Ebusiness success is more than just your bottom line
You’ve heard it before, and with good reason: it’s cheaper and yields more value to retain an existing customer than to acquire a new one.
Running an ebusiness means running the risk of considering customers as numbers and stats rather than as human being in your brick-and-mortar store. Without the concerns of a tangible business, many ebusiness owners are tempted to cut costs and zero in on their sales margins as the sole indicators of success.
The crucial importance of customer retention
However, this could not be further from the truth. If you’re running an ebusiness, be it for a service or product, you should be focusing on the customer, rather than on your bottom line.
That’s not to say that your bottom line doesn’t matter, or that you shouldn’t aspire to be profitable. Simply that there are other ways to achieve success than to put the emphasis on sales and customer acquisition, namely putting the customer first.
Customer retention can affect your bottom line much more drastically and favorably than some would expect. On average, loyal customers will spend ten times the amount of their first purchase. A 5% increase in customer retention can signify an increase of profit up to 95%. And moreover, studies have shown that the customer experience affects a shopper’s decision more than price.
If you set your ebusiness’ focus on the customer rather than your strict profit margin, then you can increase your bottom line through an improvement of the customer experience. This article will look into just how to do that, from a specifically ebusiness perspective.
Why your ebusiness needs to encourage customer success
One hugely important facet of improving your customers’ experience is by enabling customer success. Furthermore, it’s a great example of how empowering your customers will positively benefit your bottom line; your customers’ success is your own success.
Lincoln Murphy is one of the foremost experts on customer success, and its growing importance in the growth and profitability of a modern ebusiness. Here’s what he had to say about the subject:
McClafferty: What does customer success do for the bottom line of a business?
Making your product or service a tool in your customers’ success means that they will rely on you to keep succeeding. If your customers find that your product is responsible for their expansion and carries them from one success milestone to the next, then they will not risk churning. A strategy allows your service to become indispensable, by promoting product adoption and subsequent mutual success.
This presents you with opportunities for upselling and capitalizing on their loyalty towards a mutually beneficial relationship. Your ebusiness must strive to enable their success from the moment they first come across your business as a prospective client and continuing with every interaction. This time-consuming process is incompatible with a sole focus on sales. But by upselling your existing customers and enticing them to make further purchases as they grow, it can ultimately yield a much higher ROI for your own business.
Centering your ebusiness strategy around the consumer doesn’t happen accidentally. The process requires attention and dedication. Let’s look at ways to structure your product, your process, and your staff to best serve the customer, and ultimately, your bottom line.
Structure your product around enabling customer success
Sructure your product to suit your customer’s needs and requirements for success. Your product or service, of course, must be financially viable. But, at its core, it should aim to empower the customer.
“You‘ve got to start with the customer experience and work backwards to the technology.” Steve Jobs
Make your product right for your customers
Ruthlessly test the product. Never stop evolving. Monitor your customers’ ongoing interaction with your product or service, and strive to meet them where they are. A customer-centric ebusiness will rely heavily on testing and a continuous feedback loop in order to draw actionable insight on customer engagement and customer success.
Before and after launching your ebusiness, continuous improvement is key. A/B testing campaigns can help you determine ways to bring your product, website, or content closer to your customers’ expectations. You can tweak minor features to observe how customer engagement, conversion rates, and product adoption are affected.
Collecting feedback is also crucial, since it’s the most direct way to poll your customers. You can ask for feedback in more or less longform ways (simple rating or comment box), and at strategic moments of customer interaction (after a purchase, after a call to support, after a delivery, after rolling out a new feature, etc.). All this will let you know your customers’ immediate reaction to how they engaged with your product or service.
Never lose track of your goal of customer centricity: veering away from it will put you at risk of making product-related decisions which might alienate your existing customers, deter potential ones, and harm your profit margins.
Target the right customers for your product
Consistently with the previous point, your ebusiness should also target the right customers. All the work dedicated to aligning your product or service with your extant customers shouldn’t conflict with your marketing strategy.
Increasingly, customers want to patron businesses (and ebusinesses) whose values, they feel, align with their own. Once you’ve identified your primary customer profile, make sure your marketing strategy caters to them. This feeds back into the optimization of your product in a virtuous loop.
The added benefit is, if you specifically target the customers you know will interact well with your service or product, their retention is much easier. Product adoption will be increased, so they’ll get the most out of what you offer. Their success will be enabled, and your net promoter score will rise.
