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Why Customer Retention is Important?

If you run a business you know how hard is to bring in a new customer. You have to rely on advertisement and existing customer valuable feedbacks to grow your customer base. While every business owner plans to bring in new customers a highly knowledge one will work on ways to retain the existing customer. It is far cheaper than bring in new one.      

Why a business has to concentrate on retaining customer than bring in new one?

As per stats it’s 5 times costly to bring in a new customer than retaining the existing one. A successful business will be profitable if it can retain their customer base. Customer retention is crucial in this fast paced world. Some call it art and some call it science, But I truly believe it’s an emotion. As a business we need to tweak the right emotions on the customers to retain them.

Key Factors for Business Growth

The key factor for any business to grow is determined by the 2 main non tangible factors trust and customer satisfaction.

Let me share my real time experience on these. The first key factor is Trust. 7 years back I was in Ohio, US and wanted to buy a digital camera as there was plans to go on a vacation on the upcoming weekend. Since ordering online will take time to deliver. I was also not sure if the camera gets delivered before the start of my trip. I decided to buy it from BestBuy retail store.  The obvious question here is, Though there are lot of electronic stores why did I choose best buy?. The simple and straight answer is Trust. The store promises the buyer they are offering the product for the best price. And if at all we prove the same product is available somewhere cheaper they will match slash the price to match it. I went in bought a Sony 12 megapixel digital camera after testing out all the models in my price range. The trust that the customer gets is that he is buying an item for a price nobody else can offer. This is what makes a customer to return in the future as well. After that purchase and due to the trust I had on BestBuy I later bought 2 LED TVs, a GPS, iPad and Pen drives. That is the power of trust.

The second key factor is the customer satisfaction. Again let me share a personal story. Before 5 Years in Plainsboro, NJ. I entered into a super market on a special day. It was my spouse birthday and directly went to the pantry section and saw the cakes on the display. I chose one of them and asked the baker to write the birthday wishes too. She asked my favorite color and wrote the message. She packed it neatly in a box and handed it over to me. I took it with joy, billed it and marched to the exit door. Somehow I lost my balance and dropped the cake upside down. I was totally disappointed how our carelessness can turn the moments of joy into moments of agony. I collected the box from the floor and opened it to find out that the cake was totally messy. I went back to the pantry and met the same bakers and asked if there is another piece of the same cake I bought before. She enquired why am I buying it again. That’s when I explained the fate of the old cake. The point to note here is that since it was my mistake I didn’t ask for a replacement. But the Baker was so kind and she took the cake back and offered me a new one without billing it again. I thanked here so much and that act of kindness flashes me every time I go out to buy a cake for any celebrations. I head straight to same shop again and again for buying cakes.

Any business can flourish only with a returning customer. Trust and Customer satisfaction top my list when it comes to retaining them. As per Pareto principle 80% of business comes from 20% customers. If we have the knowledge to sort that 20% customer and able to retain them any business can be successful.

Know More about Factors that drive Customer Retention

I would like to quote to classic examples of PayTM mall and Amazon for retaining their customers. PayTM does that through cash back offers where as Amazon gives a % off on regular monthly buy outs. Amazon also is a classic example for underpromising and overdeliver. You might have ordered a product from Amazon and delivery time mentioned was 3-4 days at the time of order but you received within 2 days.

Final thoughts: Happy Employees = Happy Customers

Most of the time business overlooks its own employees. They forget that only when employee is happy he/she can keep the clients happy. Business should treat an employee as good and as important as its customer.

ArunAnand R

5 Ways to Generate Leads for B2B Business in India

I was having this interesting discussion on the process of generating Leads for one our startups that are working in the B2B space. We employed our model of Demand Generation to the business for Lead generation. Unfortunately, the model did not work very well for the startup. The reason is simple Indian B2B businesses have still not evolved in the online space. For instance, many decision makers in the B2B industry still operate in the offline mode. They may not have a LinkedIN Account. They still prefer Face to Face interactions. Sales proposals are sent to them on Whats app etc. Thats when i learned it requires a completely different approach to generate qualified leads for Indian B2B business. This blog focuses on writing a hypothesis to generate more leads for a B2B Business in India. 
1. Determine your ideal customer:
The first step in the lead generation process is of course, identifying the ideal customer. Your ideal customer could be say, pump manufacturers.

