Latest news with #customerretention
Forbes
a day ago
- Business
- Forbes
Five Ways A Postsale Digital Experience Reduces Risk During Volatile Times
Five Ways A Postsale Digital Experience Reduces Risk During Volatile Times Reprioritizing customer retention lets B2B companies better weather economic uncertainty and volatile market conditions — a daunting task when executive leadership asks everyone to deal with the chaos by cutting costs. But cutting costs independently of business strategy — especially strategies that protect and grow revenue from current accounts — can hurt more than help. Postsale teams come out on top when they optimize costs by pivoting resources and communicating more consistently. They also provide easier access to the tools and information that existing customers use to gain more value from their current investments. Forrester's 2024 Buyer Insights research shows that 81% of business buyers expressed dissatisfaction in at least one area with the provider they chose at the end of a successful purchase. Becoming customer-led is a principal way to avoid this result — and is a pivotal step in any company's journey to customer obsession. Customer-led organizations boast higher revenue growth, increased employee engagement, and (most importantly!) greater customer retention. A primary way to become more customer-led is to make postsale experiences more streamlined and self-directed — something that can be done using existing technology, business assets, and people and (if done creatively) without much additional investment. The key today is understanding how your best customers thrive and getting started on ways to help the rest follow their lead. By understanding how your best customers excel, top postsale teams can construct digital signposts and way stations that direct others along the right paths to value. Teams that make even the most basic investments in developing a postsale digital experience (DX) can see significant returns, as our Total Economic Impact™ models predict. Read on for five areas where pulling together even the most basic DX can have an outsized impact on customer health. Yes, we know: Customer data is a mess, and modifying back-end systems is expensive and time-consuming. But making customer data more robust — and getting customers to help manage their profile information — is a first step that B2B companies should commit to that can lend itself to further automation and enhancement with AI down the road. In the meantime, we see customer teams deploy uncomplicated capabilities that: Consolidating the access points to your support ticketing system, knowledge-base answers, and contact information (phone numbers, email, chatbot, etc.) in one interface/portal page can pay off in reduced customer frustration and streamlined interactions. You can also: Striking the right balance between messaging and reminding can help (new) customers or users remember how useful your existing online education can be. You don't need a full learning management system: Take the time to survey or interview customers about which courses or modules they find most useful and promote those. You could also: Online community platforms are powerful but can require resources that you might not be ready or willing to commit. Look for creative ways to get your customers to engage, network, and share their experiences, advice, and knowledge. At a minimum: Market digital and in-person events to your customers and focus on aspects that benefit them. Track attendance, gather feedback, and look for signals that indicate new purchase interest. Analyze these results to make the business case for further investment. You can: These five areas represent practical, straightforward DX changes that any B2B team can implement quickly as postsale teams explore further investment — particularly for using generative and predictive AI to enrich, personalize, and make each aspect of the DX more effective. For example, the use of AI agents can greatly scale and increase customer productivity in many aspects of the DX. This post was written by VP, Principal Analyst Laura Ramos and it originally appeared here.
