Subscription growth hack (by PayKickstart)
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At the heart of every business, be it offline or online, is its customers. Like it or not, businesses are nothing without customers. Therefore, it is understandable that businesses focus on wooing new customers. While there’s nothing wrong with this, it is equally important to focus on customer retention and brand loyalty.
A business must gauge how much value a customer can bring to the table; this is essentially the core concept of the Customer Lifetime Value (CLV) concept. It is a marketing metric measurement that helps put a more tangible value to the amount of money or effort customers invest in your business.
In short, it’s the amount of money that a customer spends or will spend on your business throughout the time doing business with your brand.
A survey done in 2019 confirmed that the business worldwide spent 323 billion US dollars for the entire customer ecosystem. Only $75 billion was spent on loyalty management which is a comparatively small figure. This shows that businesses are not emphasizing retaining their customers as much as acquiring new ones.
Without a doubt, acquiring new customers is a common way to grow a product’s revenue. However, the costs involved in doing so can be high depending on the industry; unfortunately, such costs will not reduce due to the ever-increasing competition.
Furthermore, especially if you have a niche product, there’ll come a time where your acquisition will slow down because you don’t have an endlessly expanding audience you can sell to.
Customer retention is essential to any business. It makes sense to invest in your existing customers as they are likely to spend more than new customers in the long run. Furthermore, existing customers have gone through the sales funnel process, so the costs involved are even less.
Knowing your customer lifetime value helps you make various informed marketing, product, and business decisions, which ultimately also impacts your brand’s loyalty.
The next question that comes to mind would be how to increase your customer lifetime value and loyalty. Here are 13 ways you can explore:
Remember, your customers would be weighing your product against its price and also against your competitors too. As such, if you price your product unjustly high, you can kiss them goodbye, and if you price it too low, you’ll be on the losing end, or they’ll think that the quality of your product may be lacking.
As such, you need to price your product just right. To do so, you need first to identify your ideal customer profile and then consider your customers’ approach towards evaluating your product’s cost. Then price your product based on its strengths, how they resolve your customers’ issues, and the scale to which you believe your customers are willing to pay.
Your customers’ main concern is whether your product helps them and resolves their issues; they want to see positive results in their investments. So, if your product satisfies all these and meets your customers’ expectations, they’re likely to stick to you.
As such, concoct your core value propositions around these outcomes and results. Focus on your customers’ issues and help them solve them over the long term, keeping them happy. This is key to building strong brands, increasing your CLV, and chances of gaining referrals from your customers.
Giving your customers the right product is essential but giving them a good customer experience during the whole purchase journey is also important. It’s no point in having an excellent product if the buying/renewing process is so complicated. You’d want to have an easy and effective conversion funnel.
Some of your customers may grit their teeth and stick throughout the whole purchasing journey until the end. However, when the time comes to renew the contract, they’ll think twice, considering they’ll have to go through the whole arduous process again.
Let’s say you’re selling a suite of digital products. You can look into PayKickstart’s Digital Products, a specially created tool to help you sell your digital products with no hassles at all.
Selling digital products can be pretty challenging, but with PayKickstart, you can provide an external link, incorporate encryption to reduce illegal sharing, and configure time-based or attempt-based download access options. It also comes with built-in conversion and retention tools to help you boost sales.
You can affix a more flexible pricing structure in place and give more payment method choices to your customers too.
You don’t need to be concerned with using any third-party licensing system or building one from scratch, as PayKickstart can create and distribute secure license keys to customers for product activation for you. The keys are 16 digits, alphanumeric at random, and you can also issue additional keys, revoke them, and audit license usage.
No matter the nature of your business, customer support can make a huge difference when potential or existing customers evaluate you. As such, whenever they face any difficulties, and they’ve reached out to you, yet they’re all unaddressed or aren’t solved satisfactorily, you can bet your bottom dollar that they’ll leave.
However, if your customer service is responsive, effective, and delightful, chances of your customers returning to you are high; they’ll stay with you because you have successfully justified their purchases.
Make sure that your knowledge base and customer support are all top-notch so that you can offer quick turnarounds and faster easier access for your customers.
If you wish to cultivate customer loyalty, you have to reward them. When your customers notice you going out of your way to acknowledge them, they’d feel appreciated and cherished, thus promoting a sense of achievement and belonging. Also, your customers will look forward to the next reward and, therefore, be less likely to leave you.
