Businesses prioritize new customer acquisition over retaining existing clients

A typical bank spends approximately $300 acquiring a single new account. However, 32% of new customers leave within a year, with 50% departing within four months. Customer retention poses challenges across various industries, leading to wasted investments in acquisition and subsequent declines in profits and employee morale.

Businesses struggle to retain new customers due to their failure to consistently deliver a positive experience post-acquisition. While companies prioritize incentivizing and rewarding customer acquisition, they neglect retention efforts. Additionally, frontline employees lack adequate training, resources, and compensation. Customer service teams receive minimal financial incentives or recognition for their ongoing efforts with existing customers.

The customer experience is “how customers perceive their interactions with your company"

Creating a positive customer experience is a proactive strategy, unlike traditional customer service, which often responds to problems after they occur. When customers have an outstanding experience, they become advocates for your business, promoting your products and services through word-of-mouth.

From the moment a customer makes a purchase, every interaction and communication influences their perception of your offerings. The first 100 days after a prospect becomes a customer are crucial for building trust and securing long-term loyalty. The customer experience involves eight phases: “Assess, Admit, Affirm, Activate, Acclimate, Accomplish, Adopt, and Advocate.”

In the "Assess" phase, customers consider purchasing from you

In the initial phase of the customer experience, individuals "assess" your company's offerings. They browse your website and peruse reviews, testimonials, ads, and marketing materials. This phase can vary from a few seconds to weeks or months. Smart companies provide positive customer experiences during marketing. Many organizations falter in transitioning from sales to account management. "Pre-frame" the customer experience by articulating and setting realistic expectations of what will happen after a prospect signs on with your company.

Customers purchase in the "Admit" phase, then “affirm” choices as doubts arise

In the second phase, the consumer recognizes a need for a product and decides to make a purchase. However, the customer experience continues after the sale. Neuroscience indicates that when a person buys something new, their brain releases dopamine—a chemical that creates feelings of happiness and inspires a positive outlook for the future. To strengthen the customer relationship, it’s important to celebrate this moment.

“Most companies miss a golden opportunity in the Admit phase to honor the shared excitement and capitalize on the customer’s emotional peak by matching or echoing the euphoria.” For instance, Zogics, which sells products for the wellness industry, engages first-time customers by sending them a cheerful confirmation email after they place an order. This email includes a photo of a Zogics employee holding a thank-you card and features a link to a personalized video. This approach leads to 60% of recipients opening the email and 20% watching the video—an impressive click/play rate.

Address Buyer's Remorse

Almost immediately following a purchase, doubts often arise regarding its value. The more significant the investment in terms of cost and time, the likelier buyer's remorse becomes. Failure to acknowledge and address customers' negative emotions during the "quiet period" post-sale can exacerbate these feelings.

Encouraging customers to express their concerns is crucial. For instance, Book in a Box publishers inquire about clients' sentiments shortly after sign-up. CD Baby, Inc. creatively sends purchasers a shipping notification detailing a fictional fulfillment process. Implementing money-back guarantees, free return shipping, and other lenient return policies can alleviate doubts and uncertainties.

The "Activate" phase starts when customers begin to use their new purchase

First-time use establishes the benchmark for subsequent experiences. Any hindrance to a positive user experience breeds uncertainty. Eliminate barriers that hinder customer engagement. For instance, the iPod was the pioneering device to be shipped fully charged, ensuring customers could use it immediately upon unboxing. Nowadays, most devices are dispatched fully charged.

As an illustration, Tech 4 Kids provides new wholesalers with a brochure featuring a video screen displaying a personalized message. 23andMe tailors DNA sample collection kits and includes straightforward instructions. Thoughtful gestures like offering beverages and enjoyable snacks before a sales meeting can help establish a positive atmosphere.

