It’s often thought that the most important function of marketing is to acquire as many new customers as possible. The more custom means more profit, and more profit means great success.
But focusing solely on acquisition can be a disadvantage, as it means you may be seeing a lot of one-off customers. What you really want is customers that will keep using your services. Repeat customers not only give you a regular profit, they’re often more valuable to your business over time - spending more, trying new products and services and even raising brand awareness (sharing social media posts and recommending you to their friends).
Customer retention is most effective when you focus the bulk of your efforts on your best customers. “Best customers” are the ones you wish you could find a thousand of - the ones that will drive the most value for your business in the long-term and help you achieve your business objectives.
It’s also important to remember that retention doesn’t just happen when customers are about to lapse - by investing in the relationship throughout a customer’s lifecycle, your efforts to keep them around will be much more effective.
Identifying and engaging these ideal customers is easy to do in Horizon.
Using Relationship Scores (ELVIS) to find your best customers
ELVIS is a smart tool within Horizon that allows you to measure your customers’ Engagement, Loyalty, Value, Influence and Sentiment.
To learn more on setting up ELVIS, go to What are Relationship scores (ELVIS). If you don’t have ELVIS and you’re interested, please get in touch.
The ELVIS metrics will help you see who are your best customers and your at-risk customers. Finding out who these customers are is important, so you can reward your best customers and encourage them to remain loyal. For at risk customers, it allows you to send them timely, targeted offers to encourage them to engage more.
You can create your best customers straight away. Under the Contacts tab, go to groups, then create a new rule group. Use the and select ‘Relationship’. You can select all ELVIS scores here (Engagement, Loyalty, Value, Influence, Sentiment).
When creating the group, you need to think about what is most important to your business. For example, you may have a marketing objective centred around brand awareness. Therefore, your ideal customers should have a high Influence score, as they’ll be best placed to promote your brand within their social networks. To target them, you would add the rule: Influence is equal to 4 stars.
A rule group doesn’t have to be restricted to one rule - and to truly pick out your best customers, you’ll probably want to use more than one to narrow the focus. Although Influence is important, your best customers also need to have shown some engagement with your content. But as this factor is not as important, you could lower the star rating to something like: Engagement is at least 3 stars.
Remember to add an opt-in categories rule. This ensures that when any messages are sent, they are only sent to customers who have opted in. This is especially important with the new GDPR laws in place.
Once you’ve created a ‘Best customers’ group, you’ll want to create an ‘At-risk customers’ group. To create this, you’ll first need to set up Lifecycle stages.
Finding at-risk customers with Lifecycle stages
Lifecycle stages are a great way to identify what stage a customer is at with your business. Within the Lifecycle stages setup, you should have a ‘At-risk’ stage. This helps identify customers who haven’t lapsed yet, but will soon if not properly nurtured.
The rules for your ‘At-risk’ lifecycle stage will depend on your business model. For example, a fashion retailer might consider a customer at risk if they haven’t bought anything for 6 months, as their normal buying cycle might be every 4-5 months. However, a gym may consider any customers that haven’t visited in two months to be at-risk, because most members come in at least once a month.
You also need to take into account various oddities that could put a customer in the wrong lifestyle stages. Say for instance, you had the at-risk lifecycle stage set to: Hasn’t bought anything for 6 months. However, some customers may love your Christmas gifts and only use you every December. Therefore, they’d be in the at-risk lifecycle stage, but their frequency hasn’t changed. This is where ELVIS comes in handy.
First, you’ll want to clone the best customers rule group you made earlier. To do this, go to the groups area, then click to the right of the best customers group.
Rename your new group to “Best Customers - At-risk”. Add a new rule by clicking . Go to group ‘Relationship’ and select ‘Lifecycle stage’. Select ‘At-risk’ from the drop-down list.
This group will find any of your best customers who are at-risk of churn. Instead of focusing solely on their inactivity, it also considers the ELVIS scores that indicate these customers are important to your business.
Engaging with your customers
There are many ways you can reward your best customers. Of course, it all comes down to what you can offer, but the important thing is that you add some value to the relationship. This makes them feel appreciated and keeps them loyal to your business.
You could send a one-off campaign, with exclusive offers, such as a 20% off voucher, or priority access to sales.
If you have a loyalty scheme with us, you could create a special offer, such as double points for completing an activity or a voucher for a third-party offer, like free cinema tickets. To do this, create an offer as usual, remembering to create a unique tag. Edit your new tag’s recommendation rule, adding in the rules you used for your ‘Best customers’ group. Now, only your best customers will see this offer.
You can use similar methods to re-engage your at-risk customers - for example, sending them targeted campaigns and offering them exclusive deals, to entice them back. By separating out your best at-risk customers from the rest, you can give this segment offers that are more relevant or have a higher perceived value, increasing the chances that they’ll re-engage.
Keeping loyalty customers engaged through triggered messages
Another important feature to use is Triggered messages (found under the triggered actions tab). Currently this only applies to loyalty customers.
There are many options here to keep customers feeling appreciated, from sending them a discount code for their birthday, to warning them that their points will expire soon.