NO MORE FRICTION! Your Customer Stickiness Guide

It’s time to get out the glue because we need to talk about customer stickiness – because it is vital to your customer growth and retention strategies. In fact, I argue it is perhaps one of the most important factors to any product’s success. So, what is customer stickiness, and how does it differ from retention? We’ll get to all of these topics soon enough…

In this very sticky, customer stickiness guide

Customer stickiness definition

So what is customer stickiness? Quite simply customer stickiness (sometimes known as customer loyalty) is about wanting to continue to do business with a specific company, and not switch providers.

What is brand stickiness?

The customer is the brand in customer stickiness. The customer relationship with a company has been formed to such an extent that customer loyalty is significant and customer switching costs are high, meaning many customers continue to do business with their brand of choice.

What is retention vs stickiness?

The key thing to understand about customer stickiness is there exist different levels of stickiness. Simply put, customer stickiness can be defined as either ‘high’ or ‘low’, with low customer stickiness being the absence of loyalty (or rather, an easily-lost customer relationship).

A typical example of this would be someone who signs up for your service but does not need it day after day, week after week – they cancel before too long because they never use the customer service. In these cases, customer retention is not high; customer relationship is pretty much non-existent (hence customer stickiness is low).

For customer service that is used every day – think of something like an Internet provider for example – customer retention rates are very high because they are committed to their brand. If you’re a customer of BT (one of the UK’s largest ISPs), then switching providers would be inconvenient and costly. You love your iPhone, but what if they don’t make Windows phones? What happens when you find out Apple isn’t making laptops? That’s right… MORE FRICTION!

Basically the point here is this: customer loyalty (or customer stickiness) covers both high and low customer retention.

When customer stickiness is high

This is when brand loyalty becomes customer stickiness. This customer retention level means there are various factors that stop customer switching – remember, customer retention happens on its own but customer stickiness has to be fought for . These factors can include:

– customer service

– ease of transition between competitors

– accessibility of the brand’s product range

– cost and value for money a customer experiences with a brand

– discounts or other loyalty schemes within a customer relationship

For example, if you already have an account with Google Drive, then uploading documents to your new Gmail account will be painless. If you’re not happy with your cloud storage provider, then it will take time and effort to upload everything to another provider. That time and effort is customer switching costs – customer stickiness at work – so customer retention is high.

The opposite of customer stickiness is customer attrition, where customer retention falls or brand loyalty decreases. The opposite of customer retention would be customer acquisition/marketing… But that’s a topic for another day!

When customer stickiness is low

Examples of this are companies like Amazon (online shopping) and Zara (fashion retail). Their customer base includes many repeat customers, but the brand relationship isn’t particularly deep; it doesn’t take long before they’re looking into another store or searching for an alternative product. So brand loyalty isn’t particularly strong, which means stickiness is relatively low (customer retention is high, customer stickiness is low).

Zero customer retention vs customer stickiness

Now that we know what customer stickiness is, let’s quickly define customer retention. Customer retention means the percentage of customers that continue to do business with us (no matter if their business has switched from one product category to another). In other words, customer retention refers only to those who still do business with you now – no matter which brand they choose for a particular service or product category. On the contrary, customer stickiness refers to any customer who chooses your brand or product in any service area… So, by definition: With zero customer retention = customer stickiness = customer loyalty.

What is customer retention?

Ok, so customer retention means the percentage of customers that continue to do business with us (no matter if their business has switched from one product category to another). In other words, customer retention refers only to those who still do business with you now – no matter which brand they choose for a particular service or product category. On the contrary, customer stickiness refers to any customer who chooses your brand or product in any service area… So, by definition: With zero customer retention = customer stickiness = customer loyalty.

Why is customer retention important?

Now that we know what customer stickiness is and what it means – let’s talk about why it’s important. For starters, customer retention is vital to customer success and customer satisfaction. In fact, customer retention drives customer loyalty, customer satisfaction, and customer goodwill – all of which help grow your bottom line.

The benefits of customer retention for a business

So what are the benefits of customer retention for a business? Let’s break it down into three main areas:

– Customer lifetime value (CLV) – Your ability to retain customers will massively increase the amount you can charge them. So if you’re able to retain your customers longer from one purchase to the next, they will need to spend more before they feel the need to look elsewhere… And as we know, spending more means making more money!

– Referrals and word of mouth recommendation – Retaining customers will naturally lead to customer referrals. This is because satisfied customers are more likely to tell others about how happy they were with your brand or product experience – whereas unhappy customers will usually rant and rave!

– Analytics and insights – customer retention provide you with the ability to collect vast amounts of customer information that can be used to improve future customer experiences.

 

Why is customer stickiness important?

