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How Does Customer Retention Increase Sales and Improve Margins?

Once you have a customer, you have to keep them…

 

 

In today’s world, many businesses focus on customer acquisition. But little attention is spent on Customer Retention. Companies concentrate on bringing new customers in the door, leaving existing customers to feel undervalued.

Acquiring a new customer is often 5-10 times more expensive than retaining an existing one. And depending on your fixed costs, an increase in customer retention can boost your bottom line profit 25%-100%.

Most importantly, customer retention isn’t just about future purchases and up/cross-sell opportunities. It’s about creating word-of-mouth advocacy and referrals — the most important form of marketing.

 

How to retain current customers and get them referring more often?

Customer retention is a result of combining customer satisfaction, engagement, loyalty, and trust. Each must be monitored, measured, analysed, and acted upon to keep your customers coming back for more.

 

At the core of this lies the Customer Experience (CX).

You should have a clearly defined CX strategy, ensuring a smooth and easy experience at every touch point. You want to put the customer at the heart of your business, focusing on their needs and wants. And, you want to measure and track the Customer Experience to identify key areas for improvement.

 

A Customer Experience Management(CXM) platform can help with that.

 

Customer Experience Management refers to a system of:

  • Collecting customer feedback
  • Engaging with customers to create relationships
  • Measuring effectiveness and bottom-line results
  • Improving retail experience based on customer feedback

This systematic approach helps manage experiences. It helps you understand what your customers want, building loyalty and increasing retention.

 

Create Higher Profitability with CX

By actively engaging, listening and responding to customers, you gain their trust, loyalty and enthusiasm.
And by taking into account their feedback and behaviors, you’re able to make more intelligent business decisions to feed bottom-line results. Resulting in higher retention rates and greater lifetime values.

 

Customer Experience analysis can help with retention marketing strategies as well. It allows you to tailor your products and services to match your customers personal values and preferences.

The key is to identify the trends from data your customers submit through messages and surveys. Then take action!

 

Now, you’re able to intelligently invest in you marketing. You’re better positioned to launch new products which has a reciprocal benefit for your customers and your margins.

If you’d like to learn more about RipeMetrics, and how we can help you improve customer satisfaction, loyalty, retention and repeat purchasing…

Schedule a Demo Today

Product Knowledge Increases Sales

Customers need to feel you have their best interest at heart. Customer tastes are constantly changing. It’s important to monitor these trends to understand the evolving customer demands.

Knowledgeable budtenders understand what other customers are saying about specific products. They’re more informed and able to make better recommendations based on unique customer needs. This results in higher customer satisfaction and a better customer experience.

 

And employees with a greater understanding of the product feel more confident selling to consumers.

Training sessions, testimonials, and personal use are all great ways to gain knowledge. Capturing feedback directly from your customers is another important factor. But it’s often a time a consuming, tedious and manual process.

Voice of Customer (VOC) feedback surveys helps budtenders better understand products. They’re an excellent way to stay on pulse of customer demand.

Customer Experience Management (CXM) platform makes it easy to automatically send a survey after a purchase. It allows you to track the performance and interpret the results.

 

 

By identifying the trends and patterns, you’re able to adjust inventory to sort out poor performing products and optimize your business. Simple reporting allows you to share the results, so your team and budtenders are more knowledgeable and better trained.

 

When customers feel listened to and happy with their product and service, they’re more likely to purchase more frequently, and spend more when they do. They’re also more likely to recommend and share their positive experiences with their friends and family.

 

 

Being able to quickly track, manage and respond to your customer experiences feedback can help improve overall operations. You can eliminate unnecessary cost and make room for new upcoming products to introduce your customers to. All of these strategies can be used in combination to overall increase sales.

If you’re ready to discover how RipeMetrics can help you on your journey to build a world class Cannabis Customer Experience, let’s setup a demo today.

Need to Know: The 3 R’s of Customer Marketing

RipeMetric’s 3 R’s of Profitable Marketing: Retention, Referral & Reputation Management

Effective marketing is a challenging task. There are some basic steps your business can follow to receive a larger response and bring in more profit.

RipeMetrics employes 3 key fundamentals for modernized marketing to create a profitable marketing plan:

  1. Retention
  2. Referrals
  3. Reputation Management
  1. Retention – Acquiring new customers is extremely costly, with estimates stating that it’s 5-10 times more costly to acquire new customers than retain existing ones. Retention marketing focuses on your customers with the goal to create repeat customers, and increase both their frequency of purchase and the average order volume per purchase.

