Has the power ever gone out in your home? Sitting in the dark is no fun, but losing all the food in your refrigerator is even worse.
The satisfaction of crossing a household chore off your list? Gone. Your big dinner party plans? Finished. All the meals you were looking forward to cooking? Out the window. Instead you’re spending more time and money at the grocery store. Even worse, you’re doing it hungry and fearful that your fridge might lose power again.
This is a daily reality for businesses across all industries, except instead of power outages and spoiled food, they’re dealing with low customer satisfaction and voluntary churn. You want to build on your existing customer relationships and maximize the value of the deals you’ve already closed, but if your customer churn rate is high, you’ll be too busy chasing new leads and replacing lost business.
Thankfully customer data platforms (CDP) are here to save the day. Not only can your CDP help you recognize churn risks, you can use it to take action on customer insights and deliver personalized experiences that inspire long-term loyalty.
Here are three ways you can use your CDP for reducing customer churn and building brand loyalty.
1. Identify At-Risk Customers
New customer acquisition is up to 25 times more expensive than retaining your existing customers. And on average, your current customers are 50% more likely to purchase new products from you than new ones. In other words, it pays to know which customers are at risk and convince them to stick around using a retention strategy.
Start by understanding the common characteristics and behaviors among each churned customer. Use lookalike modeling to create a profile of high-risk customers, then operationalize this model within your CDP to spotlight similarities among your existing customer base.
Next, segment your at-risk customers and develop a campaign to repair the customer relationship by reminding them of the value of your products and services and rewarding them for their loyalty. You can use your CDP to automate this process so once customers are added to this segment they automatically receive targeted communications on their preferred channels.
One ActionIQ customer achieved a 10% reduction in churn and a 15% increase in engagement by using lookalike modeling to predict churn and proactively engage at-risk customers.
2. Personalize Customer Experiences
Delivering a tailored, relevant customer experience is about more than driving sales. It shows customers you know them, that you value their business and that they’re more than just a number to you. That’s why 82% of customers feel better about a brand after receiving personalized content.
Your first order of business is understanding who each current customer is. Use your CDP to unify all your customer data into a single, comprehensive view. Machine learning-powered identify resolution will help you transform siloed and incomplete customer records into accurate, actionable profiles you can use to drill down into individual customers at scale. Next, define the customer attributes you can use to create personalized experiences, such as age, location, channel preferences, purchase history and more.
Finally, activate this information by orchestrating omnichannel customer journeys that update in real time based on historical customer profiles and in-the-moment streaming data. The retailer Vera Bradley boosted customer satisfaction scores by 8% and drove a double-digit year-over-year increase in customer count by using ActionIQ to unify its data, identify customer trends and personalize its marketing.
3. Optimize Post-Purchase Engagement
Everything you do leading up to a sale impacts customer loyalty — but it’s what comes after that arguably matters most. Focus on keeping your customers happy and engaged after a purchase to keep them coming back for more.
Use your CDP to orchestrate connected customer journeys that incorporate post-purchase messaging — such as a product recommendation based on a past purchase. Together with other triggered messages tailored to the customer journey — including welcome messages and abandoned cart reminders — this is shown to increase repurchase rates by up to 30%.
You can also use your CDP to flag customers who haven’t made a purchase over a certain time period and automatically target them with campaigns designed to drive new purchases, whether by highlighting relevant products or promoting limited-time sales that increase buying urgency. If you have a previously loyal customer who is close to becoming a lost customer, this approach can help retain their business and increase revenue. This strategy helped one ActionIQ customer reduce churn by 20%.
Remember that while personalized experiences are crucial to increasing customer retention, they’re also expected. Give your customers a reason to stay loyal to your brand, such as by launching a loyalty or rewards program, to combat customer attrition. Not only do 77% of consumers say they’re more likely to stay loyal to brands with loyalty programs, 70% said such programs increase the likelihood of them recommending the brand to others.
Use your CDP’s lookalike modeling functionality to uncover customers who resemble those that are already part of your loyalty or rewards program. You can automate omnichannel campaign messages that encourage them to join and incentivize them to spend more over the long term to gain greater rewards. In fact, 66% of customers agree that the ability to earn rewards changes their spending behavior.
Taking this approach helped one ActionIQ customer drive a 10% increase in spend velocity across all tiers of its loyalty program.
Minimizing your customer churn rate means understanding who your customers are and tailoring your business strategy to suit their wants and needs. That requires a user-friendly CDP that empowers your business users to quickly and easily access customer data and activate it on all the channels where your customer can be found.
Download our 2021 CDP Market Guide to learn more about CDPs and the role technology plays in reducing customer churn and increasing brand loyalty.