When it comes to building a sustainable business model, customer retention is critical.
Consumer expectations are constantly rising, and they demand brands who are not only able to meet those mounting expectations, but who will connect with them personally, immediately, and consistently.
So, how do you build sustainable customer connections that transform into lifetime relationships? We’re glad you asked.
Recently, Blustream hosted a webinar entitled “Retention Roundtable: Creating Lifetime Customer Connections using AI and SMS,” during which we were joined by an expert panel of industry leaders across retail, subscription, and recurring revenue businesses: Josh Baumrind (Chief Partnership Officer, Retail AI Council), Chris George (CEO, SubSummit), and Meg Meyer (Co-Founder, The Bear & The Rat).
Our panelists discussed the transformative impact of AI and SMS on customer relationships, loyalty, and retention, and how businesses can harness these strategies to build sustainable customer connections.
For those unable to attend, we’ve compiled a selection of the most effective and actionable insights provided by our expert panelists!
Retention is the Key to Growth—and It’s Harder Than Ever
“2024 is the year of retention.”
Our expert panelists could not agree more when Chris George spoke these words.
“Retention is so important especially in the subscription game because you’re trying to build a relationship with the consumer,” said Chris.
Customer retention is also vital to your company’s revenue stream. According to a 2021 McKinsey & Company study, customers who stay loyal to your business will be 10x as valuable as their first purchase.
This is especially important to understand in the current market as Customer Acquisition Costs (CACs) rise and the Life Time Value (LTV) of customers decreases. As Chris noted, recent reports show that subscription and recurring-based businesses are losing 50% of new customers within 3 months.
What does this indicate?
“There’s an underlying problem we’re facing in the industry and it’s the lack of a connection to the consumer,” said Ken Rapp.
It suggests that consumers are increasingly dissatisfied, and, thus, increasingly picky about the brands to whom they pledge their loyalty. As noted by Josh Baumrind, businesses face “skyrocketing customer expectations for both immediate information coupled with 1:1 personalized experiences.” Organizations that can’t meet those expectations will consistently lose buyers. And as they lose buyers, their company will begin to sink like a ship with a punctured hull.
This is why customer connections are critical for business success. Customer connections are the surest path to stability, growth, and retention. Did you know that even a 5% increase in retention can boost revenue by anywhere from 25% to 95%?
It’s no secret to any brand that market conditions remain difficult. Consumers are scrutinizing where and how they spend their money. One purchase may be worthwhile, but if you expect a customer to deeply invest their time and resources into your products (especially if you operate on a subscription renewal model), you need to be able to demonstrate your dedication to connecting with that customer, and your ability to tend to their ever-changing needs.
AI and SMS Increase Personalization and Customer Connections
To build customer connections and confidence in your brand, it’s essential to build trust.
This trust manifests in different ways—proving that your solutions and products won’t fail, proving you’ll be there to support the customer if they do, and, most importantly, proving that you care about the customer through their lifecycle with your company.
AI and SMS-based strategies help build connections with your customers, all the way from the moment they unbox your product to the usage and support stages.
“AI will become like water to your business. It’s going to touch every application, every use case, every part of the business,” said Josh Baumrind.
We can break this down into three different stages with different goals you want to meet to ensure you’re there for your customer:
- Unboxing: Provide personalized digital set-up instructions creating 5-star experiences
- Usage: Offer optimized messages for unique use cases and skill levels
- Care: Ensure instant access to maintenance guides empowered by Zero Party Data
With the help of AI and SMS, you can build these features directly into your products, such that customers feel like the product itself is rising to meet their needs and concerns.
Meg Meyer explained, “When you can replicate yourself through SMS, you've found really good success.”
Just as when your car tells you it's time to change your oil, your business solutions can help customers optimize their usage, address potential roadblocks, and scale the solution to their specific needs.
The Modern Pillars of a Customer-Centric Strategy
As we discussed in our webinar, there are a few key foundational elements that ensure you can make the most of automation across communication channels and technologies:
- Zero Party Data: Data is the cornerstone of automation. By understanding how your customers behave, you’re in a far better position to train your solutions to provide tailored information that promote loyalty and retention.
- Generative AI: While still a touchy subject, generative AI can help provide specific recommendations based on the data at your disposal. As such, customers don’t feel as though they’re receiving generic, one-size-fits-all support across their journeys.
- Large Language Models: LLMs allow you to have individualized conversations with customers, and direct them to the best possible resources based on their unique inquiries. How many times have you found yourself frustrated that you keep being directed to support pages that have nothing to do with your problem?
- Machine Learning: Much like generative AI, a strong machine learning strategy can help provide customers with action suggestions as quickly as possible. By leveraging usage data, machine learning can guide customers through how they make the most of your product, and ensure they avoid speed bumps to begin with.
The combined power of these strategies is perhaps best summed up by Meg Meyer, who explained, “After a while, we were able to distill what major questions we were consistently receiving and how we could replicate our answers through SMS. As a result, five or six conversations can help you better understand your entire customer base, leading to more satisfied customers.”
With Blustream, you can achieve the same—learning from every individual customer to provide a smart and unified connection strategy that speaks to all customers.
Ensure the Lifecycle of Your Product Meets the Lifestyle of Your Customers
Blustream is dedicated to helping businesses ensure loyalty, retention, and evangelism by establishing customer connections. Every product you sell carries the promise that it will improve the experience of the individual or organization who’s buying it. Fulfilling that promise is a continuous process.
Blustream CEO Ken Rapp emphasizes the impact of AI, explaining how “AI is going to enable an ecosystem that will let the leading brand expertise connect to any consumer and create the win-win personalized connection. This all leads to retaining customers and making sure you stay off the subscription death curve.”
With the help of AI and SMS solutions such as those provided by Blustream, enterprises across industries can better understand what their customers need, what they expect, and where they can be better supported. These technologies also allow you to build the ideal customer connections without draining your resources or, even, breaking a sweat.
In increasingly competitive markets, ensuring customer loyalty is essential for success. In 2024, it’s more important than ever. With Blustream, it’s also easier than ever.