8 Creative Ways to Increase Customer Loyalty

by Trevor

Churn happens. But it doesn’t have to happen to you.

You can minimize churn by maximizing customer loyalty.

While everyone’s focused on getting more customers, it’s actually better to keep the ones you have. In a study by Bain & Co., researchers found that increasing customer retention by 5% improved profits by up to 95%. Plus, acquiring new customers is a lot more expensive than retaining them– up to 25 times more expensive, in fact.

So, if you want to increase customer retention and loyalty, but have no idea how to do it, keep reading. I’m going to share eight ways to increase customer loyalty that you may not have considered yet. Let’s get started.

Here are 10 important takeaways to improve your customer retention.

1. Offer Customizable Service

Are you only offering static plans to your customers? Having basic plans are great, but if you’re focused on customer retention, you’ve got to offer customizable service.

According to Accenture, 41% of consumers prefer and are loyal to the brands that allow them to personalize their service.

The “one size fits all” approach doesn’t work well for retention. Your marketing may draw them, but once they figure out that your product isn’t flexible enough to do what they need, they’ll leave.

To minimize churn, think of your ideal customer, and what they may need that you don’t currently provide. Can you offer those features for an additional fee? Can you offer to take away features that they don’t need for a reduction of price?

For example, create an a la carte menu that allows customers to create their own perfect product that suits their needs.

2. Proactive Customer Service

Piggybacking off of that last point, you should invest in a customer support team. Here’s why:

One of the best ways to predict a customer’s loyalty is to actually allow them to design your product.

This same Accenture study shows that 44% of consumers are loyal to businesses that value customer co-creation. In other words, when you invite customers to create the product that they need, you’ll be rewarded with increased customer retention.

Customers like having a customized product that meets their needs.

The only problem is that you can’t just have customers customizing their own products willy nilly. That leads to confusion, frustrating, and ultimately, abandonment in favor of a friendlier option.

So, you need a customer success team that helps the customer:

  • Know your product
  • Personalize your product
  • Use your product

Compared to customer service, a customer success team doesn’t just wait for customers to initiate the conversation. A customer success manager, or team, should proactively reach out to the customer. And it should be a personal and genuine interaction. No form letters, please.

The primary focus of your customer success team is to develop customer loyalty. Whether that’s through upselling the customer the right product or by customizing your product offerings, your customer success team is an invaluable part of your retention strategy.

Learn more about customer success here.

3. Create a Loyalty Program

Everyone likes to feel like they’re part of an exclusive club. Do you have a club for your customers?

If you’d like to create one, but aren’t sure what to build a loyalty program around, here are two ideas:

  • Affiliates and Referrals – Incentivize word of mouth marketing among your customers by offering perks for referrals. This is two for the price of one– you’re appreciating your customers while also activating them to market for you.
  • Important Milestones – Celebrate important anniversaries (such as when your customer signed up) by gifting them with a special discount or freebie.

If you do create a loyalty program, make it worthwhile and exciting. It should feel special to your customers. Customers are less likely to leave a company that actually values their loyalty with goods gifts (such as exclusive discounts and free upgrades).

4. Invest in Ongoing Customer Education

Customers need to know how to use your product. If someone buys into your marketing and decides to try your product, but once they get inside of your app, they have no idea what is going on, they’re going to leave. It’s that simple.

For this reason, companies that put a premium on education also have higher retention rates.

Here are ways that you can continue to educate your customers well past the landing page:

On your website

Your website should be the central hub of information for using your product. Make sure you have the following:

Via email

Email marketing is my favorite way to educate customers because it’s proactive. You’re not reacting to their call for help, you’re actively sending out information that helps them. In addition to having an active customer success team, here are a few emails you should send:

  • Email Course (an automated course that gives beginner or ongoing tips on how to use your product)
  • Guides (in your email, link to a page on your website with a how-to guide that’s targeted to your customer persona– ideally, you’ll have several guides based on each customer persona you have)
  • Quick tips (no need to link to your website, just add all of the information in the body of your email)
  • How-to videos (linked to a landing page on your site, don’t link directly to Vimeo or YouTube)
  • Webinars (linked to a landing page on your site, don’t link directly to Vimeo or YouTube)

5. Be Charitable

One of the best ways to increase customer loyalty is to focus on a social goal that you can share with your customers. Obviously, the first goal is getting them what they need from your service, but you should also consider setting a bigger and more aspirational goal.

