In a nutshell:
- Winning new customers is expensive, so using the right customer retention software can offer an efficient option.
- Shared values, customer feedback, and excellent customer service contribute to customer loyalty.
- Poor customer experience, lack of value, and inadequate resources can threaten customer loyalty.
- Implementing customer retention software like HubSpot, Drift, Zendesk, Qualtrics, and Phrasee can improve the customer experience.
- Predictive analytics platforms like Pecan AI can help identify and prevent customer churn.
Did you know winning new customers can cost five to twenty times more than securing repeat business from an existing one? Depending on the costs incurred while trying to rein in that customer (also known as the cost of acquisition) and the income they generate, you might just be breaking even with the sale itself. Talk about expensive!
Not only do new customers cost more to obtain, but repeat customers have greater value beyond the initial cost difference. Customer loyalty, once obtained, can run deep. Loyal customers tend to have more significant transactions (upselling opportunities), branch out and try other products (cross-selling), and are more likely to bring in new business with referrals and word-of-mouth marketing — one survey suggests 86% of loyal customers will refer a company they trust to friends.
Customer retention and loyalty are essential to thrive in business, but it’s not as simple as leaning back in your chair and trusting your customers will keep coming back for more. There are proven strategies that will help you provide value to your customers, as well as thorny obstacles that, if left unchecked, will leave your customers wanting, well, not more.
The recipe for customer retention and loyalty
A successful recipe for a repeat customer contains many elements. Shared values (such as supporting a specific charity or being associated with particular ideals like health or wealth), appreciating the customer’s feedback and requesting it often, and excellent customer service are all contributing ingredients to a stellar customer experience — equating to repeat business.
However, as expected, threats to customer loyalty are the exact opposite of what creates a compelling experience, including:
- Poor customer experience
- Customers not seeing the value of a product or service
- Not having internal processes to assess and incorporate customer feedback
- Not enough resources to meet customers’ needs and expectations
While all of these things are important, as a customer service professional, what to do and what not to do can be tough to focus on when your attention is already getting pulled in a million directions. Luckily, technology is here to help you do more, faster and more efficiently. Let’s look at some of the best customer retention software and platforms you can implement to improve the customer experience while saving hours of manual effort.
Tool #1: HubSpot
What it’s used for: Customer relationship management (CRM) and customer service
How it works: With Hubspot’s CRM, you can store all your customer data in one place, track interactions, and view a detailed history of every customer’s interactions with your brand. Hubspot’s customer service offerings also offer great customer support features, including logging tickets.
What it’s great at: Built-in customer support features that help customers log tickets — also great at strengthening relationships with prospects through personalized content.
Areas of limitation: The price point and lack of point solutions make it less ideal for smaller businesses.
Tool #2: Drift
What it’s great at: Providing 24/7 instant chat support with the use of AI.
How it works: Drift's Conversational AI chatbots interact with website visitors in real time, answering queries and guiding them to helpful content. With Drift, customer service professionals can also dialogue with customers, helping resolve issues quickly and effectively.
Areas of limitation: Drift's AI can occasionally misidentify prospects or customers, including company employment status.
Tool #3: Zendesk
What it’s great at: A complete customer experience solution that fosters better customer relationships, Zendesk creates a seamless omnichannel customer support experience and a help desk with improved workflows.
How it works: Zendesk’s top features include a support ticket software that pulls customer support requests from any source into one easily accessible space and a knowledge base software that creates, organizes, and shares support content.
Areas of limitation: Data can be lost or erased randomly, and it can be pricey for small to mid-sized organizations
Tool #4: Qualtrics
What it’s great at: Measuring, tracking, and improving customer data and loyalty.
How it works: Qualtrics helps you collect and act on customer feedback. It also allows you to understand the customer journey (including both relational and transactional). By combining both experience and operational data, it provides key insights that can be used to reduce churn.
Areas of limitation: Limited customization for surveys and not a robust number of prebuilt integrations with business apps.
Tool #5: Phrasee
What it’s great at: Optimized message generation geared specifically toward engaging current customers and reactivating lapsed customers.
