microsurveys, and Multimedia Feedback. You can read the full piece here!

#2: Customer Retention

Organizations should never underestimate the power of service recovery—70 percent of customers who have a situation resolved in their favor will return to a brand, while a 10 percent increase in customer retention can grow a company’s value by 30 percent. Truly customer-centric companies can easily reach and maintain these percentages.

For example, America’s largest cable and home internet provider leverages VoC technology in their regional customer care centers (and are able to prove millions in CX ROI). They discovered that 3% of all respondents requested callbacks, meaning the brand had 1,000 customer recovery opportunities a month (or a whopping 12,000 per year). By combining this insight with customer lifetime value, the company was able to identify $23 million in recoverable revenue—directly resulting from customer retention! 

Our eBook, “How to Improve Customer Retention & Generate Revenue with Your CX Program” is an all inclusive guide to everything you need to know to make your program a customer-keeping machine. Read it here!

#3: Cross-sell and Upsell

Given that it costs 25 times more to acquire a new customer than to retain an existing one, brands stand to gain a lot from finding new cross-selling and upselling opportunities.

Organizations can leverage CX listening tools to identify what about a brand spurs trust and loyalty from its customers and take action to make those offerings even stronger. After all, nearly 50 percent of customers are willing to spend anywhere from 11 to 50 percent more with a brand they feel they can trust.

An example of this is a large cafe group that was able to capture feedback from its existing customer base, analyze their sentiments, and make fundamental menu changes accordingly. As a result, the cafe group saw a noticeable revenue bump that it was able to link directly to their program insights and subsequent menu changes.

Curious how your CX program can help you identify opportunities for cross-sell and upsell? Check out our white paper, “Understand and Predict Your Customers’ Needs with Customer Journey Analytics,” you’ll learn more about understanding your customer journey, identifying what matters most to your customers, predicting customer concerns and behaviors, and how that information helps you to drive business growth. Get your copy here!

#4: Cost Reduction 

Organizations can use CX feedback and employee feedback to both save money within operations and to simplify their provided experience. Are there ineffective processes that are costing more than they’re worth? Eliminating such costs can save companies time, resources, and revenue. (After all, training one employee can cost an average of almost $1,100!)

A top-tier mattress retailer used CX tools to install an exit survey for departing employees, giving them a greater understanding of employee sentiment. After implementing the necessary changes to reduce turnover and new hire training costs, the company was able to establish a clear link between its CX strategy and the ROI it helped to generate.
This infographic, “3 Ways Your CX Program Can Save You Money” lays out three areas where you can cut costs, lower cost to serve, and still deliver the same great experiences. You can access it here!

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How to Design an Effective Customer Recovery Strategy

By: The InMoment Team

Brands work hard to keep their customers happy and to create positive experiences, but the reality is that no organization can prevent every negative experience that might come a customer’s way. Whether it’s due to unforeseen circumstances or plain old human error, negative experiences are always a specter that brands need to watch out for.

Perhaps more importantly, organizations need to be prepared to recover at-risk customers when those experiences, for whatever reason, do occur. At the end of the day, a brand’s obligation to these customers goes beyond the bottom line—it’s part of creating a grander, positive, human experience that will not only salvage the relationship but also keep that customer coming back for more. Let’s dive in.

Before Problems Become Problems

The first step to an effective recovery strategy is to be as vigilant for negative experiences as possible. Proactive multichannel listening is key here—brands need to constantly meet customers where they talk about their brand interactions, then analyze their sentiments to make sure they’re not missing anything. Post-transactions surveys can be helpful here, but brands also need to pay attention to social media, phone calls, and every other medium their customers use to express how they feel about their experiences.

This strategy is effective for more than just one-time problems, too. The right experience platform can digest entire spectra of customer feedback, which helps brands spot recurring issues that they may not have even known about. Thus, companies can use this strategy to both save at-risk customers and fix deep-rooted problems that might be plaguing their wider goals and aspirations.