Whether you support the building of wells in Africa, a summer camp that teaches kids how to code, or a volunteer organization that plants trees in the Amazon, you need some big idea that galvanizes your brand, your customers, and your employees around a single vision.

I know you’re probably thinking, Does this really increase customer loyalty?

According to this study, 37% of consumers in the US are more loyal to brands that support charities or causes that they care about.

So, don’t be shy. If you’re involved in giving back to a charity, make sure that your customers know it. And that they feel connected to it. An inclusive way to do this is by sending an email to them, sharing you’ve donated X amount of money in their name to a charity.

By the way, simply showing that you care about the environment can boost your profits. A study conducted by Nielsen shows that 66% of consumers will pay more for products and services provided by brands committed to sustainability.

If you’re putting that money towards helping the environment, your prospects will be able to justify the higher cost.

An example of how you can incorporate this: On your homepage, share that your servers are powered by 100% renewable energy. It may seem like a small detail, but it can sway the odds in your favor between you and your competition, especially if your prospect cares about the environment.

6. Keep Them In the Loop

Sometimes, churn happens because credit cards expire or are cancelled. And, if you don’t have a plan in place to notify your customer, they may not even notice. They’ll just come to use your service, and realize they’re cancelled, but not know why. This often initiates a series of unfortunate events that culminates in your customer churning for good.

But you can avoid all that by staying in close contact with your customers. Notify them well in advance before a card is set to expire. And when cancellations happen (and they happen a lot more often than you think), make sure that you’re communicating with your customers and letting them know what’s going on. Your customer may not know there’s an issue with their card, and the worst way to find out is if they come to use your service but are locked out.

Dunning emails are an integral part of customer retention. By improving communication between you and the customer, you’ll also inspire greater loyalty.

7. Upsell Them

You may think that once you get customers, you should not bother them and just be happy that they signed up.

Wrong.

You need to get them even more invested in your product, and the best way to do that is through upselling.

Upselling should always be a part of your retention strategy.

Upselling strengthens your customer’s level of engagement with your business. When upsold, the customer is no longer just dipping their feet into your services, they get totally immersed. And then something magical happens:

They start to think more highly of your company. The more invested they are, the higher your perceived value in their eyes.

Customers are way more loyal to businesses that they’re invested in. If I pay more for a service or product, I’m definitely going to use it more. And I’m also more likely to think that it’s worth the money.

You shouldn’t just have one upsell opportunity (i.e. the base plan and the premium plan). You should have multiple add-ons that customers can tack onto their service plan.

8. Be the Trusted Choice

Accenture found that a whopping 85% of consumers like and are loyal to brands that protect their privacy.

Do your customers feel protected when using your product? Do they know how you protect their information?

Because privacy (and security) are essential to customer retention, you’ve got to let your customers know that it’s a priority for you. Plus, you’ve got to let them know how you do it.

Some SaaS nod to privacy in their microcopy. For example, some companies reassure customers during sign up with a notice like “we will never share your information with others”.

Be sure to link to your privacy policy, and it won’t hurt to include the details of how you keep your customers’ data safe.

Trust badges are another way to quickly convey that your service is committed to security. Add badges like McAfee, Powered by Stripe, Truste, and Norton Secured to your site to increase security.

Additional Resources

Check out these related posts:

Don’t forget to download this list of 10 tips to improve your customer retention.

Kill your churn. Keep more of your customers. Get an invite to Retained.

Comment on this post