 2. Identify the list of companies that you want to target:

It may be very difficult for you to get the list of ideal customers from one source in India. You may have to use different sources. You can start with Google. Associations of the particular target group can be a good source. There are certain websites that provide details of various companies like JustDial, india Mart,in.kpmass.com. They could be a good source for developing the database of the companies. One ideal way of finding out more details about potential customers is talk to two or three mid management employees of the companies that your are targeting. They can provide you with details of other companies that work in the space. 

3. Identify the decision makers in the company:  

Many successful organisations in India are run in an unorganised manner. It is very difficult to find out decision makers in the company by looking at their designations or by searching in LinkedIN. The best way to identify the decision makers of a company is talk to someone in the company. Of course we could use different tools to find out the decision makers and their contacts. A list of these tools and approaches are listed in https://www.leadfeeder.com/blog/how-to-find-decision-makers-in-a-company/#gref. Though these tools are useful to generate leads in organised companies, building relationships with someone in the company is the best way to identify decision makers in unorganised sector which contributes to 80% of the businesses in India.

4. Whom not follow:  

A very important  aspect of the Lead generation program is just not identify and nurture prospective customers. Marketing has also ensure that certain leads should not be followed by sales. Sales teams may waste a lot of time by following leads that may not convert into business. One way to avoid this scenario is to build relationships with mid management teams of your customers who have 10+ years in the industry. The mid-management friends can guide you on which companies have budgets, their decision making patterns and also on the process they follow. They will have a thorough understanding of the whole industry.

5. Nurturing the Leads:

Once you have developed the database of the list of companies and the decision makers to reach out, you could use many marketing tactics to create awareness about your company , educate the decision makers on how your product/service can help their organisation better and complete the sale.   
Once you have the list start the marketing campaign/sales campaign!!!
Dr. B. Kaarthick
CEO – Cultiv8

Optimize Your Website For SEO

6 Steps To Optimize Your Website For SEO

It is very important to optimize your website for Search Engine Optimization. When someone searches for a particular product/service and if your company is offering that product or service then you should be listed in the first page of Google results. Less than 5% of the audience will move to the second page or further. Further, the person who is searching for the product or service is someone who needs the product/service making him a very potential client for the company. Hence, it is important to build the SEO of the website.

 
SEO can be quite intimidating because it does not have particular guide line and GOOGLE continuously keeps updating it crawler. But there are a bare-minimum things that needs to be taken care of while building the website. The six steps outlined below may not be enough to list your website in the first page of Google Results but these hygiene issues have to be properly addressed while building the site.
  1. Title Tag: The title tag of the website tells what the page is all about. It should be less than 70 characters. Choose the title tag for every page carefully. 
  2. Meta Description: The meta description on pages of your website gives search engines a little more insight into what your page is about. To choose the right Title Tag and Meta Description for the pages do an anonymous search in google about the content you are writing in the page and google will display a list that will guide you better to choose the meta description. 
  3. WordPress Plugins: If you are using WordPress to build your site then you can use free plugins like All in one SEO and Platinum SEO for Title Tags and Meta Description. You can also get suggestions using paid plugins like Scribe SEO.
  4. Index the Images: Make sure the images are indexed in line with the service or what the images describe. Many website index images as 1.jpg etc. This does not help SEO in anyway. 
  5. Build Internal Links: When you write posts and blogs make sure the blogs are linked internally to other pages in the website. Like say a blog can be linked to the product page. Building external links is good but having internal links also matters when you cannot build external links. 
  6. Format the blog: When you write a blog, name the blog properly. The content should be optimized to become a Snippet. This can be done by having a Header (H1) which will be the Title of the blog. Sub Headings H2 and H3 become the snippet. Make sure you use the format “H2.” and not “ H2)”. Search engines understand H2. Use Bold letters fro Sub Headings and important messages. 
 