    Offering personalized deals to customers based on their purchases can help retain a customer, continuously bringing them back

  2. Referrals – Referral marketing is word of mouth marketing. Loyal customers are likely to refer to your business and products. Encouraging your customers to tell their friends about you is also a strategy of referral marketing.

    Having a personal relationship with the person referring you to a business creates an initial sense of trust. A lot of money can be saved with referral marketing because it doesn’t cost money, it does require providing a good customer experience.

  3. Reputation Management – Your reputation is something that can bring in sales or drive them away. The way a majority of customers choose a business depends on the review sites.

    Reputation management is monitoring and influencing the online reputation of a business and brand
    Using a comprehensive Customer Experience Management platform and Customer Data Platform allows you to maintain a good reputation by resolving concerns in real time and directly with your customer before a bad review is written.

Conclusion

Retaining customers saves you money on acquiring new ones and at the same time your loyal customers continue to refer and bring in business.

Giving your customers a good customer experience promotes loyalty and good reputations. Using all 3 R’s Retention, Referral, and Reputation management are key strategies that when used together have an entourage effect for a profitable marketing plan.

RipeMetrics is the premier CXM for the cannabis industry. Sign up for a demo today to discover how RipeMetrics can help you on your journey to build a world class Cannabis Customer Experience.

Business and Sales Opportunities with RFM scoring

Receiving constant emails and notifications from a business can cause the opposite effect of the intended outcome. From time to time, these notifications can serve to remind and encourage your customers to come back.

 

It can be hard to know how often to reach out to customers and create balance between being too pushy and bringing attention back to your business. Customers can be unpredictable and have a range of shopping styles.When you uncover behavioral patterns of customers you can use that information to effectively apply marketing strategies and uniquely target customers with the right messages at the right time .

 

Push notification can be a very helpful marketing strategy if used properly.If notifications are sent too often customers will mute them or opt out.

 

The amount of notifications as well as the context of these messages are normally not customized to match the customers needs. Understanding your customers better will aid you in creating personal push notifications and marketing strategies to be most effective.

 

Recency, Frequency, Monetary Analysis (or RFM) is a database marketing tool used to automatically analyze your customers behaviors, and orders them into the most valuable to least valuable.

 

Customers are ranked based on the recency of their purchase, amount of time they come in, and the amount of money they are spending. These scores allow you to effectively target customers.

 

Let’s say your RFM analysis shows a particular customer segment has a high Monetary Value score, because they make large purchases every time they visit your store, but low Frequency score because they only come once a year. You now know you need a strategy that gets these “high rollers” to visit your store more often each year, and you could target this audience segment with an offer to for special premium coupons giving them a notable discount once a quarter, for example.

 

Loyal customers may not need frequent reminders and notifications, with the RFM scores you’re able to differentiate between these customers.

 

If the RFM notices a recent and frequent customer who may not spend much money, it will display these metrics and help you as a business owner know to target these customers to encourage them to spend more on each trip.

 

Being able to customize the approach you take towards your customers makes RFM a valuable tool to your business.RFM scores will also benefit the customers, they no longer will receive unnecessary notifications that do not apply to them. Investing in RFM for your business creates loyal and happy customers who will continue to return.

What is RFM Scoring ?

Each one of your customers is a unique individual with personalized spending habits. Some customers will order a large quantity at once, while others purchase smaller quantities more often. Marketing towards these two customers would need to be approached in different ways.

 

RFM (Recency, Frequency, Monetary value) analysis is the tool that measures the data of your customers purchases to evaluate their patterns and sort them based on the three factors.

 

  • Recency is how recently a customer made a purchase
  • Frequency is how often they purchase
  • Monetary value relates to the amount of money the customer spends

Together, these data points can predict the likelihood a customer will return. This data helps you make optimal marketing decisions. Knowing how much revenue comes from new vs returning customers can give you the information you need to know to be able to turn occasional buyers into regulars.

 

RFM works by analyzing your company’s CDP, scoring each customer on a scale in each of the three categories.

So, for example, depending on the purchase cycle of your company’s product or service you might evaluate customers for recency on a scale of 1-5, with a score of 5 indicating the customer had made a purchase from your company within the last week, and a score of 1 indicating that their last purchase was 10-12 months prior.

