1501: [Part 1] How to Improve Customer Retention by Neil Patel on Growing A Business

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[00:00:54] This is Optimal Work Daily. How to Improve Customer Retention.

[00:00:59] Part 1 by Neil Patel of neilpatel.com

[00:01:03] Customer retention is something that you'll want to aim a lot of attention towards if you want your business to succeed in the long term.

[00:01:10] Once you get customer lifetime loyalty, you have hit the jackpot.

[00:01:14] Failure to work on your customer loyalty and improve customer retention plans will mean that your business is on a treadmill, trying to constantly win new customers.

[00:01:25] Losing so many existing clients can become quite expensive.

[00:01:28] After all, it costs five times more to acquire a new customer than it does to keep your existing customer base.

[00:01:34] In this post, we're going to take a look at what you can do to improve brand loyalty and customer retention within your business.

[00:01:41] We'll look at how you can use data from previous customers to improve customer retention in the future, but also what you can ask your existing customer base.

[00:01:50] This way, you will be able to grow your customer relationships, improve customer lifetime, and inspire repeat purchases and brand loyalty.

[00:01:59] By the end of this post, you'll know more than most when it comes to getting customers lifetime loyalty to your brand.

[00:02:05] Let's begin.

[00:02:07] Understand why existing customers are leaving in the first place.

[00:02:11] If you want to improve customer retention, it's a good idea to take a step back and figure out what is affecting your customer retention rate in the first place and why people are leaving.

[00:02:21] If you know the reasons that lead to dips in your customer retention rate, you can take steps to tackle those reasons and to improve your customer's experience of your brand.

[00:02:30] And if fewer people are leaving, you'll not only be improving customer retention rate, but also customer satisfaction and brand loyalty.

[00:02:39] So what can you do to figure out why people are leaving?

[00:02:43] One strategy you can adopt is to obtain customer feedback from those who have decided to no longer be customers.

[00:02:49] As soon as a customer decides to terminate their account, you can send them a personal email to ask them why they decided to end the relationship.

[00:02:57] Asking for customer feedback is a great way to ascertain if there are any customer complaints.

[00:03:02] And if there are, you can work on improving customer satisfaction to encourage repeat purchases and to improve customer retention rates.

[00:03:10] Now, not everyone will reply to your email with customer feedback, but those that do will provide a performance indicator and some valuable insight into what you need to be doing better to improve your retention rate and how to improve your customer loyalty program.

[00:03:24] It's important that you acknowledge everything that is being said.

[00:03:28] You can't be in denial when reading the responses that you're receiving from former customers.

[00:03:33] To improve your customer satisfaction, it all starts with listening to what they have to say.

[00:03:38] Sure, criticism and negative customer feedback can be a hard thing to deal with, especially on social media.

[00:03:44] But if it helps to improve your company, all while improving the customer experience, you should welcome it as a performance indicator.

[00:03:51] You don't have to request customer feedback exclusively by email.

[00:03:55] You can also provide people with a survey, too.

[00:03:58] Using a survey as a performance indicator, the customer that is canceling their account can easily select a reason that explains why they took the action that they did.

[00:04:06] This customer feedback can be used to adapt your customer loyalty program, to improve customer experience for new customers, and to generally improve customer satisfaction and encourage repeat purchases.

[00:04:18] Some companies immediately display a survey after someone cancels their account.

[00:04:23] Because the survey is presented right after the account is canceled, an honest response is more likely because the reason for canceling is fresh in the mind of the customer.

[00:04:32] This also shows that you care about their opinion, which works well in improving potential future customer relationships.

[00:04:39] Surveys also tend to work well as a performance indicator because they don't take too much effort on the customer's part.

[00:04:45] However, this can be a problem, too, because it will be hard to receive in-depth responses that provide you with actionable suggestions you can act upon to improve customer retention and to adapt your customer loyalty program.

[00:04:58] So, if you can, avoid relying exclusively on multiple-choice responses and aim to also provide an option that allows customers to input comments using their own words, too.

[00:05:09] You might even want to send existing loyal customers a survey that helps measure your net promoter score.

[00:05:14] This lets you know how many people would recommend your company to someone else.

[00:05:18] Word-of-mouth recommendations and having loyal customers as honest brand advocates is a great way to get new customers while keeping your retention rate high.

[00:05:27] You can create such a survey using SurveyMonkey.

[00:05:31] It's worth mentioning that you should try and split-test your interactions with canceling customers.