Well, if customer retention was not enough reason for you: customer stickiness (or customer loyalty) is an extremely strong indicator of potential growth opportunities. In fact, it means that there’s a good chance we’ll see increased purchases from these customers in the future.

Let’s also look at some iconic brands that through their marketing and customer service have excellent customer loyalty, stickiness, and retention:

– Starbucks – customer retention is at 86.3%

– Costco Wholesale – customer retention is at 82.2%

– Zara customer retention is at 81.8%

– Amazon customer retention is at 81.2%

– Southwest customer retention is at 79.1%

– Subway customer retention is at 76.7%

– Home Depot customer retention is at 77.7%

– Apple customer retention is at 77.5%.

So what did brands such as Apple, Starbucks, Subway, and Costco do well? How did they retain their customers and generate loyalty? Let’s get into that in our next section!

Strategies to increase customer stickiness

Ok, now that we know customer stickiness is important and customer retention is vital to customer success and customer satisfaction – it’s time to discuss strategies for increasing customer stickiness and customer loyalty. There are many ways you can do this: From creating the optimal customer experience (all the way through your customer journey) to engaging customers in collaborative relationships where they feel like a part of your brand or product culture.

Customer journey map

To start with, let’s take a look at customer journey mapping… This really helps companies understand what happens throughout their entire customer experience by providing insight into touchpoints, interactions, and emotions. It also helps identify areas for improvement – both within existing customer touchpoints as well as new ones. The main goal here: improve customer stickiness and customer retention by increasing customer satisfaction.

Customer relationship marketing

Next, there’s customer relationship marketing (CRM). This is customer-centric as opposed to product/brand-centric – and it helps build customer loyalty and customer success through the following:

– Relationship development – this involves maintaining contact with customers so they don’t feel neglected and perceive our brand as unhelpful or frustrating.

– Relationship enhancement – this takes place when we use multiple channels to communicate with our customers. So rather than bombarding them with information over just one channel, we send the same message through different communication methods. This way it feels like a complete conversation instead of an interruption… And most importantly: makes people feel special! It also gives customer more of a connection with our brand.

– Relationship maintenance – customer retention and customer success is largely about maintaining customer satisfaction at all times. So we need to encourage customer interaction and dialogue with the aim of solving customer problems and meeting expectations on time, every time.

Collaborative partnerships branding

And finally: collaborative branding (and marketing). This involves partnering up with customers and sourcing ideas for new product and service development from actual customer feedback. Collaborative branding also provides us with an opportunity to create mutually beneficial relationships by giving our customers better visibility both on and offline… Which helps strengthen your brand’s reputation as well as customer loyalty! And let’s face it: nothing says “I love you” like making your customers feel great about themselves and your brand!

Customer loyalty programs

– customer loyalty programs – This includes things like discount coupons, rewards cards, etc. The idea is that you reward customers who are repeat purchasers of your brand or product offering by giving discounts in exchange for their continued business. In general customer loyalty programs help decrease customer churn and increase customer stickiness.

– customer advocacy programs – This includes things like referral marketing, referrals from employees, etc. The idea is that when customers are happy with your product or service offering they recommend it to friends, family members, colleagues… Which has the effect of strengthening brand awareness as well as customer retention.

Customer touchpoints reminders

Another customer retention strategy is consistency across customer touchpoints. What this means is you need to make sure your brand speaks with one voice across all channels (online and offline) so customers’ perceptions don’t change depending on where they interact with your brand or company. Also: Make sure you deliver a consistent customer experience across all channels. Your customer should have the same experience each time, regardless of what customer touchpoint they use to engage with your brand.

– customer touchpoints – This includes things like email campaigns, customer service phone calls, customer service emails, etc. The idea is that customer should always receive quick and consistent responses across all customer touchpoints (from the company’s end at least). And that means no ambiguous replies or taking days to respond to simple customer queries! It also involves making sure customers are acknowledged through different customer touchpoints by rewarding them for their loyalty… Such as thanking them via email after their purchase; offering them discounts when they make a certain number of purchases over time; etc.

Customer stickiness examples

Looking for customer stickiness examples? Look at customer service accounts with your local High Street retailers. High customer turnover means customer retention levels are pretty low, so customer stickiness is also low. Customers don’t stay around long enough to build up any significant customer relationship with these companies; it’s instead about convenience and accessible product ranges (i.e. price points).

Brand stickiness, customer stickiness, and all of the sticky things!

So, the point here? Well, customer stickiness is customer retention. It’s all about customer loyalty and customer satisfaction. In other words: it’s all about customer success! Customer success means we need to focus on increasing customer retention and decreasing the risk of customers defecting to a competitor. The way we can do this: by perfecting our communication methods so we keep them engaged at every stage in the customer journey – which helps increase customer satisfaction and customer loyalty.

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