Closing The Loop

Paying close attention to customer conversations is important, but what happens when problems slip through that crack and put their relationship with your brand at risk? When that occurs, organizations must be prepared to close the loop with customers. In this context, closing the loop refers to assigning an employee to the customer, having that employee intently listen to the customer’s story, and rectifying the problem well enough to salvage that relationship.

While closing the loop seems pretty straightforward at the outset, there’s much more to this process than ‘just’ effective customer service. Closing the loop doesn’t end when a satisfied customer hangs up the phone—meaningfully rectifying that problem means reviewing how it occurred with the wider organization, creating a solution, and implementing it so that future customers don’t suffer the same issue. Looking at it this way means that the organization is actually closing two loops: the one with the customer (inner loop) and creating a more customer experience (CX)-driven culture (outer loop). Both are vital to customer recovery.

Making Things Right

There’s a common element to both of these strategies and to customer recovery in general, and it’s empowering your employees to do the right thing. Challenging employees to step up, involving them in the recovery process, and democratizing data to help them see the big picture are all great ways to ensure that your recovery strategy is working. There’s no better person to salvage an at-risk relationship than an impassioned employee, and no better way to instill passion in your teams than giving them the tools (and encouragement) they need to rise to the occasion.

By challenging employees to be proactive, paying attention to customers’ constant conversations, and by closing the loop when problems do arise, brands can ensure they’re doing everything they can to rescue at-risk customers. This approach allows them to create fundamentally improved experiences that both strengthen the bottom line and turn recovery situations into meaningful human interactions.

Want to learn more about how you can boost your customer retention through recovery methods and more? Read our full eBook on the subject, “How to Improve Customer Retention & Generate Revenue with Your CX Program” today!

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Three Paths to Understanding Why Customers Leave Your Brand

By: The InMoment Team

Retaining customers is one of the best ways to ensure that your brand is building a strong bottom line and an ever-improving experience, but keeping customer churn low is easier said than done. Customer churn is, unfortunately, an unavoidable fact of doing business, but that doesn’t mean that brands have to let it happen in vain. Today, we’re going to give you a quick rundown on understanding why customers leave your brand so that you can prevent future churn, retain loyal clientele, and continuously improve their experience.

Enabling Storytelling

One of the best ways to become aware of friction points within your experience is by letting customers point them out in their own words. We’re not just talking written survey answers, here; experience feedback programs that enable multimedia feedback are among the most powerful tools for learning about problematic or broken touchpoints in your customer journey.

Think about how much more human it is to see and hear customers express their concerns instead of just reading about them. Multimedia feedback empowers brands to understand customer concerns on a much more human level than surveys allow, which is also important for motivating employees. In short, empowering customers to express their concerns in their preferred format and sharing that frank feedback with the relevant teams is one of the best ways to motivate genuine improvement.

Seeking Disclosure

Receiving feedback from current customers is important, but what about past customers? What about the competition’s? The best customer experience platforms are sustained by the best market research, and brands that opt for the former can often receive the latter. Databases, customer panels, and other sources of market learnings are now available at the push of a button, and brands that want to understand their experience from all angles should seek this knowledge out as resources allow.

Once you have all of this feedback and intel from customers both inside and outside your brand, a handy next step is to feed all of that structured data directly into a real-time text analytics engine. This tool is incredibly helpful for brands because it can extract customer sentiment and reinforce organizations’ knowledge of customer churn’s root causes. 

Keeping Churn at Bay

Like we said earlier, brands can’t keep customer churn out of the equation, but they can do a great deal to prevent it with tools and methods like these. Reducing churn in this way is also great not just for churn reduction’s sake, but also for creating a more human experience, instilling greater loyalty in customers, and creating a stronger bottom line.

Want to read more on how you can improve customer retention? Our new eBook walks you through exactly how to build a holistic initiative and the math that will prove the value of your efforts! Check it out here.

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