Finally to understand How SEO works and how to build SEO using content marketing i strongly recommend you use this guide by Hubspot. Click here for the link

Dr. B. Kaarthick,

CEO, Cultiv8

3 Things About How To Increase Your Revenue From Existing Customers Your Team has to Know

The ultimate goal of any business is to earn more money from their customers. But this doesn’t happen all of a sudden. To achieve this, you have to put ingenious efforts to acquire a large customer base, make them activated and retain them. Understanding deeply the psychology of customer behavior will help greatly in monetizing and increased revenue from them.

 Let us see some effective ways to generate more revenue and optimize earnings from your customer base.

1. Data Analysis

Knowing your entire customer journey right form their acquisition to retention can help you in identifying the barriers in generating revenue and any friction in payment process. Analyze where the company is making most money and where they lose. Identifying these pinch points (where potential earnings are lost) and causes for the drop-offs will generate ideas for fixing up the revenue leaks.

 

2. Customer Segmentation

Customers can be segmented by measuring the level of user’s engagement an ARPU (Average Revenue per User). Customers can also grouped based on age, location, source of acquisition, products/service they use the most. Measuring the revenue from each of these customer groups will provide good insights on which customer segment you should increase your focus on.

This breakdown of user base varies for different companies. Therefore, creating these groups can lead to various ideas to satisfy customers with specific wants and needs.

3. Customized offerings

Personalization is a tactic for building strong relationship with customers to retain them. Major reason for success behind Amazon, Google, Netflix is they have developed strong “recommendation engines”. However, building such engines are not relatively complex as you think. It can be generated using the various algorithms on the data collected as per the requirement. To start with, target a small segment of customers to capture their response and effectiveness.

Conclusion

Apart from the above mentioned ways, you can boost up your customer’s purchases is to offer them additional items to purchase or more features to pay for. A good e.g. for this can be Amazon with its wide range of products and number of payment options which ease customers’ experience and satisfies them. Surveys can also be a powerful tool to know what people are willing to pay for.

To conclude, I suggest letting the customer data lead the way in measuring customer’s needs and the company to take necessary growth steps to maximize the revenue.

 

Srisakthi.K  

Community Manager

Factors that drive Customer Retention

Purpose of any business is to create and retain a customer because high retention is always a deciding factor for achieving high profit. A research done by Bain & Company has revealed that a 5 % increase in customer retention rate increases the profit from 25% to 95%. As we all know that it takes so much money to acquire new customers, the loss of each customer comes at a high cost. Increase in the average revenue you earn per customer, in turn, could be invested more in the company’s growth, creating a virtuous cycle.

The best example of retaining customers to a large extent is Amazon. The company’s subscription program, Prime membership was a great success in retaining customers. 73% of the free trial subscribers converted to paying subscribers and 91% of the first-year subscribers have renewed for the second year.

Factors that increase the retention rate

Let us see the 7 major factors that drive retention on which the companies should work to stop defections/churn (rate of loss of new users) as early as possible

  1. Providing high-quality product/service that continually addresses their needs, making it a must-have product for the customers.
  2. Refining the new user experience and making the users experience your product’s core value as quickly as possible.
  3. The use of triggers, such as mobile notifications and emails can be effective in helping to trigger the usefulness of your product in a user’s mind.
  4. Must be constantly watching competitor’s new feature or promotion and make your product being “top of mind” with the customers. Communicating to the customers about your product’s new features and benefits easily accessible to make them stick with you. Out of sight, out of mind.
  5. Looking for the opportunity to capitalize on the power of stored value, the more information customers have saved with your app/product, the more likely people will return to access the data and add more to it.
  6. To solidify user’s commitment to your product by making the use of it habitual for them. It can be done by convincing them of the ongoing rewards hey will receive from returning to your product or service.
  7. Consider having a large number of more specialized products with a limited number of features rather than loading all possible features into a single product.

In order to ensure maximum retention, your first area of focus should be on early retention of new users. Also putting efforts at the resurrection (winning back customers who have abandoned your product) can also be valuable since it increases the revenue. To proceed this, first investigate why did they disappear in the first place just simply by interviewing them. By creating specific custom email and push notification campaigns for these customers can sometimes bring them back. 

