There has never been a better time in human history to be a consumer. Options are plentiful, reviews accessible, and businesses are working harder than ever to please.
This has bred a promiscuous consumer: users hop from service to service, loyal only to that which provides the best in simplicity, service and value. It's actually normal for apps to lose 80% of their customers. Retention curves look like the steepest skate ramp imaginable. And these unfaithful app users don't just stop at the churn; they tell all of their friends about it too.
All hope is not lost, though. If anything, these picky, app-bouncing customers are providing companies with a learning opportuntity.
Research shows that there are several ways to restore virtue to your users and inspire loyalty.
1. Create value
Craft a customer value proposition
Your value proposition states why customers want to do business with you and what sets you apart from the competition. An effective one can help guide every business decision you make.
Listen to feedback and adapt
Apple is famous for creating innovative products that consumers didn’t even know they wanted-- but now can't live without. How does Apple do this? Every day, they are listening closely to what their customers have to say - which explains their exceptional Net Promoter Score. Ask your users for what they want, and incorporate that into product iterations (or creations!).
- Creating value propositions: http://torgronsund.com/2011/11/29/7-proven-templates-for-creating-value-propositions-that-work/
- How Apple strives to delight their customers: http://www.forbes.com/sites/stevedenning/2011/08/26/another-myth-bites-the-dust-how-apple-listens-to-its-customers/
2. Engage your users
Personalize user communications
Engagement does not mean a bi-weekly, mass email-- that would only reinforce a customer’s feeling that they are not being valued individually. Customer engagement begins with personalized communication. Your engagement strategy should start with three basic steps:
- Discover who your customers are.
- Segment them by their needs and behavior.
- Determine what message you want to send.
Engaged customers generate 1.7 times more revenue than normal customers.
Create and distribute targeted content
Next, create and distribute content aimed at each of the segments you created. Your content should be relevant to your target audience and ideally generate interest in your product. Copyblogger provides some great ideas to get you going:
Once you have some content, try out new channels of communication like in-app messaging, social networks, and push notifications.
Don’t be afraid to experiment and learn which channels different customers prefer. Even something as simple as adding a customized salutation to email lists builds a relationship and gets your customer closer to you.
- 22 ways to create compelling content: http://www.copyblogger.com/create-content-infographic/
- Content marketing: http://contentmarketinginstitute.com/what-is-content-marketing/
- Boosting app downloads with content marketing: http://econsultancy.com/us/blog/62462-how-to-use-content-marketing-and-twitter-cards-to-boost-your-app-downloads
- Segmenting email subscribers: http://econsultancy.com/us/blog/10750-the-dos-and-don-ts-of-email-segmentation
3. Service your customers
Treat your customers like they matter
In the hypercompetitive world of mobile commerce, customer service has become a crucial differentiating factor in providing value and meeting customer needs.
A recent study in The European Journal of Marketing found service quality to be the most important factor in establishing long-term customer relationships. Customers cut ties with a business for two primary reasons:
- They feel that they were treated poorly
- They had a problem that was not solved in a timely manner
$83 billion is the estimated total loss by American businesses each year due to lost sales as a direct result of poor customer service. Most businesses don’t set out to treat their customers badly, so why does this disconnect occur? Usually, because there is a lack of communication.
An effective customer service strategy eliminates barriers to engagement, serves customers in an efficient and effective manner, and creates trust and satisfaction. Eliminating these barriers includes: multiple channels for communication (let your customer decide if they want to self serve or live chat), providing customer service on whatever channel the customer is on (if they are on mobile, have an option for in-app chat), and updating your customer every step of their journey (if there is a wait for a chat agent, send an automated message letting your customer know how long they have to wait).
- The 2010 North American customer experience report: http://www.rightnow.com/files/analyst-reports/RightNow-Customer-Experience-Impact-North-America-Report.pdf
Value creation, engagement, and customer service are the core tenets to attracting and retaining users, no matter what business model you are utilizing. Let’s delve a little deeper and explore exactly how these methods can be employed to maximize customer lifetime value.
4. maximizing your magnetism
Apple estimates that there are currently 775,000 apps available in their app store with Android options not far behind. That’s a lot of competition.
Positive reviews, press releases and promotions are extremely effective ways of increasing awareness and boosting download numbers. However, these tried and true methods shouldn’t be the only tools in your bag.
- How to get review for your app: http://spacechimpmedia.com/how-to-get-reviews-for-your-app/
- Writing a press release for your app: http://www.apptamin.com/blog/write-press-release-app-launch/
- Promoting your app infographic: http://www.bluecaribu.com/mobile-app-marketing
- 7 ways to boost app downloads for under $1,000: http://thenextweb.com/lifehacks/2012/11/26/7-ways-to-boost-app-downloads-for-under-1000/
Remove barriers to entry
Engineering the default user behavior
Create a frictionless onboarding experience by reducing the number of decisions the user has to make. In the Age of Instant Gratification, the path of least resistance is usually the most travelled.
Dan Ariely, a behavioral economist and author of the book Predictably Irrational, offers an example of behavioral shortcuts and elaborates on the psychology behind this point. In his study, he determined that the consent rate of organ donors in different countries was heavily reliant on the design of the form at the DMV.