Daily Mail
01-06-2025
- Business
- Daily Mail
Why a huge social media presence and millions in the bank doesn't mean you've made it in 2025
An e-commerce expert with 15 years experience has warned Aussies keen to start their own brands about the pitfalls that have caused so many to fail. Joshua Uebergang, 40, has been helping businesses navigate the Shopify online storefront since 2010 with his marketing agency Digital Darts. He told Daily Mail Australia the two simple rules that can help any business thrive - customer retention and keeping a handle on spending. Mr Uebergang said the recent closure of Exoticathletica, an online activewear brand founded in Noosa in 2014, was an example of companies outspending their profits without locking in a loyal customer base first. The activewear brand collapsed earlier this month owing $13million to creditors after raking in $7million in sales of an 'ultra-comfortable' crop top in 2021. It accumulated debts of over $6.2million, including $800,000 to the ATO, $6.7million to the Commonwealth Bank and $114,000 to staff. 'What you generally see on TikTok is customer numbers, high revenue numbers and media mentions but that's all meaningless compared to what really keeps the business afloat,' he said. 'Building up a brand is perfectly fine but the main thing these brands are missing is the fundamental basis of businesses: Can you acquire a customer for less than what they give you over their lifetime?' Emerging companies are too focused on social media visibility instead of investing in creating loyal customers at a cheap price, Mr Uebergang explained. He pointed to the Lifetime Value to Customer Acquisition Cost ratio (LTV/CAC) which compares a customer's lifetime value to the cost a business puts into acquiring them. This roughly translates to how much a customer is willing to spend on a brand compared to the money a business invests in attracting them in the first place. When the ratio becomes lopsided - usually when a customer spends less than three times the amount a business had spent on them - it can cause issues. 'The smaller that ratio is, the more dangerous the business becomes and it also becomes more of a long-term bet,' Mr Uebergang said. Venture-funded start-ups have more time to make up the margin compared to those which are self-funded as the latter relies on the founder's personal wealth. With venture-funded companies, investors and stakeholders are able to make up the initial difference between profits and spending. 'They can really can push because they've got more money than its founder initially had when they started it. If someone has a small business, self-funded company, they can't push that hard,' Mr Uebergang said. He warned new business owners can easily become obsessed with creating the illusion that they're living 'the dream'. 'Founders are incentivised to promote a dream, and it's a bit like general human reality with social media that we want to favour our successes and not highlight our failures, so it's no different to e-commerce brands,' he explained. 'It comes from a "make money quick" belief, which can be great, because it's good for people to try new things.' But he said some start-up owners can I greatly underestimate the debts their start-ups owe at the end of the financial year. 'It's pretty common to see people in their first year or two of business, someone who is not particular to the e-commerce space, shocked to find that after making $4million they might have to pay $2million in taxes,' Mr Uebergang said. A good rule of thumb for newcomers is to focus on making ends meet first before focusing too much on expansion or growing their customer base. Making sure the business is making enough profits and listening to customer feedback is essential to creating a lasting business, Mr Uebergang said. 'Start from day one with profit in mind, so that's having a product that you pay for and then having at least 500 per cent on top of that with what you will sell it for,' he said. 'That will help account for freight costs, general labour, customs, even some marketing to help get customers. 'Second, really master one marketing channel, focus on one and get really good at it. This can take you to $1million in annual year revenue. 'And thirdly, listen to your customers and improve on their feedback from your first sales. Build 100 customers initially and really seek to make them returning sales because they are the people that you ultimately serving.'
Fast Company
22-05-2025
- Business
- Fast Company
When 'good enough' costs too much
Customer retention is more than a buzzword—it is a proven driver of sustainable growth and profitability. Sounds like common sense? Think again. Customer churn is on the rise. Yet, while many organizations recognize the value of keeping customers, far fewer appreciate the full spectrum of losses that arise when performance is merely 'good enough.' The hidden costs of unremarkable customer experience—lost profit margins, missed cross-sell opportunities, shorter customer lifespans, fewer referrals, and reduced purchase volumes—can quietly erode the bottom line. These losses are often multiplied by the ripple effects of customer complaints or service failures, which extend far beyond immediate transaction. The well-proven benefits of customer retention Despite the overwhelming evidence, many companies still chase short-term sales incentives or focus on launching 'new and improved' products, neglecting the reliable, long-term value of customer loyalty. They view retention as a binary effort—keeping the customers or losing them. In reality, it is not. Under the surface of customer relationships, there are further opportunities to capture and enhance the strength and longevity of the relationships. Cost efficiency: Acquiring a new customer is five to seven times more expensive than keeping an existing one. This makes retention a far more efficient use of marketing and operational resources. Revenue growth and profitability: The first product you sell to a customer is usually not the last one you hope to sell. Business growth from existing customers and improved margins are directly linked to the value delivered in the first sales interaction. If it was boringly predictable, the customers will not be interested in growing the relationships. What