Let’s start with one of the most pressing questions facing businesses today. Why should your company make customer retention a priority?
Of course, both customer acquisition and customer retention help drive business results, but there is mounting evidence suggesting customer retention is where the money is at. Don’t believe it? Here are some stats that may surprise you:
- 61% of SMBs report that more than half of their revenue comes from repeat customers, rather than new business.
- It can cost 5x more to acquire new customers than it does to keep current ones.
- A 5% increase in customer retention can increase a company’s profitability by 75%.
- On average, loyal customers are worth up to 10x as much as their first purchase.
- A 2% increase in retention has the same effect as decreasing costs by 10%.
While the purpose of this article is not to make a case for the importance of customer loyalty, it’s always good to “start with the why,” or to understand why you to fix your loyalty problem.
This post will detail steps businesses can take to use market research to help with customer satisfaction and retention. At the end of this piece, you’ll have a solid understanding of how to start implementing surveys and other market research tools to prevent your business from losing customers.
1. Use surveys to understand target customers
If it’s true that 89% of customers will begin business with a competitor following a poor customer experience, then it’s important to find out from the source (your customers) what constitutes satisfaction.
With the help of smart survey software, you can create stellar customer satisfaction surveys (CSAT), net promoter score (NPS), and other customer-centric surveys. These surveys help you gather relevant data and provide you with an in-depth understanding of who your customers are. Market research helps you identify vital pieces of information including:
- What your customers need and want
- What their preferences are
- Where they shop
- How they shop
- How much they are willing to pay
- Various factors that influence purchasing decisions
- What influences them to remain loyal to a brand,
- Who your brand advocates are,
- And more!
When you arm your organization with this knowledge, you’re well on your way to developing marketing, product, sales, and customer service strategies that fit with customer preferences, winning them over for life.
2. Use market research to create more personalized experiences
Did you know that 41% of U.S. consumers are loyal to brands that offer them the opportunity to personalize products to create something that is bespoke to them? Similarly, 41% of U.S. consumers said they ditched a company because of poor personalization and lack of trust.
Personalization plays such an important role in consumer loyalty that customers are even willing to swap more data in exchange for more personalization.
This is good news for your market research team. When you collect data for market research purposes with the promise of more personalized customer experiences, it’s a win for your organization and your customers.
You gain permission to collect market research data to learn more about what customers want regarding personalized experiences. Then, when you deliver, your customers are happy, remain loyal, and continue to offer up access to valuable data.
If ever there was a time to collect consumer data in exchange for more personalized experiences, it’s now.
3. Use that data to create customer segments
We’ve already talked about the importance of using market research to collect information about how to personalize experiences.
What we haven’t yet addressed is what market research data you should collect and how to use it to inform business strategy.
With the help of a smart market research tool, you can collect important information from your top customers. This includes things like:
- Place of residence
- Behavioral patterns
- Purchasing patterns
- And more!
Once you have collected this type of market research, you can use it to create relevant customer segments. Then, you can use those segments to create more relevant and personalized products, services, and marketing experiences.
For example, Adidas is a brand that has a smart market research strategy that results in more personalized experiences and higher customer retention rates. Adidas uses market research to collect demographic information about customers. Then, they use this data to create customer segments. Finally, they use these customer segments to inform their marketing materials.
Take a quick look at the email below.
Image Source: Campaign Monitor
By using customer data, Adidas can send a different personalized email to male subscribers than to female. This is a more effective and personalized approach than sending a mass email to all subscribers.
While this example is simple, it’s representative of what you can do with market research when you have it. When you transparently collect data on customers, you can use it to make their experience with your brand more relevant than ever before.
4. Utilize and online community to get specific feedback
There are several different market research methods for collecting customer feedback. Surveys and data collection will give you generalized insights to help you inform business decisions. However, what do you use when you need more in-depth feedback from customers?
Of course, you can lead a focus group or conduct interviews, and these are great tools for collecting insights.
Another option growing in popularity is to use an online community. Through the use of a smart market research tool, like Fuel Cycle, you can create an online community where your target customers can engage, play games, give direct feedback, and more.
Communities have particular value in that they provide you with long-term feedback from a group of individuals that represent your brands’ population.
With this market research, just as with surveys or data collection, you can identify things you’re doing well and areas of improvement. Using this feedback helps you create a more solid business strategy and foster customer loyalty.
Customer retention should be the main priority of every organization. However, the only way to retain customers is to stay on top of what they want and need. How do you do this? You do this with the help of smart market research tools to gather data and then using that data to inform your business practices.
For more information about a market research tool that will keep you on track, check out Fuel Cycle today!