The pandemic saw a meteoric rise in subscription services, but with life now returned to near-normal, what tactics are brands using to engage their customers and reduce the dreaded churn rate?
According to The Business Research Company, the global subscription eCommerce market size is expected to increase from $72.92 billion in 2021 to $120.04 billion in 2022, and will climb to reach a whopping $904.2 billion by 2026.
By offering subscription memberships to consumers, many brands have seen an increase in customer purchases, with increased revenue from subscribed customers having a long-term impact. However, how long a customer stays subscribed relies on many different factors, and brands need to work hard to get their churn rate as low as possible.
Unlike lead generation or customer acquisition, retention campaigns can take considerably longer before you see the results. Customer retention deals with loyalty, relationships, and engagement, which can be trickier to measure. This is likely to be one of the reasons why marketers don’t always have customer retention and churn reduction at the top of their minds.
We’re here to change that. To put this topic at the forefront of your marketing-minds, we spoke to Network members Daydot and Notepad to discover different tactics brands can activate to keep their subscription customers engaged and loyal.
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For Osh Rice, Managing Director at Daydot, retention should begin the moment a customer subscribes. “We have seen time and again that the first 30 days are vital when it comes to nudging subscribers to undertake retention-driving habits which deliver long-term engagement.
This could be subscribing to specific newsletters, your podcast, or simply engaging with specific aspects of your product or service.”
Before you start any client engagement, Naeem Alvi-Assinder says that it is important to ensure “your potential customer is a good fit for your services and pricing. This can keep the overall churn rate to a minimum.
A seamless onboarding process is also essential. Little things like ensuring the client has a clear point of contact and a clear step-by-step work-flow, can make a huge difference to their overall customer experience.”
Naaem also recommends that personalisation needs to play a big role in your retention strategy. “There are very few products that have a one-size-fits-all solution to your clients’ problems, so providing tailored problem-solving to your customers is essential.”
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Although customer churn can have a significant impact on your business, more than 2 out of 3 companies have no strategy for preventing customer churn. So, what key pieces advice do our experts have to help customers stay engaged and subscribed?
For Osh, it’s important to understand what actions or habits are being formed by your most valuable customers. “Figure out which of these micro-actions are the simplest to perform and are proven to deliver higher retention stats. You can then experiment with your subscribers using nudges to drive these retention-driving actions. Creating good habits - especially within the first 30 days - can have a massive impact on your bottom line.”
“Giving customers first access to your upcoming talks and events is also a great way to recognise your most loyal customers,” says Naeem. “A client newsletter is also an easy way to keep your customers updated. Having it separate to your prospect mailing list ensures it’s relevant to your subscribers and can include valuable insights to them.”
“Having a knowledge bank available to subscribers means that your clients can find answers quickly,” says Osh.
Naeem goes on to say, “As well as making essential resources free to subscribers, it’s also essential that they’re readily available. Your customers’ time is valuable, and they don’t want to spend it searching through your overcrowded website or confusing client portal. Stick to your value proposition, and make sure your clients have full access to what they're paying for.”
Naeem reminds us that using platforms such as social media can be a great way to keep your customers engaged.
“Keeping engaged on social media seems like a small thing but showing up for your audience can remind them to keep supporting you.”
Lastly, Naeem says that it's important to make the value you're providing clear from the beginning, "but don’t overpromise. If you fail to deliver, then chances are you’re going to say goodbye to that customer. Clients want more value than what they’re being charged for.”
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According to studies conducted by the Gartner Group, 80 percent of a business’s future profits will come from just 20 percent of your existing customers. With such a large percentage weighted on keeping customers loyal, we wanted to know what brands should avoid when implementing their retention strategies.
For Osh, the one of the biggest mistakes he has seen is brands leaning into reducing price versus highlighting value. “We have seen numerous examples where retention journeys rely on heavy discounting, when in fact, simply and clearly demonstrating value can have just as big an impact.”
“The most obvious factor and yet a mistake that some businesses still make,” says Naeem, is “poor customer experience.
Your customer journey should be easy and as pain-free as possible. From responding to that first enquiry all the way through to building that long term business relationship, your brand experience needs to be on point.”
For one final piece of advice, we wanted to know about some of the benefits of using external agency support to assist with your customer retention strategy.
Osh advises that working with an agency can allow you to fast-track your growth. “An agency will have already helped other brands (and competitors) to drive growth, and they will understand the short-term heuristics (best practices) alongside the longer-term frameworks and approaches which will deliver measurable growth.
What's more, having that external viewpoint can often shine a light on internal assumptions. What makes sense to you and your team, may be leaving potential customers confused.”
Lastly, Naeem says that using a marketing agency can be beneficial for businesses that are resource-limited.
“Using a marketing agency to help build your strategy can be beneficial for companies that either don’t have the time or the resources. Having a proper strategy in place will ensure your customers have regular touch-points with your business and feel like their experience with you continues beyond their onboarding.
As well as this, a marketing agency will ensure proper processes are in place and will be able to report on retention and churn rates so that you can make informed marketing decisions before it’s too late.”
If you’re currently re-thinking your customer retention strategy, or would like some further impartial advice on the topic, please get in touch here and one of our team will be happy to help.