Customer retention is crucial for businesses of all types, even for those that are rapidly expanding and gaining new customers daily. There is a remarkably simple calculus behind this need: Acquiring a new customer is often five times more expensive than maintaining an existing relationship. Improving customer retention by just 5% can increase profits by up to 95%, and loyal customers are five times more likely to repurchase from the same company, making efforts worth it.
Customers can be fickle when it comes to deciding when to continue patronizing a business, however. American Express found that one-third of customers would consider switching businesses immediately after receiving poor customer service, for example, with this figure rising to 60% of customers after two to three such instances. Determining what customers consider poor customer service can also be tricky, as one person’s deal-breaking experience can be another’s easily smoothed-over hiccup.
Businesses can utilize behavioral analytics to examine customer interactions at the source, find these friction points and help user experience staff resolve them. This month, PYMNTS explores the various factors that drive customer dissatisfaction and how behavioral analytics can help pinpoint and eliminate them.
Obstacles Impeding Customer Satisfaction
Various factors can impede customer satisfaction, as each customer may experience different issues that can potentially dissuade them from completing a purchase. One of the most common reasons for abandoning a purchase at the finish line is the lack of a preferred payment method, with 60% of customers saying they have switched to another merchant if their preferred method was not available. All told, consumers from around the globe abandon up to 75% of purchases before they are completed, with this figure spiking to 81% when considering just mobile transactions.
On the flip side, 88% of customers said they were more likely to complete purchases if they saw a security logo at the checkout page, and nearly 86% said having the ability to opt-in to marketing communications would persuade them to complete the purchase. Another factor that could improve customer satisfaction is the ability to autofill shipping addresses with billing addresses: More than 88% of customers say this feature improved their most recent online shopping experiences.
PYMNTS’ Checkout Conversion Index found that checkout frictions have increased in recent months, however, with the average checkout time clocking in at 145 seconds in Q4 2020 but hitting 179 seconds in Q2 2021. One key reason these checkout times are increasing, despite merchants’ efforts to improve features, is that they lack detailed information about their customers even though they may have industry-wide knowledge about what drives customer satisfaction. Behavioral analytics is a critical tool for closing that knowledge gap and allowing merchants to cater to their customers rather than firing blindly into the dark.
Leveraging Behavioral Analytics to Satisfy Customers
Every customer has a breaking point when it comes to abandoning a purchase, but these points can be difficult to ascertain and fix across a broad customer base. For some, it might be the need to enter a password more than once, and others might decide to abandon a purchase if the checkout page lacks their preferred payment options. Companies without access to behavioral analytics have little data with which to improve customer satisfaction, depending mainly on surveys or feedback forms that rely on self-reporting on the part of the very customers who were dissatisfied in the first place.
Behavioral analytics systems can pinpoint the exact times and methods used when customers fill out various forms, including those they never completed due to unsatisfactory experiences. A customer who filled out every field but the payment information section, for example, has given the company a very good reason to believe that this was a breaking point. The company can then devote resources to streamlining the payment process rather than blindly spending money on improvements to areas with which the customer was satisfied.
The improvements themselves can be remarkably simple, like adding a credit card autofill option or removing the need to reenter passwords after the user has already logged in, but their precision allows them to punch far above their weight. This can mean significant savings for companies by enabling them to focus on their current customers rather than spend vast amounts of time or money obtaining new ones.
The customer is always right, but the question they are answering is often unknown. Behavioral analytics closes this knowledge gap and ensures that companies can dial down on potential hang-ups and improve customer satisfaction across the board.
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