With all these efforts put to place, every customer who is ultimately retained will represent ongoing opportunities to earn more revenue for your company which is our ultimate goal. 

Srisakthi. K

Community Manager, Cultiv8

 

Customer Activation

Increasing Customer Activation

After you have put all the efforts to acquire large number of potential customers, how do you actually engage them in using your product? Almost 98% of traffic to websites doesn’t lead to activation and most mobile apps lose 80% of their users in just 3 days. The more users who experience the aha moment of your product are more likely to stick with your product and activate it. In order to increase your customer activation, Growth Hacking offers you 3 important points to focus on.

  1. Mapping the Route to the Aha Moment
  2. Creating a funnel report of conversions and drop-offs
  3. Survey of Dos and Don’ts
  1. Mapping the Route to the Aha Moment

 The first step is to identify each and every point in your customers’ journey towards the aha moment of your product – right from knowing your product to their experience with it. To know in details about the Aha moment click here.

You may be well  versed with each and every feature of your product/ app but do the customers really know? In case if you have developed an app, do a trial installation with a third person and observe how easy it is for him to install the app in one go. Learn the obstacles faced by him. In order to use your product, the initial experience must be hassle free. Once they have landed at your app/ website, are they provided with the options to get the aha user experience? So you should list all the options to meet the actual need of your customers.  Just reading through these steps can make you think of many ways where users might lose interest or become frustrated and exit the app/web page.

You always have to study hard about the user behavior and then query them on the basis of your observations in order to make the efficient changes to impact the potential customers.

Once you have identified the steps that lead to the aha moment, next step is to know the conversion rates.

  1. Measuring Conversions and Drop offs

One of the best ways to measure conversion rates is through a funnel report, a tool that displays the rates at which people who know your product moving through each of the key steps in the customer journey. Create a funnel report with no of people vs who visited site, signed up, activated, billed and dropped off. For e.g. For Uber the funnel report will display the rate at which no of people who download the app, create new account, book their ride and so on..

In addition to measuring the conversion rate, the report should also track the channels ( google search, ad words, referrals, banner ads, social media pages )through which the customers have come to know your product. By doing so you discover which acquisition channel you should further focus to gain more active customers. Google Analytics can help you out to create these funnel reports. When the funnel report needs combining data from multiple sources, it becomes a bit complicated. Having a data analyst in your team might be able to identify the data sources to query and build the report effectively.

When the number of people visiting your web page/ app doesn’t pass through billing stage, it is obvious that there is a major stumbling block in the checkout experience. In that case, you should consider providing easy payment options or new design to ease the check out process. Next step is to get out to the public, conduct some surveys to know more about the user behaviour.

  1. Survey of Dos and Don’ts

We all would have experienced the customer survey pop up when visiting a website/app. It can be an effective discovery tool for you for studying user behavior and at the same time annoying to the users. To get the response effectively, the survey should be very brief and should be delivered to users under 2 main conditions.

  1. When their activity indicates confusion or staying on one page for a long time
  2. Right after they have created an account or made a purchase

Both these options can yield valuable insights about why customer decided to take the next step or did not. It is preferable to ask open ended questions or offer a set of answers to chose from. Letting them share whatever they feel gives you a chance to know them better.

An interesting fact is the reason why people abandon your product at any given step will come from people who didn’t give up. To people who leave the app/page without completing their orders, asking “what has stopped you from completing your order” will give you an effective response where you should focus on redesigning the app. 

Here are some questions that will yield good insights about the customer behavior

  1. Does this page contain the information you are looking for ?
  2. Was there anything about the checkout process we should improve?
  3. What convinced you to complete your purchase today?
  4. Is there anything preventing you to sign up at this point?
  5. If you did not make a purchase today, can you tell us why?

Always have in mind, you should never stop once you acquire large number of customers, you should continuously engage them actively by updating your product based on their behavior. As a result you can increase their retention with your product which in turn increases your revenue.

Srisakthi,

Community Manager – Cultiv8

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