Attracting prospects to your brand is only half the battle. Long-term growth means retaining existing customers and building a base of brand evangelists. Passing off customer communication to customer support or account management means missing the opportunity to gather information that helps you keep your customer base. In our latest Found Friday, Ray and I talked about the importance of focusing some marketing efforts on the customers you already have.
Why is churn such a big deal?
“People usually talk about churn in the context of B2B or a SaaS company, but churn actually can also happen in e-commerce,” Ray mentioned. “It just looks a little bit different and it’s usually not called churn. But when you think about retention, the key to any business and growing it over the long term is retention and recurring revenue.”
From a SaaS perspective, eliminating churn means keeping your customers and growing existing accounts. In e-commerce, business success depends on recurring customers. If you have a store and someone buys something once they’re not a very valuable customer. When you lose repeat business, you should consider counting that as churn – because they are looking elsewhere for their needs.
Revenue lost in customer churn is not just the revenue from a single transaction, it’s lost revenue over that person or brand’s lifetime, the cost of customer acquisition, and a buyer lost to a competitor. You’re also potentially losing their colleagues, family, and friends if they left due to a bad experience. Once a customer is lost, it’s five times harder to get them back than it was to acquire them the first time.
What if you don’t know if churn is a problem?
After all the effort of getting customers in the first place, marketing departments have a stake in keeping customers happy. A lot of places call it customer success, which grew from roles in account management, inside sales, and support, but marketers can make a huge contribution with the data they already have.
If you don’t know if churn is a problem, ask someone what the churn rate is. And whether you find out or not, assume that it is an issue and come up with ways you can contribute to customer retention. Customers kept are money in the bank, so any effort made is worthwhile.
Expected churn rates vary from industry to industry, so do a little research and see what seems to be the norm in yours and then set a goal of doing at least 10% better than that number.
How you can help solve the problem with data
Let’s talk a bit about how marketing data can contribute to preventing churn. There are a number of things that the marketing department should know about the acquisition of new customers and how they respond to current messaging and campaigns.
A few core things you should be able to glean from your marketing data include:
- Knowing what problem they had in the first place that lead them to you
- Knowing why they chose you over another option
- Understanding what they’re using you for and how
- Figuring out where they still have questions or want improvements
Knowing what problem led customers to you
One of the easiest things to find out it is what led customers to you in the first place. There are a couple of places to look for this data:
- Look at your marketing / campaign data sorted by keyword / topic
- Look at your competitor’s search data sorted by keyword / topic
- Use cohort analysis to understand how different groups found you and what messaging was used to convert them originally
- Do a market exploration board to understand the problems and concerns of your market
A market exploration board is a way to dig in and see what keywords, topics, and types of conversations are happening in your industry when people are needing a solution. It takes into account everything from search, to forums, to blog posts, to social media – everything that’s a discussion amongst actual users about their issues and how people are talking about solving it.
From the search perspective, keyword/topic grouping is a powerful way to look at your search and content from a big picture perspective.
By grouping your keywords into topics that you think your audience cares about, you can start building a theme around your business and use those groups as a recurring source of ideas. For too many marketers, the focus is still on ranking individual keywords and individual pieces of content.
Why did they choose you?
Use cohort analysis to find out why customers chose you over another option. It could be proximity, price, or any number of reasons that people have for making choices. You need to know why you’re the option. Cohort analysis is simply creating groups of people that have simlar attributes, and cohorts can belong to a number of different groups. A cohort can be a variety of things such as:
- Customers that came in during a certain time frame (e.g. “Q1” or “during the month of March”)
- Customers that came in from a particular campaign
- People grouped by feature / solution usage
- Customers grouped by price point
When you begin to analyze why a customer has choosen your brand over your competitors, you should know these things:
- What features/products are they using most?
- For B2B business, you’ll want to know what features are bringing customers to your product. You’ll also want to know what feature(s) they are using the most frequently once they have become a customer. (Sometimes these differ and that information is very telling about how initial expected use versus eventual practical use.)
- On the e-commerce side, what products in your line are customers purchasing most often? How do those product stack up against various cohort groups and what other things are they buying at the same time?
