In an era, where customer experience is everything, companies are investing in the most meaningful aspects of the customer experience. Increasing focus on innovation, big data, automation, and equipping employees with the information and technology they need to best serve consumers, is the only way to stay ahead in this dynamically competitive business environment. An incredible customer experience can help convert new customers into repeat customers and returning customers into more frequent recurring buyers. A recurring customer base is crucial not only for business stability and growth but also for the accurate projection of recurring revenue. Not to mention, it is six to seven times cheaper to keep a current customer than acquire a new one.
So, what are returning customers looking for? According to a PWC report, 80% of US shoppers rank speed, convenience, and knowledgeable support as the most important elements in customer experience. Meanwhile, 42% indicate that they are willing to pay more for greater convenience and user-friendly experience.
We all know it costs a lot to acquire a new customer and a lot less to manage a repeat purchase from an existing customer. However, in this hyper competitive environment, where customer delight is on top of the list for every organization, most customers will make a single purchase and then leave. Turning customers into loyal customers will not only cost much less than acquiring a new customer, but also ensures predictable revenue streams.
This is Retention Automation (RA)!
RA’s objective is to deliver higher ROI by converting one-time buyers into repeat customers, rather than primarily focusing on acquiring new customers.
This blog delves into key steps that are essential for a successful retention automation program and how to convert one-time buyers into repeat buyers for a successful recurring revenue business.
1. Marketing Automation and Personalization
Delivering an exceptional customer experience is the most critical step in acquiring and retaining customers in your sales funnel. Marketing automation technologies empower companies to provide a highly personalized experience to customers across all touchpoints. If leveraged correctly, marketing automation can undeniably increase leads, conversions, and maximize ROI. For a strong marketing automation strategy, marketers must determine where their audience is in the purchase process and what information would impact their decisions. Automated flows and drip campaigns can be created for relevant segments.
A successful campaign entails:
- Collect data on customer behaviors, online activities, and interactions with your brand
- Create unique content for each audience group
- Email automation tools deployed for sending unique content to each group sequentially and automatically
- Track engagement, leads, and conversion to ascertain campaign performance
- Harness data to identify customers that make repeat purchases and engage regularly
- Reminder programs and win-back programs specifically target potential customers after a selected period of time in order to win them back
2. Data Collection and Automation, Simplified
The power of big data and data centralization models have gained much attention in recent years. However, deploying the power of big data can be challenging for companies not having the necessary resources to connect and overcome their different data silos. A good retention automation platform can lift this burden by aiding the marketing department in freeing up resources.
In most cases, there is more data than is needed. Carefully organizing the data to analyze what is critical to the business can be a difficult task. Specific and well-defined information can be fed to retention automation tools for identifying critical data.
Retention automation is an efficient data model designed to include what is essential to the program. It then collects all the related data automatically.
- How does a simplified data model work?
Essential data, such as contact profiles, purchase behavior, products purchased and frequency of purchase are used as baseline information and criteria. With the help of these insights, the customer experience can be improved and directly impact repeat sales metrics. With this data, an RFM metric segmentation i.e., Recency, Frequency, Monetary segmentation can be done. Behavioral data from email, website and mobile app brings in the extra facet of engagement, which gives organization’s insight into the prospects’ present and future consumption and lifestyle patterns.
Tools implemented in the website code or integrated into your web shop database help streamline the data. Integration with a good automation platform can help secure data transfer with the necessary safety protocols for file uploads, which can save time and meet compliance requirements.
3. Scoring and Segmentation
Once a data collection framework is established, a retention automation platform uses built-in knowledge and predictive scoring models to build smart and effective segments. RFM analysis (as discussed above) is one of the common advantages of this model. This extended model helps to engage with customers and introduce an incentive-based automated campaign to win back defecting customers once customer’s current status and spend pattern is ascertained. This allows for more impactful scoring and segmentation amongst microsegments using predictive clustering.
4. Predictive Modeling
Using predictive behavior, companies can evaluate if there is a greater likelihood of a defecting buyer to convert or an inactive buyer to convert. Thereby, focusing resources and campaigns towards the lower hanging fruit, and gradually optimizing the customer engagement strategy. Predictive revenue calculations also help determine the cost of defecting buyers over first-time buyers and lifetime value created by each of them. Finally, effective reporting helps measure the impact on the business strategy and can pave the way for improvement.
5. Engagement Platform Integration
If your customer data is central to all your strategies, your insights will be on target and it’s a sure way to build deep customer relationships. Your customer data must be integrated with your core marketing platform to make automation a seamless process. Integration also means access to multiple marketing channels and using data to find the communication channel that will work most effectively to reduce the rate of defecting customers.
6. Data Integration for a Personalized Customer Experience
Seamless data integration enables an organization to provide any necessary information to a customer, such as real time updates on shipments and payments. The ability to transfer data automatically in any format to any device or system, such as sharing details on an order, shipping notice, tracking details, payment information or remittance advice, can be very powerful. This directly impacts the customer experience and empowers an organization with data and insights to optimize the order and payment process. Thereby, creating service affinity for customers and providing a more personalized customer experience.
7. Finance Automation: Make the payment experience hassle-free
Manual processes have no place in the future of finance. These tedious tasks lead to an uneven workload, redundancy, and take long unnecessary hours. Outdated accounting operations in the form of the traditional error-prone order processes, often manually compiled and adjusted by accountants facing pressing deadlines, can lead to revenue loss. These processes pull down the organization’s productivity, halt scalability, and blur visibility. An automated process that’s repeatable, organized, and transparent can eliminate risk. Further, extending automated functionality to processes, systems, and data beyond the reach of interfaces, helps facilitate the integration of disparate financial systems. Adoption of modern, automated billing and revenue platforms can make the billing process error-free and seamless. Customers are not only billed accurately and on time, but also empowered with self-service abilities to manage their own billing plans, and offered convenient payment options. The process allows faster and richer customer experience, thereby, increasing customer satisfaction and loyalty.
As we know, businesses are leveraging technology in novel ways to raise the bar in their customer engagement. Now with the right recurring billing and monetization platform, enterprises are able to embrace business growth by being able to more accurately forecast consumer needs, purchase patterns and recurring revenue. The ability to bring new services to customers more efficiently is taking these businesses to new heights.
As companies adopt and expand their reliance on recurring revenue, they need a modern monetization platform that supports the entire order to cash process. When finance deploys a flexible monetization platform, they can help to promote experimentation with business models and pricing that allows the organization to operationalize successful practices and change their approach as they learn what works. The recurring revenue business models also offer steady and predictable revenue streams with reduced risk and a high potential for growth. When the new revenue models associated with digital transformation take shape, they bring an exponentially greater level of complexity. RecVue’s unique, unified platform integrates with any ERP, CRM and front-end order processing systems, enabling customers to improve efficiencies across order-to-cash, revenue and general accounting while gaining real-time access to data at multiple levels. The finance functions are able to increase accuracy and timeliness of billing and invoicing and aggregate the billing information in a single system to improve analysis and forecasting.
Reach out to us today for a recurring revenue management assessment. Empower your organization to drive digital transformation initiatives and deliver richer customer experiences.