[00:05:36] This is the original email Groove HQ sent to customers who decided to cancel their account.

[00:05:42] Quote,

[00:05:42] Hey, Ted. Thanks so much for giving Groove a try. I'm sorry that you didn't love it.

[00:05:47] I have a quick question that I hope you'll answer to help us make Groove better.

[00:05:51] Why did you cancel? Just reply to this email and let me know. I'd really appreciate it. Thanks, Adam.

[00:05:58] End quote.

[00:05:59] Groove HQ managed to double email response rates to 19% simply by changing their quick question to

[00:06:06] What made you cancel? from Why did you cancel?

[00:06:09] So, as with all aspects of online marketing, make sure that you're willing to test your customer feedback emails

[00:06:15] if you want to achieve optimal response rates. Remember that for every customer complaint,

[00:06:20] there are on average 26 who remain silent regarding the same issue. Any discoveries you do make are likely

[00:06:26] going to apply to a fair few of your customers, meaning you need to act on them if you want to inspire

[00:06:31] customer loyalty, attract new customers, and keep your customers for years to come.

[00:06:37] Improve Customer Experience

[00:06:38] Customer experience also plays a big role in repeat purchase and customer retention rates.

[00:06:45] Some research suggests that 68% of customers leave because of poor treatment and poor customer

[00:06:51] relationships. There are two parts to improving customer experience and customer satisfaction

[00:06:56] overall to encourage repeat purchases and brand loyalty. The first includes taking the customer feedback

[00:07:02] you have received from existing customers through a satisfaction survey or other customer engagement

[00:07:08] and putting it into action. The second includes working on specific parts of your business that will

[00:07:14] impact customer retention and customer expectations, such as a customer loyalty program. I can't provide you

[00:07:21] with a lot of guidance related to the first part because I do not have access to feedback provided by

[00:07:26] your customers. However, I can highlight some of the key parts of your business that you need to be

[00:07:31] focusing on if you want to improve your customer retention strategy and inspire repeat business.

[00:07:36] The first element you need to focus on is the customer onboarding process. It is essential that during

[00:07:43] the customer onboarding process, you clearly provide new customers with the training that they need in

[00:07:48] order to use your product effectively. This will set the tone of your customer relationship and is an important

[00:07:53] part of your client retention strategy. If you can use the onboarding process to achieve some quick wins for the

[00:08:00] new customer, you'll increase the chances of them becoming long-term customers and gaining better brand

[00:08:05] loyalty and customer loyalty. The onboarding process doesn't need to be entirely digital. You can arrange

[00:08:11] a phone call with new customers during which you help them get started and answer any questions that they

[00:08:16] might have. This simple action can have a huge impact on your customer retention rates and can lead to

[00:08:22] those new customers becoming loyal customers. Make it clear that your customer loyalty program is focused

[00:08:28] on ensuring a happy customer experience and customer satisfaction. The second element that you need to

[00:08:34] focus on is customer service and a positive customer experience. This is similar to the onboarding process,

[00:08:40] though it applies to a longer timescale across the customer lifetime. Your customers want to feel respected

[00:08:46] and that you're listening to what they have to say. Customer service opportunities are your chance to make them

[00:08:51] feel that way. One key way that you can improve the customer experience and service within your company is by

[00:08:58] making your support team easily accessible. A great way to achieve this? Hear that in tomorrow's episode.

[00:09:09] You just listened to part one of the post titled, How to Improve Customer Retention by Neil Patel of NeilPatel.com.

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[00:10:48] And again, we'll hear the rest of Neil's post in tomorrow's show, so make sure you're subscribed

[00:10:53] to the podcast and you'll get tomorrow's episode automatically. Now a little bit about Neil.

[00:10:58] He is an online marketing wizard. Even if you don't have an online business necessarily,

[00:11:02] you need a presence online and he can help you get more customers. He's all about generating more

[00:11:07] traffic and more sales and definitely proven as he's been named one of the top 10 marketers by

[00:11:13] Forbes. Entrepreneur Magazine says he created one of the 100 most brilliant companies. He was

[00:11:19] recognized as a top 100 entrepreneur under the age of 30 by President Obama and a top 100

[00:11:25] entrepreneur under the age of 35 by the United Nations. So his content is always valuable and

[00:11:31] we're going to hear more from him, of course, tomorrow. But that's it for today. I again thank

[00:11:35] you for listening and I'll catch you back here tomorrow for the Sunday show where I will wrap up

[00:11:39] today's post and where your optimal life awaits.