Reward your customers via ways that are meaningful and have significance to them; you can include discounts, access to higher privileges, or more goodies. You can also craft specific customer loyalty programs that are great retention tools that help retain and engage your current customers.
Although this may somewhat impact your margins over the long term, the good thing is that you’d have retained more customers. You have to be far-sighted so that you can increase loyalty among customers and increase their value.
Having someone recommend and vouch for your product carries a lot of weight, as this serves as social proof that your product is legitimate, really works, and is valuable. Obtaining customers this way is quick and does not involve many costs too.
You can have a system in place to reward your customers for their reviews and mentions of your product – a referral program. This program rewards both the referred and referring customers. This can help motivate your existing customers to stick around longer and drive more value throughout their lifetime, increasing CLV.
Sales and marketing are all about relationships. When your customers are not given enough attention, they’ll likely not approach you on anything, for that matter. You need to focus on forging a closer and meaningful relationship with your customers from the get-go so you can always bridge the gap between customer needs and expectations.
Your customers want to be given the assurance that you’re there for them. This can make it easier for them to make a purchase decision and stick with you. Have salespeople qualify each lead, then pass them to the relevant account executives so that they can focus on nurturing those leads. Then, after these leads become customers, focus on nurturing them to increase CLV.
While most would prefer to pay in smaller, more frequent payment methods as they do not wish to commit over the longer period, some are comfortable with paying for annual subscriptions. These will likely make for high-value customers. You can promote such annual contracts by pricing them more attractively as compared to the monthly ones.
You can also include additional features and services to customers who opt for annual contracts. This helps to further add to a yearly contract’s perceived value and thus push more to choose annual contracts over monthly ones. This can also give you more time to prove to your customers that their purchases are justified, thus increasing their CLV.
When your customers know that you’re listening to them, they’ll feel important, and this helps keep them loyal to your brand. This is also an excellent way to improve. You can hold a simple survey and ask your customers to provide feedback and incentive to them to participate in it.
Also, once you have incorporated their feedback into your product, acknowledge them by giving them the credit they deserve; you can make a simple announcement via your marketing channels and maybe send them gifts to show your appreciation.
Generally speaking, no man’s an island, which applies to products and systems per se. Chances are, your product will need to work with others to complete the whole ecosystem for your customers. As such, your product needs to support the necessary integrations; this can extend the functionality of your product to other systems.
However, if your product is too proprietary and cannot work with other popular systems, you’ll be making it hard on your customers as they’ll need to source elsewhere. Therefore, you need to make your product robust and compatible with other tools.
Your customers will need to build their workflows, incorporating your product along with their existing tools. Once embedded, it would be difficult to replace your product as once working fine; customers would be reluctant to make changes – don’t rock the boat.
It would be good to find out what your high-end customers are using and then add such integrations within your product. Then, not only do your customers get more out of your product, they’ll tend to stick more to you, adding to the CLV and increasing loyalty.
Once your customers have used your product for an extended period, it is natural that they may feel that they don’t realize your product’s utility anymore. As such, they’ll move on from you. This isn’t good and will impact your CLV severely, reducing your net margins and revenue growth.
As such, you need to keep your customer churn low by targeting your ideal customer profile and zoom in on ways to attract, convert and retain them. Always follow benchmark metrics for your industry, and keep tweaking until your churn has gone below the industry standard. Then you’ll be able to enjoy higher customer loyalty and lifetime value.
Aka Software as a Service, SaaS refers to customers paying a subscription fee to access specific applications made available over the internet. The applications reside on the SaaS company’s server while the user accesses it remotely from almost any device.
As a business owner yourself, you’ll probably be flanked by tons of matters that require your immediate attention. Simply put, growing your business alone is hard enough; you don’t need other issues to bog you down and derail you from your main objective at hand – grow your business.
SaaS platforms are often comprehensive and able to take over significant portions of some operations essentially. Most offer robust analytics and reporting features that can provide businesses with valuable business insight.
Having the right product from the get-go is only the beginning, as there’s a whole journey where you’ll need to work at making your product stick to your customers, optimize referrals and reduce churn. While acquiring new customers is essential, working on customer retention is also of equal importance.
The above are surefire ways to help you increase your customer lifetime value and loyalty. You can attack them one by one and finetune as you go. You’ll see encouraging results where your customers will stay with you longer and keep paying, which translates to good business.
Pui Mun Beh is a digital marketer of WebRevenue. She keeps an eye on the latest digital marketing and social media trends. She loves to travel around the world offline and online. Say hello to her at LinkedIn.Read More About Pui Mun Beh