Early on, we decided “customer love” was a requirement, not an option. For many companies, the goal to treat customers better — to appreciate and listen to them — is important, but hard to justify in the context of a business. Prioritizing something “fuzzy” like customer love is often viewed as a nice-to-have that cannot get the investment it needs because the ROI is too vague. We beg to differ.
If your customers love you, they are more forgiving of mistakes, loyal and willing to evangelize for you. And yes, loyal, vocal fans tend to translate into a higher lifetime value (LTV).
But how can you measure customer love? Measuring customer love comes down to 5 key metrics: low churn rates, higher margins, deeper adoption and account growth, increased influencer/evangelist marketing and accelerated product development. Let’s take a deeper look at how to approach each of these points.
Low Churn Rates
It is no secret that your most vocal critics can turn into your most loyal customers. But customer love is required to take that customer from a negative space to a positive one. Without it, customers are likely to jump ship and hop on your competitor’s boat.
For those who have been paying attention to the growth of the “Customer Success” industry, we have seen several meaningful companies like Gainsight, PreAct and Tatango appear on the scene to help with problems around churn. As each of these companies will tell you, the most important thing you can do to maintain high rates of revenue growth is keep your existing customers happy and using your products. By engaging with customers efficiently, reaching out and proactively solving problems, you will meaningfully impact your churn rates. For mobile app businesses — which represent our customers — this is such a large problem (70 percent of customers will leave apps without a messaging feature in a month) that a 5-to-10 percent increase in retention can have a 30-to-40 percent increase in a company’s growth rate.
If you adopt the customer love philosophy, customers will understand and appreciate the value-add they receive from the level of personalized attention your team pays them, and they will be willing to pay a premium price.
Customer love is not about exceptional customer service. It is about caring enough to earn your customer’s respect by going out of your way to provide them with an exceptional customer experience every single day. Make it your mission to understand your customers’ wants and needs. Then, structure your offerings around their interests. Your customers will appreciate you tailoring your business, and you will create a better product or service in the process.
Deeper Adoption and Account Growth
When it comes to measuring the impact really investing in your customer experience has on the bottom line, focus on the inputs to your lifetime value calculation. Churn, adoption, satisfaction, growth in spend, assistance in customer acquisition: These are all ways in which happier customers vote for your business with their actions. Investing in your team and processes in order to delight more of your customers will pay you back in spades.
Increased Influencer/Evangelist Marketing
At Apptentive, we have seen incredibly high retention rates for a SaaS business, with a tremendous amount of evangelism and sharing. In our enterprise business, we have seen a 99 percent retention rate in the last year. Our customers go to bat for us, they recommend us to their colleagues and they work with us to make our product better over time. The symbiotic relationship between our team and our customers ensures that we are building something that matters for the long run.
Accelerated Product Development
As a technology organization, we often look at a blank slate with the opportunity to build anything. But the challenge is picking what to build. Increasingly, an active and ongoing conversation with our customers helps us identify the larger, strategic, commonly valuable capabilities we need to be working on. In an environment where your customers understand that you are listening and want to hear more, they are much more likely to tell you their biggest problems. Anytime you can cut waste from the product development process and emphasize the most important work, you are putting money back in the company’s pockets and often, accelerating revenue growth.
Committing to earning customer love should be a priority. Determining the ROI it generates can be tricky, but its rewards are tangible. Fruitful long-term relationships with customers are necessary to long-term success, and earning customer love is the first step.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
Image credit: CC by Robert Williams