How it works: Using generative AI, Phrasee generates on-brand marketing content in real-time that’s optimized for customer engagement. You can set specific goals such as driving purchase completion, improving customer loyalty, or increasing customer retention. You can then use the generated content for email campaigns, push/SMS, social, or web content.
Areas of limitation: Generated content may lack the creativity and personal touch that comes from human-generated content.
Predictive analytics and the secret to customer retention
Incorporating some or all of these tools can improve customer experience and retention. However, having multiple tech solutions without any way to consolidate all your data and analyze it is a headache. Enter predictive analytics.
Predictive analytics platforms like Pecan AI can ingest and integrate data from anywhere — internal databases, spreadsheets, CRMs, and more — and then create predictive insights into your customers (like the likelihood of churn or even upselling and cross-selling opportunities). These predictions can then be integrated directly into your relevant business system (like a CRM, ERP, or BI tool) so that your colleagues’ can make informed decisions throughout their day-to-day activities.
And because predictive AI platforms like Pecan are low-code, anyone can harness the power of data without the need for extensive coding expertise. This has democratized the data analytics process, lowering the barrier to entry for aspiring data professionals, promoting collaboration between technical and non-technical stakeholders, and allowing data analysts to contribute to data-driven decision-making.
Lost customers, reduced engagement, canceled subscriptions — whatever churn looks like for your business, tackling it after customers leave is difficult and costly.
Here are a few ways predictive analytics can help you improve customer retention and reduce churn:
- Predict Churn Before It Happens: Identify which of your customers are most likely to churn. Use predictions to proactively improve retention and drive customer lifetime value. Boost your retention campaigns through rapid experimentation, increased success rates, and enhanced ROI.
- Use Resources Efficiently: Focus retention efforts on customers with the highest churn probability. Use your team’s time, budget, and resources more effectively to target the right customers with the right retention strategies.
- Take Efficient Action Fast: Use predictions to personalize customer outreach designed to prevent churn. Granular insights about each customer guide your selection of the right treatments to maximize effectiveness and save resources.
- Automate Workflows: Take immediate action to address potential churn with automated workflows. Feed predictions directly into your CRM, marketing automation, and other systems of record to activate campaigns and drive ROI.
- Understand Influences on Churn: Uncover the factors that shape customers’ behavior. See why a specific customer may churn on day 30, 45, or 180. Rapidly generate predictions for different definitions of churn and time horizons as business needs change.
- Gain a Competitive Edge: Proactively retaining customers provides a competitive advantage. Maintaining customer satisfaction and enhancing loyalty will improve your market position and strengthen your brand reputation.
While the best technologies and even generative AI can help you work faster, you also need to know who to contact, why they’re experiencing problems, and what to do. Predictive analytics can help you focus your efforts to improve customer relationships and prevent churn.
An example of using customer retention software for success
Hydrant, the wellness drink mix brand, teamed up with Pecan to revamp their customer retention strategy. Faced with the challenge of making their email marketing more precise, Hydrant wanted to create tailored offers based on customer preferences and behaviors. With Pecan's predictive analytics for customer retentiom, they wanted to identify who would make another order and who needed a refreshing nudge to come back.
By seamlessly blending their tech stack – Klaviyo for email magic, Shopify for e-commerce, and Snowflake for data storage – Pecan's customer retention predictions accurately anticipated customer behavior. The predictive models guided Hydrant to target their marketing efforts where it mattered most, saving resources and boosting conversions. Plus, Pecan's winback model turned customers who had gone MIA into loyal customers with targeted offers. Overall, Hydrant saw a 2.6x higher conversion rate and a 3.1x higher average revenue per customer among those identified for retention efforts with Pecan's predictions.
Reduce churn and increase retention with predictive customer retention software
There are some amazing tools out there ripe for the picking. So go ahead, improve your customer retention and loyalty in the easiest and best way possible — by utilizing both the best technology available and predictive analytics platforms to make sense of all your data and guide your efforts. Your customers (and revenue) will thank you.
Ready for a front-row experience of how AI-powered predictive analytics can improve customer relationships? Schedule a demo today.