"Acclimate" phase, customers are introduced to your business approach

Customers become accustomed to the business relationship through repeated use of your product or service. In this phase, they familiarize themselves with your organization's operations. To help customers feel at ease and confident in their transactions with you, it's essential to create welcoming interactions and provide guidance during the onboarding process. Despite receiving instructions, manuals, and process outlines, customers may still have gaps in their understanding of their purchases and your systems and procedures. By carefully guiding them through each step and explaining what to expect next, you facilitate their engagement.

For instance, Domino's customers track their orders in real-time through the Domino's app, providing transparency from order placement to delivery. Similarly, San Francisco CrossFit introduces new members through informative tours, pairing them with a coach and experienced member, and offering introductory classes before transitioning them to regular sessions.

Your offering activates desired results in the “Accomplish” phase

In this phase, your business addresses the need that initially attracted customers. Unfortunately, many companies do not monitor whether customers achieve this important milestone. It's crucial to note a client’s original goal to acknowledge this accomplishment. Some customers never reach this target or do so through a difficult process. In some cases, customers might not achieve their desired results at all, leading to the loss of their business.

In the “Accomplish” stage of the customer experience, it’s important to celebrate users’ successes and remind them that you helped them achieve their goals. The Online Trainer Academy (OTA), an online certification program for personal trainers, tracks students’ progress and sends small gifts and messages to encourage them. When a student passes the certification test, OTA sends a diploma for them to display and share. About 40% of OTA students finish the coursework and take the test, which is impressive given that the average completion rate for online courses is only between 3% and 5%.

During the "Adopt" phase, customers engage in the relationship

At this juncture in the customer journey, customers your brand, evolving into devoted patrons who actively engage in the customer-business dynamic. They internalize your company ethos, freely share insights, offer feedback, and demonstrate brand allegiance. Sustain this positive trajectory by consistently acknowledging and rewarding customer loyalty. Transition the transactional exchange into a reciprocal, enduring relationship that benefits both parties.

Apple "fanboys" and "fan girls," for instance, eagerly queue for hours whenever Apple launches a new product. In 2016, the corporation introduced AirPods, wireless white earbuds with a distinct shape. Sporting them signifies the user's affiliation with the Apple community. Following Apple's example, it's essential to facilitate loyal customers in expressing their dedication to your brand. Harley-Davidson excels in this strategy.

Pop stars like Lady Gaga and Taylor Swift also grasp the significance of rewarding devoted fans. Lady Gaga provides her "Little Monsters" with exclusive perks, while Taylor Swift surprises fans with personally selected gifts and treats. Granting exclusive access, unique rewards, and special treatment to your most loyal clientele solidifies their allegiance to your company, developing lifelong fans and brand advocates.

“Advocates”: Loyal customers are prime referral sources

Advocates promote your company through "word-of-mouth" referrals, which are considered the best form of marketing. They boost their business with your company, take advantage of upselling, and provide valuable referrals. Clients referred to your business often come in with a positive view of what you offer.

For example, 4Knines boosted its sales and value by effectively gathering customer reviews. One month after a purchase, the founders sent an email asking customers to review their product, emphasizing their "small, family-owned" business. The email included a simple link for customers to leave a review. However, when new management took over and stopped sending these review requests, sales plummeted by 73%.

A fruitful referral request is characterized by thoughtfulness, sincerity, and impeccable timing. Inspire referrals by providing incentives, granting rewards that bestow status, or enticing participation with prizes such as backstage passes or exclusive tours. Transforming devoted customers into advocates not only expands your business but also draws in more discerning clientele.

Integrate eight customer experience phases into daily business routines efficiently

1. Explore - Gain insights into your clientele. Identify the data that enriches customer relations and input it into a customer relationship management (CRM) software system. Examine clients' social media, LinkedIn profiles, and corporate websites.
2. Observe - Take note of how customers utilize your offerings to pinpoint opportunities for enhancing their experience.
3. Customize - Uncover what your customers value. Sharing a common interest builds a deeper connection.
4. Surprise - Impress customers with a personalized gift as a gesture of appreciation.