would the impact on your business be if every customer decides to purchase one more product? Customer lifetime value (CLV): The longevity of a customer relationship is another critical dimension of the health of the relationship and the power of retention. What will the impact on your business be if a customer decides to extend their lifetime by one more year? Predictability results in smart investment: Loyal customers provide steady, recurring revenue, enabling better forecasting and strategic investments. Such stability allows you to invest in new products, adapt new technologies, and expand into new markets—as opposed to reserving your investments and staying behind. What will you do differently if you would be provided with revenue stability? More customers, by referrals: Referrals are gold. But how many of them do you actually receive? What would the impact on your business be if 505 of your new customers came from previous customers? What would you customer acquisition cost look like? What would you do with the savings? These benefits show that the path to profitability is often shortest when it focuses on reducing the currency and maximizing customer value. Boring performance leads to further losses If the benefits of retention are not compelling enough, the hidden costs of mediocrity should be. Deciding to take the customer for granted and delivering less than remarkable value comes with a price. You thought you saved money. Think about the hidden losses you have created. Too often, companies see customers as single product or service purchasers, not as long-term partners with substantial lifetime value. This narrow view leaves significant value on the table and blinds organizations to the deeper financial consequences of failing to deliver exceptional experiences. 1. Tougher negotiations—greater profit compromises When customer experience is boringly predictable, price becomes the primary battleground. Disappointed customers are more likely to demand discounts or concessions, eroding profit margins. In B2B environments, this effect is even more pronounced, as clients leverage the threat of switching to competitors to negotiate deeper discounts. The absence of a differentiated, memorable experience makes it easy for customers to walk away—or to squeeze suppliers on better terms. 2. Loss of future products purchases Customers, unimpressed by their experience, are unlikely to explore additional products or services. Cross-selling and upselling options are routinely missed when the customer relationship is transactional rather than relational. Research consistently shows that personalized and relevant recommendations drive sales, but mediocre experiences stifle these opportunities. 3. Losses in customer relationship longevity Unremarkable experiences accelerate customer churn. Each lost customer represents not just a single transaction, but the entire future value of that relationship. Companies that accept churn as a cost of doing business, rather than a solvable problem, forfeit millions in potential revenue and incur additional costs to replace lost customers. 4. Loss of future customers' referrals Referrals are the gold standard of customer endorsement. Exceptional experiences inspire real recommendations that bring in new customers with no acquisition cost. Conversely, dissatisfied customers are not only less likely to recommend—they are more likely to share negative experiences, amplifying reputational damage and deterring potential new business. 5. Reduction in purchase volume Customers who receive unremarkable value often reduce their spending over time, spreading purchases across multiple vendors to minimize risk. Without a compelling reason to consolidate business, companies lose out on the larger share of wallet that comes from loyal, engaged customers. Why hidden losses persist If the financial case is so clear, why do so many organizations fail to prioritize customer retention and experience? Several factors contribute: Short-term focus: Shareholder and leadership pressure often drive companies to pursue quick wins at the expense of long-term investment in customer relationships. Inertia: Many organizations assume customers will tolerate mediocre experiences rather than switch, underestimating the ease with which customers can move to competitors. Fragmented ownership: Customers are often 'owned' by different departments—marketing, sales, service—without a unified view of lifetime value or coordinated retention strategy. Lack of definition: Few companies have a clear, actionable definition of what constitutes an exceptional customer experience, making it difficult to set goals or measure progress. Incomplete data: Without comprehensive data on customer behavior and value, organizations struggle to make informed decisions about where to invest in experience improvements. Product-centric culture: A focus on products and features, rather than customer needs and journeys, relegates the customer to an afterthought. Misaligned metrics: Traditional satisfaction scores may not accurately reflect the true impact of customer experience on retention and growth. Missing tools and training: Employees often lack the resources, training, and empowerment needed to deliver truly exceptional experiences. Boring is not an option Delivering an unremarkable value to customers is not just an act of taking them for granted and belittling their intelligence. It comes with a heavy price. While customer retention is the cost we see on the surface, it is well understood. The hidden losses from unremarkable performance expose a deeper, more profound case of evaluating the performance. Providing exceptional customer experience is more than about keeping customers. It is about protecting profit margins, unlocking cross-sell potential, extending customer lifespans, generating referrals, and maximizing purchase volume. In a customer-first economy, investing in exceptional experiences is no longer optional. Organizations must honestly assess their customers commitment, confront the obstacles to delivering on retention strategies, and understand the full scope of losses that come from settling for 'good enough.' Only then can they make the strategic decisions necessary to stand out, build lasting relationships, and thrive in a competitive marketplace.
