Acquiring new customers and generating revenue are the overall goals of business, but solely relying on customer acquisition to increase bottom lines can be costly. For one, attracting new customers is 5 to 25 times more expensive than retaining existing ones, where even a 5% increase in customer retention can grow profits by 25-95%.
Customer retention is a more accurate measure of a thriving business, but building a steady following of loyal customers doesn’t happen overnight. Rather, it is a gradual process that requires an in-depth understanding of your audience. Briefly, you need to know your customer to retain their business.
And the most effective way to know your customer is to communicate with them. Not with generic, one-sided email blasts or annoying phone calls but with real, authentic, personalized conversations that build the trust needed to keep customers coming back.
This is truly effective communication.
After looking at how effective customer communications leads to retention, we’ll consider how business texting is now the medium of choice to speak with customers, having cemented its place as a critical tool for your customer retention strategy and revenue goals.
Why customer communication leads to customer retention
Customers are flush with options where to spend their money but, in an uncertain economy, won’t do so without careful consideration. And with 96% of consumers saying customer service is an important factor in winning their loyalty, businesses need to elevate their messaging beyond individual transactions and connect on a deeper level.
However, when it comes to communications, there is often a glaring gap between what the customer wants and what the business actually offers.
Customers now prefer non-intrusive, personalized, and seamless two-way conversations when dealing with all businesses. But how do companies respond? By flooding your inbox with more of the same top-down, one-size-fits-all monologues that presume to tell customers what to do.
This discrepancy arises because companies don’t take the time to listen to their customers or ask them what they want, which to audiences today feels outdated, even hubristic.
On the other hand, effective communication comes from directly listening to and responding to customers’ immediate needs. Showing and proving genuine concern sets you apart from competitors and is a great first step to building a customer service that leads to retention.
Like in any relationship, the best kinds of customer interactions run on open lines of communication that foster engagement and create real meaning, which is why genuine, personalized conversations cut through the noise. 72% of consumers say they only engage with personalized messaging, so tailoring texts to a customer’s specific needs is paramount to meeting their expectations, attracting loyal followers, and building sustainable business.
How to develop a successful messaging campaign
Enter business texting, arguably the most powerful tool to develop effective communication for customer retention. Tech-forward companies taking advantage of business texting’s channel-leading open, read, and response rates deliver higher-performing and more engaging campaigns.
Business texts outperform emails on nearly every metric but, to be most effective, businesses using SMS marketing should keep the following pointers in mind when integrating text messaging into their customer retention strategy.
Strategize your approach
Only 5% of marketers believe they can predict their customer journey. This rather low figure points to our lack of understanding about the people behind purchases and explains the enduring legacy of prioritizing acquisition over retention.
A great starting point to break away from this mindset and get to know your customer is to reverse-engineer the purchase journey. By mapping out all the nodes and touchpoints that lead to a sale, you develop a clearer understanding of the thought processes behind and value of each interaction. This helps you decide which approach is best suited for different kinds of interactions and journeys.
Deploy the right message
To deliver a better experience, you need to communicate the right message at the right time. To forge closer bonds with customers, use a variety of messaging but ensure it always corresponds with where they are in their journey. Some more common types of messages include:
- Welcome messages: valuable for initial onboarding or quick follow-ups on interactions like recent purchases.
- Check-in messages: valuable for letting customers know you’re thinking of them, making sure they’re happy with their purchase or service, and offering to help with any other issues.
- Renewal messages: valuable for reminding customers of your ongoing relationship and seeing if they need help with the renewal process.
Leverage your data
Sitting on a wealth of customer data, including purchasing patterns, transactional data, and personal information, companies have all they need to know their customers. Unfortunately, most fail to properly leverage their data, resulting in a wide care gap.
To understand customers is to know how to retain them, so companies should pay attention to the data at their disposal and maximize it for customer outreach. A great customer retention campaign starts with analyzing customer data and identifying patterns based on what customers expect and prefer.
Know the two types of messaging
Messages fall into two broad categories - proactive and reactive. Both are valuable but achieve different ends, so your messaging campaign should deploy them strategically.
A proactive message initiates communication with the customer, whether checking in on a recent purchase or informing them of upcoming events. Letting customers know you have their interests in mind keeps them brand-aware and brand-positive.
Be it question or comment, a reactive message is initiated by a customer looking for information – and you need to promptly supply it. To ensure a positive experience, your messaging strategy needs support-side resources in place to handle reactive messages on an ongoing basis.
Retention, one text at a time
After a good experience, satisfied customers do more than stay with you – they quickly become brand advocates and bring in new customers. In this sense, customer retention becomes the strongest foothold for customer acquisition, not the other way around.
Every single message you send is a building block to retention, which means you need the right tools to know your customers and nurture these relationships. From both a revenue and marketing standpoint, business texting is the most cost-effective, efficient, and powerful way to deliver an exceptional and preferred customer experience that increases loyalty and retention.
To learn more, book a demo or watch our webinar on how to integrate messaging into your customer retention strategy