Retention-led growth continues to be the way forward for startups to brace for the funding winter.
“The higher your customer retention rate, the more profits you can expect to make in the long run, and the faster your company can scale up,” says Nitya Shah of marketing automation platform WebEngage.
It is a well-known fact that getting people to try your brand is relatively easy; keeping them loyal is more difficult and necessitates a strategic approach to the overall customer experience.
“Invest in building a sustainable business that endures the test of time by leveraging the power of customer retention,” advises the Lead at WebEngage Startup Programme.
Customer engagement platform Exotel’s survey with Indian marketers revealed that a majority, 65 per cent of marketers agree with the statement that customer experience is the new and next competitive battleground. In fact, 45 per cent state that their business will compete, either completely or nearly completely, on the basis of customer experience for the next two years.
The survey was conducted to evaluate the current state of adoption of customer experience, organizational challenges in its implementation, current and desired usage of various omnichannel tools and marketer priorities for this year.
Marketers’ goal is on customer retention over acquisition to increase growth this year, which confirms the need to prioritise customer experience for brand retention and loyalty, the survey found.
Given the concerns of an economic downturn this year, companies are doubling down on engaging their current customer base, the survey added.
Udit Agarwal, VP & Global Head of Marketing, Exotel, stated that to stand out against the competition and deliver additional value to customers, organizations need to adopt a unified approach for conducting and tracking customer engagement.
For Agarwal, building a comprehensive understanding of the entire customer journey and the data collected from all interactions will result in valuable insights into customer behavior and preferences. “Through investing in improvements towards the customer experience, one can ultimately reap a positive return on investment in a digital market,” Agarwal said.
Unfortunately, it can be quite difficult to retain existing customers, especially with the noise and distractions digitally. In light of this, Shah says measuring and tracking retention and creating a strong user base and community for a deeper understanding of your customers are some key drivers for startups looking to retain customers.
According to Raam Nayakar, a marketing measurement and experimental marketing expert, the fundamentals of building a customer retention strategy start with customers. He said that aggregating and analysing customer data can help you in building a successful strategy. “Besides, building cohorts based on customer behaviour on your platform,” he added.
For Shah, better retention starts with measuring and tracking retention and repeat rates from the early days of the startup journey. “If you are not doing this already, now is the time to start. Once you have a hang of these rates, there should be constant iterations, experimentation, and nudges to push these rates higher.”
Building relationships with customers is another crucial factor in a startup’s ability to retain customers. According to Shah, for startups, getting to know their customers and developing connections with them over time is crucial.
“This can be achieved through customized email newsletters, notifications, or even inviting your customers to events. Customers will feel more like a part of your company if you do this, and they will be more likely to return in the future and refer your offering to others as well.”