This all seems like common sense, because it is. However, the practical implementation of this plan isn’t simple. In order to make the interaction between your customers and your ebusiness run smoothly, you need to reduce friction for the customer by working on eliminating their pain points.
Lower customer effort, and see your ebusiness profits soar
One important metric of for customer success is that of Customer Effort Score It can be summed up by the answer to the question, “how hard did you have to work to make a purchase or get a problem fixed/a query answered/a service rendered?” The scale usually goes from 1 (it was very easy and simple to handle my issue) to 5 (it was a monster headache). The lower your score, the better.
A high effort score means that it was a struggle to work with you, and that you may have lost a customer or a deal in the process. A low customer effort score, on the other hand, is a great indicator that you’ve found a way to erode your customers’ pain points. In a word, the transaction was successful.
Before a purchase or signup
This part is relevant to customer acquisition rather than retention. Yes it still stands to reason to remove friction from a first contact with your ebusiness. If you give prospects an impression of ease and fluidity, it will facilitate their conversion into customers.
Display your ebusiness with a clear, legible, and informative website. Provide self-service resources for questions and support, but also make yourself available for questions. Set up a live chat box, for instance. Do not neglect the phone channel, since it is the most human way to interact with a prospect for the first time.
Display a phone number to show transparency and your willingness to provide help. Add a sign-up box, a click-to-call button, and an automatic call-back feature. These will give the customers an easier time, and diminish long, frustrating wait times. None of these features are especially expensive to implement, but will surely benefit your bottom line by accelerating customer conversion.
During a purchase or signup
Once you’ve accompanied a customer through their decision-making cycle, they’ll be ready to make a purchase. Given the high rate of abandoned carts (up to 70%), this part of the proceedings must be simplified as much as possible. Don’t give the customer more opportunities to back out.
Make it easy for customers to see what they have purchased, and to edit their cart if need be. Show your website is safe by showing proof of secure transactions. Offer multiple payment methods. These are all ways to take charge of the customer, lower their effort, and accompany them towards a successful purchase.
After a purchase or signup
If you’re making customer retention a focus of your ebusiness strategy, lowering customer effort doesn’t end with a purchase or signup. Rather, that’s when the battle for loyalty begins.
Your support team is of paramount importance to customer loyalty. They must be easy to reach, like we mentioned previously, and be consistently present on all the channels you offer. Don’t over-promise, and make sure you can successfully man every channel you offer. Letting your customers down with the quality of your support (long wait times, imperfect problem resolution, bad attitude) will hurt your customer retention, eliminate the possibility of repeat purchases, and, since unhappy customers talk, damage your reputation.
In the case of returns or exchanges, it will hurt your bottom line more than anything if you do not lower customer effort as much as you can. Frustrated customers can and will write you off entirely. Conversely, going the extra mile to content a dissatisfied customer is a wonderful way to earn their loyalty. Take the example of footwear e-retailer Zappo’s, whose customer service is completely legendary. They offer free returns, and encourage their support team to take initiative to completely turn around a less-than-delighted customer.
Involve your staff in the success of your customers and your ebusiness
The last link in the chain, but not the least, is your team itself. An involved and motivated support and sales team is the key to making your ebusiness profitable through emphasizing customer-centricity.
Make customer-centricity a part of your company culture
A focus on the customer isn’t the task of one department; your ebusiness must eat, breathe, and sleep it. In fact, the siloing of customer information between disparate departments is the main obstacle to a successful customer-centric strategy.
It’s necessary to establish a set of values to define the sort of relationship you want your ebusiness to develop with return customers. This is why we looked at ways to keep the relationship with your customers mutually profitable. These core values should be formulated clearly, in evocative terms. Think Ritz-Carlton’s “We are Ladies and Gentlemen, serving Ladies and Gentlemen”, or Zappo’s “Powered by Service”.
To apply this strategy, start by hiring team members whose values of customer service align with your own. Then, make your values the focus of your orientation process. Check in regularly with your team to make sure that this commitment to the customer doesn’t wane.
This is by no means a light task. However, hard work shouldn’t be a deterrent. Henry Ford is quoted saying that “chopping wood will warm you twice”, once from the resulting hearth fire, and once from the exercise. The same is true when it comes to committing to a customer-centric strategy. The effort exerted will “warm” your ebusiness by getting your team used to focusing on the customer, and by continuously learning how to better yourself. And the result of that effort will let you reap the benefits of increased customer retention, and a larger profit margin.
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