Well, the answer isn’t acquiring a gazillion new customers. It is retaining an existing customer.
Much of the marketing world is still engrossed in applying strategies to acquire new customers, but they forget that even a 5% increase in customer retention skyrockets the company revenue by 25–95%. Moreover, according to Marketing Metrics, businesses have a 60–70% chance of selling to an existing customer while only a 5–20% chance of selling to a new prospect.
While there’s a certain excitement that comes with customer retention, it’s important to consider that customer retention programs are not about giving generic discounts, points, and rewards. The vanilla strategy doesn’t work anymore.
Today, the strategies need to be grounded in data. You need access to personalized insights about customer behavior, buying decisions, purchase records and experience. And these strategies work the best when paired with Business Intelligence solution.
In this post, we take a deep dive into the concept of Business Intelligence and how a business can maximize its customer retention using that.
Understanding Business Intelligence Concept
Business Intelligence is the science of analyzing large volumes of data, employee and customer behavior, turning that into information, and providing valuable insights for sound decision-making.
Business Intelligence can predict future buying behavior, provide insights into customer satisfaction and ways to improve it and provide a thorough analysis of KPIs (Key Performance Indicators). Moreover, they help businesses scout for greater opportunities beyond the purveyor of cost-cutting, which can lead to better business prospects and growth. Some crucial things Business Intelligence can do are:
- Analyze buying patterns to understand the current consumption trends
- Get insights into competitor’s marketing strategies
- Analyze customer interaction data to increase the retention rate and improve conversions
- Leverage data to identify selling opportunities and give visibility to products that are sold more
How does Business Intelligence benefit customer retention?
Implementing Business Intelligence driven customer retention strategies reaps rewards that are not just monetary but also intangible, resulting in building your reputation and providing a competitive edge. Top four benefits of customer retention using Business Intelligence are.
- Provides insights into customer experience
Superior customer experience is crucial for any business looking to retain its customers. Because if your products are faulty, customers won’t just leave you but also spread a negative message about your company. Analyzing the data regarding what went wrong with a customer and removing faults from multiple touch points can create a flawless customer experience.
Business Intelligence services give you real-time insights about your customers. It can help you create personalized emails, landing pages, and newsletters. You can also create a tailored customer experience by sending unique offers to each customer.
2. Minimizes Customer Acquisition Costs(CAC)
Determining marketing strategies, lead generation methods, inbound or outbound marketing costs money. And when the customer finally decides to buy from you, you’ve already invested a good deal of your capital–referred to as Customer Acquisition Cost(CAC).
With the cut-throat competition, acquiring new customers is becoming costly. Defining retention strategies and analyzing customer engagement based on SaaS Business Intelligence solutions are the best ways to reduce this loss.
Investing a fraction of your capital in customer retention yields a far better ROI incurring about 5–25x less cost than customer acquisition. Also, through customer retention, you can upsell or cross-sell to your existing clients without any major CAC, setting aside a considerable profit margin due to reduced overheads.
3. Establishes Loyalty
Business Intelligence Services gives you a peek into why the customer attrition rate is jumping high and the funnel stage at which they are leaving. You can leverage this information and tweak your marketing strategies by offering a holistic customer experience.
Your focus should be on cultivating a solid relationship and incentivizing them to increase brand loyalty. However, don’t inundate them with dozens of offers. Instead, narrow down your offerings after analyzing the data and align it with their interests/needs. You will instantly see a rise in your revenue when you listen to your customer’s wants and establish loyalty.
4. Prioritizes qualified and high-quality leads
Through Business Intelligence, you can identify the most profitable customer base through their purchasing preferences, frequency, and value. This helps you prioritize the high-paying leads, so your sales executives don’t need to waste time on the unqualified ones.
Also, customers are less likely to bounce if you’re approaching your target audience. Identify such customers through the business intelligence algorithm and channelize your energy towards retaining them for the long run. So, your lead-generation pipeline is robust, and you no longer compromise your time on low-paying leads.
