The most frequent conversation businesses have when it comes to revenue growth surrounds the tactics and strategies for attracting new customers, optimizing the shopping experience, and expanding reach. These are all effective and important factors to consider when it comes to revenue growth, however, they aren’t the only or necessarily most effective ways to achieve this outcome.
For subscription businesses, customer retention could be seen as just as important as customer acquisition, if not more. Strong retention strategies can improve average order values, drive purchase frequency, and even expand your reach through referrals and word-of-mouth.
Direct Promotions for Repeat Customers
One of the best ways to make existing customers feel valued (and that you care about them, not just closing new sales) is to send out exclusive deals. This is simple to put into practice. Put together a compelling offer, send it via email to existing customers, but make sure not to offer it to the general market.
This is a powerful strategy for two reasons. First, compelling exclusive offers have a higher conversion rate than generalized offers, which will upwardly influence key retention metrics like purchase frequency and repeat customer rate. Secondly, it makes existing customers feel like they’re part of a community, where they’ll receive unique offers that the general public doesn’t. This can help drive brand loyalty and referrals.
Strong Customer Service Goes a Long Way
Poor customer service, undeveloped or clunky onboarding processes, and poor-quality (or nonexistent) customer success initiatives make customers feel undervalued, underappreciated and unneeded.
For subscription businesses, paying attention to these areas will be critical:
- Setting goals and measuring progress toward key metrics like average customer wait time (the amount of time the typical customer waits to speak to a support rep).
- Don’t view customer service as a cost center — think of it as an investment in retention and customer success (and double down on resources).
- Implementing automated response sequences so customers know you’ve received their ticket.
- Putting a call review process in place (where support team leaders review customer calls to identify coaching opportunities) to focus on rep development.
Customer Onboarding and Personalized Communication Makes a Difference
Customer onboarding programs are crucial for subscription brands. Getting a prospective customer to sign up is only half the battle, especially in a monthly subscription model.
Onboarding is the first step in your retention strategy, starting with an informative welcome email. Setting and reiterating expectations is a great way to manage customer sentiment and avoid unhappy buyers.
While onboarding, make sure to prioritize personalization. Personalization is everything in subscription retention. Two-thirds of your buyers expect that their individual needs and desires are understood. More than half (52 percent) expect all offers to be personalized.
But personalization should go beyond simply using a customer’s name in emails. For subscription brands, promotions should be based on product preferences, previous purchases and buying characteristics.
Customer retention might be tricky for e-commerce brands, but luckily we live in 2022, and there are a bunch of really great tools to help with retention and churn deflection.
Move away from generic cancel pages to intelligent cancel experiences that can grasp customer intrigue with personalized design, messaging, offers and surveys. All this while also providing relevant data on how your customers interact with the hosted cancel experiences. Your retention will never be the same.
Consistent Communication and Customer Loyalty
A major component of success in customer communications is consistency. That doesn’t mean, of course, that customers should be bombarded with promotional emails. There are more tactful ways to keep the communication line open with your customers.
Post-membership sign-up SMS messages are always a good move. SMS is a growing channel for customer communications, and can be a much more effective method for reaching your buyer than email. SMS has a 42 percent average read rate (vs. 32 percent for email) and a whopping 98 percent open rate (vs. around 20 percent for email).
Much of this difference comes down to the fact that email marketing is pretty saturated, while SMS is still fairly new, so there’s less noise to break through. In any case, text marketing still presents a valuable opportunity for subscription businesses.
With customers who opt for emails and SMS messages, loyalty programs are an easy way to influence retention. The simplest version of the loyalty program is the coffee card (buy nine, get one free). But subscription brands can get a little more playful with loyalty programs. Points systems are common, where buyers collect points for completing certain actions.
The subscription businesses that are considered winners in 2022 will be the ones that adopted many, if not all, of the strategies that focus on customer retention. The relationship that brands build between themselves and their customers will encourage loyalty while boosting metrics like purchase frequency and Net Promoter Score. Attracting customers is always going to be one of the first and most important conversations for subscription businesses, but customer retention is key for consistent success.
Guy Marion is the GM of Chargebee Retention. Chargebee Retention allows businesses to focus on keeping the customers they already have at a time when both businesses and consumers are being forced to evaluate everything in their portfolios and make difficult decisions.