Think about a time you received a personalized note from a company. I don't mean the printed notes in deliveries that say "thanks for purchasing", nor do I mean the automated "thanks for your feedback" messages when you fill out a survey, nor the happy birthday messages you may get from your dentist (although that's a nice touch).
When's the last time a human being reached out to you and crafted a message tailored to what you needed? This happens so infrequently that when it does, the message and the company that sent it stick firmly in mind.
My most recent personalized note was when a productivity app incorrectly logged an action I took. Within a day or so of emailing, not only did I get an email from a real person who said they fixed it, and provided tips on how to fix it myself in the future, but they noticed I was on the trial and asked how I was liking it and what I would change. I was blown away by this interaction, and since converted into a paying customer.
Personalized notes are not just a nice touch during support requests - they can be crucial for keeping disgruntled customers from churning to a competitor.
If you're an eCommerce company, you've noticed that sometimes things gets lost in the mail. Customers quickly become frustrated when an item promised to ship in five days has reached day ten stuck on "preparing your order" status.
Not only may this customer have a bad taste from this interaction preventing their re-order in the future - they may cancel the current one, especially if the need was time-sensitive.
Now, imagine that after ten days, this customer receives a phone call from Tony, a representative of the company who says they noticed the stuck status, have looked into it, and have moved the package along its way. In both worlds - one where Tony called and one where he didn't - perhaps the package would have left on day ten regardless, but the brief call signals the customer's importance to the company and the company's awareness of the customer's issue. I guarantee the customer won't have had an experience like this with any other company, and despite the delay, is much more likely to stick around. You may even get this customer sharing their good experience with others.
But if you've got thousands, hundreds of thousands, or millions of customers, you may say this idea is simply not scalable. It would take a call center of employees to do this level of outreach for some larger companies.
The good news is, you don't have to message every single one.
Use CLV to provide an outreach threshold
Using customer lifetime value, you can draw the line wherever your resources allow.
In the above eCommerce example, maybe the customer is a small fish - a drop in the bucket of the monthly revenue. In this case, the eCommerce company can't justify spending the time to do this outreach. But if this customer is one of their top customers - let's say top 10% - and their eCommerce reports flags a high value customer at risk, it's a good idea for this company to reach out.
Take action
Do you know who your top customers are, and which ones are at risk of leaving (both of which you can learn from your customer lifetime value model)?
Good. Now sort those at risk of leaving top-to-bottom by customer lifetime value, and draw a reasonable limit in terms of how many you can reach out to per month based on your resources.
Divide this group into two. Reach out to customers in the first group only, at whatever pace your resourcing allows.
After you've reached out to those in the first group, you can perform a simple comparison. What's the new average churn risk for the group you reached out to versus the one you didn't? How did this impact the customer lifetime value? Does this justify the extra cost to perform this outreach?
I predict you'll be able to measure significant lift in returning customers in the group for which you performed outreach. After this test, you may find that it pays to add resourcing solely for outreach if the change in CLV outweighs the cost.
Don't stop here - how else can you personalize interactions with your top customers in a way that makes them think of you in a good light? No need to speculate, try something and gauge the results, and note the learnings along the way. Not only will you become more customer-centric, you'll become a learning organization with a foundational understanding of who your best customers are and how you can keep them around.
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