Strategies to maximize your customer retention using Business Intelligence
Adapting Custom Business Intelligence solutions can quickly focus attention on the opportunities to improve customer retention through the implementation of the right opportunities. These strategies are:
- Making Differentiated and Targeted offers
Satisfied customers will naturally make frequent purchases, spend more time skimming through different offers, and are more likely to be loyal to your brand. Making targeted and differentiated product offers is the best way to keep them coming back to you repeatedly.
Using the customer behavior data provided through Business Intelligence, you can create highly personalized and targeted recommendations that persuade your retainers to buy without any hesitancy.
For instance, by incorporating location-based business intelligence services, a marketer can send location-specific offers depending on the geographical location of their customers, wherein they can have an in-store experience and also purchase the product. Rather than sending generalized promotional offers, by using Business Intelligence, you can also send an email containing a special discount on the products sitting idle in their cart or a complementary product suggestion based on what they liked on Facebook recently.
2. Prediction of customer behavior
Ultimately, the most essential reason to employ Business Intelligence is to know and understand consumer behavior. Using Business Intelligence software & tools, you can check the perception of consumers regarding your products, ascertain future growth prospects, and accurately predict the market size based on that.
Often, you might get overwhelmed seeing their response, but to obtain sustainable growth for your business, pulling out behavioral insights is essential.
3. Identify KPIs
Retention soars when you connect them with your company-specific KPIs and dig out the insights using Business Intelligence.
Some KPIs every company should measure are:
● Sales representative’s productivity levels
● Handle time
● Call abandonment
● Conversion rate
● Resolution rate
● Operational cost
Each of these KPIs deliver Business Intelligence insights. As they assess them, a specific problem will be highlighted that needs to be fixed.
4. Measure customer satisfaction
According to research conducted by Livework, 96% of unsatisfied customers don’t complain, and 91% of those leave and never come back. This signifies the importance of measuring customer satisfaction through Business Intelligence.
To make the system more vigorous, deploy a customer feedback form or an automated message that asks the customers,
“How satisfied are you with the product/service and the whole purchase experience?”
Another way is by asking them if they would recommend the brand to their friends and family. Regardless of the method, store the data and analyze them using Business Intelligence tools to improve your service.
5. Behavior segmentation
Segment your customers into different groups based on their behavior because it is easier to draw insights from a smaller pool than from a large data cluster. This segmentation will help you identify their common pain points and allow you to frame a suitable communication strategy that solves all their problems.
Behavior segmentation allows businesses to divide customers into groups according to their attitude, knowledge, usage, and response to a particular product/service. Behavioral segmentation can be a game-changer in finding customer groups with desired characteristics for making an irresistible offer and increasing sales revenue.
6. Customer profiles
The most crucial step of customer retention is unifying customer data and dividing them into clusters of profiles depending upon their preferences, store visits, etc. This will build a robust customer identity with a specific type of customer profile in hand to analyze customer behavior across multiple channels.
Some information your Business Intelligence tool should track are:
● Customer demographics (age, sex, location, etc.)
● Contact information (email, phone number, address, etc.)
● Frequency of interaction with your sales representatives
● Type of information gathered by the representative
● Activity log (pain points, how often they call, doubts raised by them, etc.)
● At which stage of the funnel, they stand
A robust retention strategy using Business Intelligence can help you identify the churn rate and the methodologies to reduce attrition volatility. If implemented strategically, the brilliant solutions brought by Business Intelligence serve as a single point of reference for customer retention, giving companies more leverage in revamping their customer experience.
Keep an eye on the data produced by Business Intelligence and optimize your marketing strategy to ensure that you get maximum ROI of your time, effort, and money. While you do that, understand that every customer interaction should be differentiated based on their history and future predictions. More importantly, tailor your approach to the right retention audience and their unique customer journey.