Customer Retention is Priority #1
Growing your customer base is great, but retaining customers could be greater. With e-commerce booming, more consumers are shopping online, and brands have to compete harder to attract the attention of buyers. Not surprising that customer retention has overtaken acquisition and conversion as a top priority for many businesses.
As a business owner, you might be thinking the same thing. After all, a high customer retention rate is what everyone wants. When you have a high customer retention rate, it increases the customer lifetime value from your business, improves customer loyalty and customer satisfaction. Retaining your loyal customers can improve the average order value (AOV) for your online business. In fact, research shows that improving customer retention by 5% increases profits by 25% to 95%.
In comparison, acquiring new customers is a much more expensive proposition. It may cost up to 5 times more to acquire a new customer than to keep an existing one.
Engaged Customers are Retained Customers
It is easier to retain customers when they are engaged with your brand. But brand engagement spans beyond the product or service you sell; it also covers the experience outside it. Hence, it is crucial to build relationships that keep the customers’ needs and preferences in mind.
Payments can play a critical role in creating an engaging customer experience. An optimized payment system allows your customers to make secure and hassle-free payments. It provides data-driven insights that allow you to make informed decisions and respond promptly to your customers’ needs. AI-based payment systems allow you to offer self-service options to your customers and provide prompt support in case they face issues.
Yet sometimes, the payments process can feel disconnected to many customers. This can take a toll on their patience and loyalty, thus straining your customer interactions. Hence, a ‘one size fits all’ approach to payments will not work.
6 Ways to Improve Your Payment Experience and Customer Retention
There are steps you can take to improve your payments process and the experience you offer:
1. Support multiple payment methods
Offer your customers the freedom to pay with the method of their choice. Offering more local and varied payment methods, especially in Europe, is critical to success. Here is a list of the most preferred payment methods in Europe in 2021. It might be challenging to offer all payment methods at once, but at least ensure you have the popular ones covered.
2. Minimize payment failures
Use a payment system that minimizes card declines and failed payments. It should be able to detect and remedy failed payments. Automating your payment system enables you to streamline the entire process, from sending out invoices to payment retries to dunning and post-dunning action.
3. Analyze your data
Analyze data from entire customer journeys to understand their likes, preferences, and behaviour. Integrating your payment system with your tech stack helps you to offer more customized support. This is because you can access data from different company functions, such as CRM, sales, support, etc., to gain useful insights. These insights can help your internal teams to work together and respond to the customers’ needs in real-time.
4. Personalize client interactions
You have to bring in more personalization to engage deeply with your customers. Customers appreciate that special touch and treatment and are more loyal to merchants who offer loyalty programs, personalized deals, and incentives. In fact, 78% of consumers in the US prefer to buy more from brands that offer loyalty programs. Use data-driven insights to know how and when customers like to engage. This will help you to personalize your customer interactions and target them with the right content and communication channels.
5. Flexibility in subscriptions
Subscriptions are a great source of recurring revenue. Offer your customers self-service options to help them manage their subscriptions with ease. A self-service portal gives them the flexibility to modify or cancel their subscription when they want or connect with customer support teams. You can also use data from this self-service portal to periodically check on customers and see how engaged they are with your brand.
6. Use automation
AI-based intelligent systems can make your entire checkout and payments process intuitive and smooth. This improves CX and in turn, boosts loyalty and retention. Automated payment systems help you to detect patterns of behaviour, from browsing to payments history. You can monitor threats and fraud in real-time and ensure payments are secure. Automating your payment system will also help you to avoid late payments, send personalized payment reminders, and streamline your debt collection process.
Choosing the right payment service provider
Speak to your payment service provider to understand how you can improve your payment experience. A global payments provider can guide you in developing the right strategy, and arm you with sophisticated tech tools to give you the edge. From integration to personalization, your service provider will enable you to offer a seamless payment experience to your customers. This, in turn, will help you to improve engagement, loyalty, and retention.
Jose Augustine is the Chief Business Development Officer at Novalnet with extensive experience in European payment industry and a knowledge powerhouse.