 

Evaluating each category together can give you a clear picture as to where to put your money and energy in your marketing strategies. Recent customers could help as an example of what is doing well that keeps them coming back. Regular customers do not need as constant of notifications as infrequent shoppers.

 

Unnecessary reminders can serve the opposite effect. Customers who may have a low monetary value score could be sent incentives and deals to encourage them to buy more products.

 

RFM analysis is based on the marketing axiom that “80% of your business comes from 20% of your customers. Most commonly RFM analysis measures customers based on the scale of 1-5 with ‘555’ being the most ideal customer. Certain deals may work better for these high rating customers than the low rated ones. Unique marketing strategies to fit your customers behaviors creates a better response rate.

Why is CDP better than a CRM?

Why is a Customer Data Platform (CDP) better than a Customer Relationship Manager (CRM)?

 

Customer Data Platform (CDP) aggregates and organizes customer data across multiple touch points, creating a detailed image of each particular customer and their patterns. It collects real time customer data and structures it into individualized customer profiles. When used correctly it allows the business to leverage marketing strategies and provide a more individualized and improved customer experience.

 

Customer Data Platforms is the more individualized and detailed version of a Data Management Platform.“DMPs are cookie-based, do not create a persistent customer profile and integrations tend to be limited to advertising (not the full customer journey)” – Tealium. CDP’s collect data tied to a specific individual whereas DMPs collect anonymous users data.

 

Customer Data Platforms can be used as leverage to market more effectively because of the fact you have a more individualized look at someone’s preferences and patterns.

 

A CRM or Customer Relationship Management platform stores a customer’s transaction data plus some individualized concerns and data points.“They do not have insight into anonymous user behavior (often requiring a form fill or purchase), typically are focused on sales data and only have limited integrations to other systems” – Hill 2020. 

 

Where a CDP autonomously creates unified customer profiles with data gathered across a variety of online and offline channels, a CRM only tracks a customer’s intentional interactions with a company via manual entry.

 

There are many differences between a CRM and a CDP. Some key differences include:

 

  • Customer Data Platforms deeply analyze the lifetime of the customers journey
  • CDPs can collect data both online and offline automatically
  • CDPs can also collect data on unknown visitors
  • Customer Relationship Management platform will only analyze the sales line and potential forecasting of purchases
  • A CRM offline data needs to be uploaded manually
  • CRM can only collect data on pre-existing or prospect customers

 

With a Customer Data Platform you’re able to get more detailed and usable data, to make more effective and efficient marketing decisions. This platform compared to others, can increase sales and provide a positive and memorable customer experience.

 

Sign up for a demo today to discover how RipeMetrics can help you on your journey to build a world class Cannabis Customer Experience.

Customer Data Platforms

What is a Customer Data Platform (CDP)?

 

Customers need an individualized approach, they feel taken care of and trusting. Being able to give a customer a unique and personalized experience used to mean a lot of interactions and time must have been spent with that individual.

 

This process has been made easier with technology being able to automatically aggregate data and analyze it. Customer Data Platforms (CDPs) are the new way to produce a more effective customer experience. According to the CDP Institute, a CDP is defined as “a packaged software that creates a persistent, unified customer database that is accessible to other systems.”

 

A CDP collects data from other sources and centralizes it into one place for better marketing, customer service and experience purposes. Using this data, you can review trends and build individual customer profiles. These profiles include customer-company history, NPS scores and any CXM data.

 

“CDPs are purpose-built to collect data from a wide range of sources, unify it together to form a comprehensive view of the customer across devices and channels, and then make that data available to other systems” (Hill 2020)

 

It also provides stacks which adapts to the customers changing preferences and patterns. More effective marketing strategies can be put into place, advertising based on past purchases, and behavior. Customer Data Platforms also make you more effective in your business. Hours of manual integration can be saved with the automatic integration of data offered by the CDP.

 

“Customer Data Platforms are packaged software that helps companies solve a huge and growing problem: the need for unified, accessible customer data. Like most packaged software, a CDP reduces risk, deploys faster, costs less, and delivers a more powerful solution than custom-built alternatives…

With careful planning, a CDP will provide the foundation your company needs in the years ahead to meet customer expectations for exceptional personalized experiences.”— David Raab, Customer Data Platform Institute.