LOVE THE ONES YOU’RE WITH: HOW CUSTOMER RETENTION DRIVES BUSINESS GROWTH
A few years back, I was invited to sing at a friend’s wedding. Music is really important to them. It’s a huge part of their shared history; it makes them smile. They get goofy grins on their faces when they remember gigs with mates at iconic Brisbane music venues that no longer exist. Paul Kelly and Dan Sultan are their Wordsworth and Keats: they find poetry in song lyrics.
The artist had to be right (not too commercial, but not so completely niche that their friends and family refused to get onto the dance floor. It had to have the right rhythm: nothing like a five beat bar to confuse a crew who only dances at weddings. And, of course, the lyrics had to be prefect.
Finally, they chose a song by Ben Folds Five, about a husband and wife who live until their nineties. The old man passes away, and his wife—rocked by grief—dies a few days later. (No really, it’s a happy song!) To my mates, the song speaks of how life-changing deep love is and how, sometimes we don’t realise that until it’s too late.
There’s a lesson there for brands, I reckon.
Too often we are focussed on us, and not properly concentrating on the people who matter most to us: our customers. (It’s estimated that 79% of customers take their business to a competitor within week of experiencing poor customer service. The cost is gargantuan: more than $1.6 trillion!)
Keeping the ones we love is critical.
Retaining our customers—and attracting new ones—means we need to stay relevant and superior. In fact, research shows that developing strong and devoted relationships with your customers follows pretty much the same rules as building a bond with a loved one: you need to be honest, reliable and trustworthy. You need to be a good listener.
Just ask Kieran Flanagan and Dan Gregory, the ‘chief humanists’ at the Impossible Institute. Their book Selfish, Scared and Stupid, argues we need to do a better job of understanding humans, how they behave and what they want if we’re going to deliver better products and services. I reckon peoples’ needs fall into four buckets.
Individuality: Be a standout
People want to know their needs (or desires) matter to you, to feel you’ve got a bespoke solution just for them. There is a growing, seemingly insatiable thirst for custom products: driven in no small part by the millennial purse. As Jodie Fox, CEO of Shoes of Prey, says, “We’re heading to a future where customised product is the norm.” According to a consumer study by Deloitte, half our customers want bespoke products. And they’re willing to wait longer for them. To Fox’s point, while most retailers cannot compete with Amazon’s shipping times or price point, they can compete on individuality.
Simplicity: Take away the pain of complexity.
People want easier lives. We want to buy things that work, all the time, in the way we were promised it would. In his TED talk, Towards A Science of Simplicity, Harvard professor George Whitesides suggests simple things are predictable, accessible and elemental. Simple things have a low psychological barrier of entry, and they just work, intuitively. For example, when developing the first iPod, Steve Jobs applied a rigid test: it had to take no more than three clicks to get to where he wanted to go.
Legacy: What you leave behind.
People want to be surprised, delighted and excited. We buy with our hearts, not with our heads (as much as we’d argue the opposite is true.) Our experiences, whether of a holiday or a hotel stay, are emotionally driven. And so, to grow our businesses we must offer truly next-level experiences. This is particularly important for capturing the Millennial market. As Marcie Merriman, Executive Director of Growth Strategy and Retail Innovation at Ernst Young says, ‘Experiences drive (Millennials) more than the products they buy. They don’t want to buy stuff. They’re buying an experience and the product they get through it is kind of a bonus.’ Make it memorable.
Intimacy: Building connection.
For millions of years, humans have lived in groups: we’re wired for social connection and meaning. The brands doing best in the current climate leverage this knowledge, building tribes of loyal followers who share the company’s ethos. Creating a sense of belonging and shared purpose is the basis of customer retention. It’s also driving big bottom line benefits: according to studies by the University of Michigan, engaged customers spend more with each transaction and overall. At its most brutal, this equates to bottom line benefits: the University of Michigan found engaged customers spend more money.
We’re in business because of the people we’re lucky enough to work with. We stay in business and grow our business when we remember to put them first and meet their needs.