In countries where the default choice was to opt-in to the organ donation program, consent rates were very high. And in countries where the rate of consent was low, people had to check a box to give their consent.
Be the behavioral mastermind
The idea here is to design your app to make the decisions on behalf of the consumer. Lead them through the primary workflow and guide them in creating value – both for themselves and, ultimately, your business.
Lemon Wallet, a popular digital wallet app, recently streamlined their user onboarding process with default behavioral psychology. When opening the app for the first time, consumers are funneled through a process to upload a card to the app. It didn’t matter what kind of card, but it got them on their way to building a digital wallet.
Before the change, consumers were left to explore their app on their own. Cole Mercer, from Lemon, recently shared with me that this small change netted the company a 57% increase in customer retention.
- Managing customer service in the age of instant gratification: http://www.fastcompany.com/3005122/managing-customer-service-age-instant-gratification
- Dan Ariely's 3 main lessons of pyschology: http://danariely.com/2008/05/05/3-main-lessons-of-psychology/
- In 2011, Localytics found that 26% of downloaded apps were only opened once, but an additional 26% were opened more than ten times.
7. Build a loyal community
Social media alone is not a community
You have customers. These customers use social media. This does not mean that you have a customer community.
A customer community is where your business and its consumers can interact and bond over their commonality. Starbucks created an online community built around improving the ‘Starbucks Experience’ at My Starbucks Idea. This not only encourages users to become more passionate, but it provides the company with a valuable communication channel.
Using an established social site like Facebook or a specialized platform you can create a customer community to:
- Learn more about your customers and what they want
- Communicate new offers to your most valuable users
- Provide a customer service channel
- Generate Connectors, Mavens and Salesmen
- How to build a real community of users: http://adage.com/article/small-agency-diary/marketers-build-a-real-community-customers/234355/
- How to build a Facebook community: http://www.socialbrite.org/2009/10/09/how-to-build-a-facebook-community-14-levers-you-need-to-be-pulling/
- Platforms for creating online communities: http://www.zdnet.com/blog/hinchcliffe/ten-leading-platforms-for-creating-online-communities/195
8. Create passionate users
Passionate users are a catalyst for growth. They’ll generate excitement about your product and inform their friends.
You'll sometimes hear these users called evangelists. They’ll spread the word about what sets your business apart from the competition. They’ll convert others and make believers out of them, too.
Malcolm Gladwell described these types of people as "The Few” in his best-selling book The Tipping Point and how their involvement can create word-of-mouth epidemics that dictate social trends.
Building an online community encourages these types of users and can lead to far greater buzz. This is the reality of Web 2.0 and by creating a forum for your acolytes to gather and share ideas you can encourage these promoters as well.
- The Law of the Few: http://en.wikipedia.org/wiki/The_Tipping_Point#The_Law_of_the_Few
It is generally accepted that existing customers are more valuable than potential ones. Forbes estimates that it costs six or seven times more to acquire a new customer than keep a current one.
Existing customers hold several key advantages over prospective ones – they don’t come with high acquisition costs, they’ve already bought into your concept, and they are far more likely to do business with you.
If that wasn’t enough, think of all that time and money you have invested walking right out the door every time an unhappy customer leaves. Not to mention all of the terrible things they will tell their friends and family about their experience.
91% of unhappy customers are unwilling to comeback for repeat business.
As we mentioned earlier, customer service is your best weapon against users jumping ship.
- The customer complaint iceberg: http://www.quinntessential.com.au/Customer-Feedback.htm
Go above and beyond
“There are no traffic jams along the extra mile.” -Roger Staubach
As clichéd as it sounds, it is crucial to go above and beyond customer expectations. Service has been found to be even more important than trust in creating customer commitment. What constitutes great service?
Acknowledge your mistakes
It’s not doing anybody any favors by pretending that customer complaints don’t exist.
80% of companies are convinced that they provide a superior customer service experience, but only 8% of their customers would agree. The first step is admitting you have a problem – like Domino’s Pizza CEO Patrick Doyle recently did.
This is especially true because your customer will definitely acknowledge you have a problem.
- The art of admitting failure: http://blogs.hbr.org/cs/2011/03/the_art_of_admitting_failure.html
9. Unearth complaints
Listening is only half the battle. Many complaints need to be exposed. Some customers will take the time to share their dissatisfaction, but the vast majority will simply defect to a competitor.
Only 4% of unhappy customers will voice their complaints. 91% pack their bags in the middle of the night and leave.
It is important to solicit complaints by making sure unhappy customers have an easy method of registering them. Even casual, offhand remarks can contain valuable customer insight. Listen carefully and try to anticipate customer needs.
- Anticipating customer needs: http://www.huffingtonpost.com/daniel-burrus/the-importance-of-anticip_b_1596745.html
Address the problem quickly and thoroughly
More than half of customers expect a reply to their service email within 10 hours. This is not an easy benchmark to achieve, but it is possible.
