The great customer journey – episode 1
Ok, so you’ve done a lot of things right and your customer database is practically flourishing. Your products are flying off the electronic shelves and you’re celebrating your exceptional sales performance.
Indeed, there is a but. And that but has to do with the risks raised by the same elements you are currently celebrating: your products and your customers.
If you’ve already raised an eyebrow, perhaps the following facts will make you reassess the context:
Fact: Nowadays the shopping experience begins with an online research (naturally, we’re in 2015) and 72%* of shoppers make at least 2-3 inquiries on Google as they research for the product or service they’re interested in.
Why is this important? Because this is a strong reminder that your current customer has already seen some of the offers available from your competition and he/she is well enough informed to be able to make an overnight switch from one provider to another (especially if they’ve only signed up for a trial).
What should you consider? Take some time to plan a strategy which will allow you to make sure that your customer becomes a “team member” instead of running off with the first tempting discount from your competition. And here’s a hint: a customer who has come to perceive you & your product as indispensable is a customer who is no longer interested in what the competition may have to offer. This type of relationship is built upon a high level of service and an almost personal feeling of comfort associated with you.
Fact: According to recent studies**, consumers have begun to expect personalized offers and services—as opposed to a standard discount or bundle—in return for their interactions with a seller, regardless if they are already buying customers or just window shoppers.
Why is this important? Because one of your long term business growth “keys” is building a solid pool of loyal customers, by providing them with the Graal of all ecommerce players: an exceptional customer experience. To succeed in doing this you have to meet their current expectations. By ignoring the shifts in your consumers’ behavior you are exposed to a serious risk of seeing your customer portfolio become not only unstable, but also possibly diminishing.
And while being a sales wonder is great, being a one-hit-wonder may not be the best strategy for your business.
What should you consider? Segmentation, communication and personalization. Filter your base of clients & leads and try to outline the major categories of users your business is reaching. Understand their profiles and adapt your marketing strategies or even your future products to their expectations.
Communicate with both your customers and leads – send followup emails (to ask for their feedback regarding the purchased product/ service or simply to understand what keeps them from buying it), interact via social media, run surveys and incentivize them to interact with you. Finally, use their feedback and behavioral data (acquired directly from your customers or via monitoring tools) to try out various offers and learn which formula works best for your target market and your current product – whether it’s a price adjustment, a subscription model update, bundles, a freemium model or something completely innovative.
Fact: A Harvard Business Review report highlighted the fact that “the average business loses 50 percent of its customers every five years”. Depending on the industry (and software/ digital is one of the most dynamic), this rate may be even higher, over a shorter period of time.
Why is this important? For at least 2 good reasons: 1) acquiring new customers can cost as much as 5 times more than satisfying and retaining current customers and 2) it has been proven over and over again that retaining customers also increases the profitability of those customers. In other words, customer retention is not only important for the stability of your business, it is also a big factor influencing your profitability. And we didn’t even mention the importance of a happy customer in attracting new ones.
What should you consider? The golden rule of 80/20 is as valid today as it ever was – 80% of sales/ revenues come from 20% of your customers. Seeing your sales figures move up and your base of new customers rising like a well baked cake are of course extraordinary reasons to celebrate (and you really should!). They are, however, just the starting point for what can become your business developing core, your foundation for future expansion and long term success.
These are just 3 insights underlining the idea that customer development is a key strategy for any ecommerce business of the moment. And since customer development is such a complex aspect, we’re going to dedicate a series of posts to practical approaches on how to win this long term “bet”.
What are your thoughts on customer development and the current market trends?
* According to data published in Salesforce’s 2013 report
** eMarketer research