- What are they talking about on forums, customer support areas, what FAQs get the most views?
- Which feature feature pages or support pages are customers accessing?
- Segment out people who are existing users from people who are prospects.
- What is the landing page that they’re on directly before a sale?
- What was the last thing a customer looked at before they decided to purchase?
- Where do they go most often after the initial purchase?
- Is it a specific feature or part of the product?
- Do they go to a support or resource area for help? (If so, could there be an opportunity for onboarding that would prevent churn later?)
Knowing which page a customer visits before and after the sale will tell you a lot about what’s driving traffic and creating conversions. The last thing they looked at before they decided to purchase is likely a catalyst to purchase. It’s also something to look at with bounce – if you lose a lot of people on specific pages, consider messaging options or a change in call to action options. (For Saas companies, check out a post on pricing strategy.)
If they come back to your content after they’ve made a purchase, where are they going? Are they looking for more information, additional products, to purchase the same product again, or recommend you to someone else? Whatever they’re looking for, it’s important to understand what’s happening. If customers are looking for specific information, this is a great opportunity for marketers to create content that is naturally going to get a lot of traction.
What are they using you for and how?
A lot of times people use our products in ways that we didn’t necessarily imagine they would. Group people by how they use the product and then market to them, and target audiences like them, with resources based on those needs. Look at what kinds of marketing different segments respond to. For example, does a particular cohort respond better to email while another responds to social media?
“Every company that we talk to still struggles with their marketing automation platform. Surprisingly, we know the state of the industry is that the tools are still rudimentary and complex to use,” Ray mentioned, “Marketing automation companies allow marketers to address the issue of customer and prospect behavior to send out customized, personalized campaigns. The tools that are out there are good, but there’s still a long way to go.”
Where do they still have questions or want improvements?
Once you’ve got a customer – pay attention to what that cohort opens, views, and looks at. You should be analyzing what customers search for, view on your site, and talk about on social media differently than you do prospective customers and leads.
Retain customers by showing them that you’re listening. Here are a few things you can do to spread the love:
- Follow up with customers who request features (they’re likely a higher engaged user than average) and make sure they know you hear them and tell them next steps (even if you have to say no to their feature / product request for now)
- Improve old support pages, FAQs, how-to guides and educational materials often
- Check how support assets perform differently for leads versus customers and then create better resources for those items in high demand
- Include recent screenshots, videos, and tutorials that allow users to learn visually
- Share support and educational material via lots of channels for better access, don’t confine it just to a support area on your website
“If you’re going to take the extra trouble to create visual content, you should definataly be sharing it on those mediums where visual content is most effective,” noted Ray. “You’re going to get a lot of long tail referrals and you’re also going to get visits to your website from people who are in different parts of the internet.”
Where can you look for data in your organization?
Want to know what your customers are thinking? Here are a few places you should look for commonalities to see where pain points are and the things people are loving:
- Email opens –
- What subject lines are most popular with customers?
- How do subject lines compare to keyword data?
- How can you leverage what customers like to read in email in other areas of your marketing?
- Search –
- What are customers discussing or searching for now that they’re using your product?
- Take what they’re still looking for or discussing and turn it into content that keeps them engaged.
- Popular site content –
- What content are customers consuming the most and how is it different from non-customers?
- Can you update frequently visited site content based on other data?
- Social media –
- What are current users talking about in your space?
- Are competitors talking to your customers? Are they engaged with, following, or liking competitor content?
- Can you leverage competitor networks to get more customers?
- Customer support –
- What are the most frequent issues for current customers?
- Are the issues something that could be resolved with better content? Maybe content in a visual or video format?
- Are there messages marketing can use to set onboarding expectations?
Your customer support data should be segmented by questions from people who are users and questions from people who are prospects. Are these issues something that could be better explained or resolved with better content from your department like video overviews, better initial messaging, graphics and visuals? Could you actually help close some support issues by just creating better content at the onset?
If you create the best possible content from the start and if you build in retention to all your marketing efforts, then you’re not going to have to spend as much time saving people or begging them to come back.