Customer Relationship Management (CRM) software can be used to monitor individual customer habits. In the early days of CRM, only the largest corporations could afford implementation. However with the rise of SaaS CRM, this option has become increasingly attainable for SMBs.
In addition to customer support systems, CRM software can also manage sales, marketing and even social media communication. Some help desk solutions are narrower in scope than traditional CRM platforms and are generally less expensive. Their offers vary and provide options like online ticketing software, feedback enablement, online help chats, knowledge base and FAQ creation, and SDKs that offer support desk and data collection capabilities.
Different methods of providing technical assistance require different support strategies. Regardless of the method, customer support must be accurate and to the satisfaction of the user.
A customer who has had their complaint resolved quickly will return for repeat business 70% of the time.
- How to provide technical support: http://www.smashingmagazine.com/2011/10/10/supporting-product-providing-technical-support/
- Best practices for implementing SaaS CRM: http://www.cio.com/article/378313/Five_Best_Practices_for_Implementing_SaaS_CRM
customer service in practice
In fact, a customer that receives exceptional support is more likely to become an evangelical fan and share their POSITIVE experience with others – just like Peter Shankman did after an exceptional service experience from Morton’s Steakhouse.
Peter was flying into Newark Liberty Airport after a long day of meetings and travel. Before his flight took off in Tampa, he tweeted Morton’s and jokingly requested they meet him at Newark with a Porterhouse steak.
I’m sure you see where this is going.
When he touched down, a tuxedoed Morton’s employee was waiting for him with the steak he requested. Was this atypical? Of course. But that doesn’t make it any less remarkable. Morton’s incredible customer service that day likely ensured that Peter Shankman will remain a loyal customer for life.
The fact that he blogged about the experience and that the post has over six thousand shares on Twitter is only icing on the cake. Proof of the power of going above and beyond for your customer.
- Shankman's exceptional customer service experience: http://shankman.com/the-best-customer-service-story-ever-told-starring-mortons-steakhouse/
Create a personal connection
Cultivate conversations and communication with your customers across multiple channels. Not only will you be building a better relationship, but you will also have a greater understanding of how they view your business. It’s free market insight.
Through social networks
Social networking sites offer instant access to thousands of your customers and provide a passive method of communication on a DAILY BASIS. Customers are 75% more likely to purchase from a brand they follow on Twitter.
- Improving your business social presence: http://grasshopper.com/blog/2012/05/10-tips-to-improve-your-business-social-media-presence/
Use push notifications
Once an app has been downloaded, push notifications permit developers to engage their customers at any given moment. This intimate level of communication can double retention rates after six months.
However, if push notifications don’t provide any value to the consumer they can be ignored – or because of their intrusive nature – viewed as spam.
Allowing customers to personalize the frequency and content of their notifications creates a better experience. Brent Hieggelke, the CMO of Urban Airship, offers some fantastic suggestions for push notification best practices.
- How to double your retention rates with push notifications: http://www.insidemobileapps.com/2012/05/31/how-to-double-user-retention-with-push-notifications-urban-airship-shares-best-practices/
- Best practices for push notifications: http://mashable.com/2012/06/29/push-notification-mobile-apps-marketing/
Monitor app engagement
Show Me the [BIG] Data! Years ago, developers had to rely on custom forms and digital comment cards for customer usage data. Now, there are a number of mobile analytics tools that track who is using an app and how.
These services provide insight into a number of statistics that can be used in all facets of business strategy and help in determining your apps end-to-end value.
Let’s you know who is using your app. Accurate demographic data can help to:
- Recognize new market opportunities
- Assess the success of current marketing efforts
- Describe current users to investors
Acquisition and retention data
Tracking key acquisition and retention statistics like clicks, installs and in-app purchases to:
- Maximize marketing ROI
- Define user quality
- Determine acquisition cost through various channels
- Monitor advertising campaign success
One of the most useful sets of analytics. Usage data can create a picture of how users interact with your app. Create funnel analyses and learn if users are using the app in the same way that it was designed. This is incredibly handy when determining if your app is meeting your usage goals. Other useful datasets include:
- Screen views
- Session duration
- App launch frequency
- Analytics options for mobile developers: http://readwrite.com/2011/10/05/what-are-developers-options-fo
- Funnel analysis to measure conversion rates: http://apsalar.com/blog/2013/01/using-funnel-analysis-to-measure-user-conversion-rates/
Program habitual usage
Habitual users are more likely to remain loyal
Life360, a family communication and location tool, discovered a method for staying close to users and delivering daily value. Rather than rest on their laurels and just allow users to message each other and monitor their children’s whereabouts, Life360 went above and beyond.
They send crime updates based on each user’s location. Not only is this a personalized and contextualized service, but it encourages habitual use and breeds loyal users. Itamar Novick, Product VP at Life360, recently told me that they were able to increase re-enagagement by 300% using these personalized updates.
We’ve covered a lot of ground in this post, but as competition in the mobile arena escalates maintaining competitive advantage is becoming increasingly difficult. Hopefully the information here will help you to wrangle users and convert them to loyal followers. Use the comments section below to share what you have done to ensure that you’re not a victim of promiscuous users.
Do you have any other tips for taming promiscuous app users?