Feb 06, 2023
Optimizing the Customer Experience: A Journey Approach
You might wonder, "Why is the customer journey important?" The customer journey is crucial because it serves as a footprint of your brand loyalty!
Why is it so important to know the customer journey? This is because it is a sign of customer loyalty that we desire the most. When designing a business or service, the expected customer's journey and the actual customer's journey may be different. Therefore, it is necessary to find and analyze the journeys left by real customers to achieve the following three goals.
- Optimize customer on-boarding process.
- Through the purchase funnel, discover the difference in personas between customers who drop out of the funnel and those who convert to the next funnel.
- Broaden customer’s purchase experience by finding relationships between products.
When these three goals are achieved and applied to the service, we can increase the number of loyal customers.
If so, what is a good funnel to understand the customer journey? Retentics recommends the funnel, Acquisition > First purchase > Repurchase > Loyal customer. This funnel includes customer acquisition by ads as well as the retargeting implemented by CRM. In addition, since the funnel is structured based on purchases, which are high action hurdles, it is easy to discover the qualitative difference between lost customers and converted customers. Analyzing the purchased products together is also useful for expanding the customer's purchase experience. Now, let’s look at specific methods through cases of clients who optimized customer journeys by utilizing Retentics.
Acquisition > First purchase funnel Improvement : Giving first purchase nudge to customers exiting funnel
One way to increase conversion rate of the first purchase funnel is to catch customers who have not made their first purchase even after signing up. The best action is to provide strong benefits to customers who are hesitant to purchase after signing up. However, it is necessary to find a point in time when customers won’t buy even after some time because some customers will purchase without any benefits at the same time. Retentics's Lead to Customer feature shows how long it takes a customer to make a purchase on a daily basis.
L stands for Lead who signed up and C stands for Customers who has made a purchase at least once. According to sample data above, 304 people signed up on the first week of April, 2022 and out of 304 people, 223 made their purchase on the first day of registration.
There is one good example of using this information to improve the first purchase funnel. As a result of Lead to Customer analysis by a customer who sells quality women's shoes at a reasonable price, 60% of those who signed up made their first purchase. Out of customers who made their first purchase, we found out that 99% of their purchase was within 10 days of signing up. This client increased the conversion rate of the first purchase funnel by automating the process of issuing coupons to customers who have not made a purchase after 9 days of signing up.
First purchase > Repurchase funnel Improvement : Conducting customized CRM with a single purchase history
Under the premise that the quality of the product is excellent, repeated purchase experience is needed in order to build loyalty. With Retentics, it is possible to send customized CRM messages to customers who just passed the first purchase funnel. Retentics’s recommendation algorithm, New cross-selling can find out what other product was bought the most among the customers who bought product A. Therefore, even with a single purchase history, we can recommend products that are more likely to be purchased next. While New cross-selling shows correlation between two products in a relatively long period(a year, 6 months, etc.), Item Journey shows the products that customers who bought item A will buy the next most. Depending on the service, you can verify which of the two logics has higher performance through an A/B test and use it.
Many of Retentics’s clients run e-commerce businesses. A lot of e-commerce businesses use product detail pages with high ROI as landing pages for ads. This indicates that at first, they appeal to the product, not the brand. One of Retentics’s clients who sells Health Functional Food wanted to know customers who click and buy the advertised product would buy on their second and third purchase. In particular, the client was curious about the purchase journey of loyal customers who have remained in the service for a long time. We found out that the majority of the customers who remain for a long time buy the advertised product for the first and second purchase, but different products from the third purchase onwards. The result showed that in order to buy products that are not advertised, two purchases of advertised products were needed to build the brand credibility. With a goal to decrease this period of time, the client improved the detail page of the loyal customers’ third purchase product. Moreover, by recommending the product purchase journey of loyal customers to first-time customers, it improved the first purchase > repurchase funnel expanding the product experience at the same time.
Repurchase > Loyal customer funnel Improvement : Finding prospective loyal customers and turning them into loyal customers.
Not all returning customers turn into long-term loyal customers. Only a few returning customers are likely to grow into loyal customers, and it is important to proactively discover these customers and retain as many customers as possible for a long period of time. Retentics’s segmentation feature classifies a group of loyal customers among all customers and finds a leading indicator for becoming a loyal customer. Retentics classifies regular customers who have not yet become loyal customers but are showing significant results in the leading indicator. This is a first point to improve Repurchase > Loyal Customers funnel by making prospective loyal customers into real loyal customers.
Through segmentation, a client operating an O2O laundry service verified the validity of a leading indicator for loyal customers that had been previously hypothesized, and even came to know a few leading indicators that had not been predicted at all. From then, leading indicators found are being used to sort out prospective loyal customers from new customers and are used to send proactive CRM messages for quick onboarding of new customers.
Finding the difference between the personas of customers who drop out of the funnel and those who convert to next funnel
Along with improving the conversion rate of each funnel, identifying the difference between lost and passed customers is also necessary to optimize the long-term customer experience. One of our clients who runs an online book rental service had a problem as a lot of people did not make their first purchase even after searching for a book and adding it to their shopping cart. To find out the reason, Retentics compared the difference between the shopping carts of customers who had items in their carts but did not make their first purchase, and the shopping carts of long-standing customers at the time of their first purchase. The result showed that customers who passed their first purchase funnel added more books and more various categories of books to their cart. To reduce this gap, the client improved UX so that people could browse books in various categories after signing up.
Optimizing the customer onboarding process and discovering a path to become loyal customers is just as important as improving products and services. That’s because a detailed customer journey can make another competitive difference as there are many competing products. Retentics is not a product that simply finds loyal customers, but a service that turns regular customers into loyal customers. Design the optimal customer journey for your business today!
Written by: Julian Kim
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