Reduce Churn, Build Loyalty
Acquiring a new customer can cost between 5 and 25 times more than retaining an existing one.
And if that’s not convincing enough for you, research by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) showed increasing customer retention rates by 5% increases profits by 25% to 95%.
Add to that, the success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.
It all makes a pretty compelling case for investing in marketing activity designed to reduce churn or increase loyalty, doesn’t it!
Churn is generally a term used to describe a customer who leaves a subscription based or regular purchase service (for instance – Netflix, or a mobile phone plan or Office 365).
Loyalty is about creating an environment that makes customers want to come back, and also ultimately turns them into advocates, letting others know how amazing you are!
They’re really two sides to the same coin, but if you have a one off, or irregularly purchased product or service, then building loyalty tends to be a better descriptor of what you’ll need to do to get the most out of your past customers.
How Foresight Can Help You Reduce Churn or Build Loyalty
- CMO Consulting
There are a number of strategic formulas relating to churn reduction and loyalty building. Engaging us for guidance around how these mechanics work to help underpin your programs from the beginning will save a bunch of time and money in the future.
- Product and Offer Development
Sometimes marketing can only do so much. When that is the case, making core changes to the product, or coming up with key offers to incentivise behaviour can be the turning point. We can support you with sustainable Product and Offer Development from market research through to specifications.
- CRM and Automation
Your existing database is one of the most powerful assets you have. We can leverage this to create an ongoing connection between you and your customers in genuine, authentic ways.
- Analytics and Insights
Supporting all of this, performance marketing channels like Paid Digital and SEO should be optimised toward low churn or high loyalty leads and sales. We can identify and target more of these by setting up global tagging with Segment and other product analytics suites like MixPanel. We can also use big data to identify customers at high risk of churn and proactively target them.