How to Convert in Every Stage of the Customer Lifecycle (And Create Uber-Engaged Users)
Your success depends not only on converting people into new users, but also on convincing them to take a series of actions throughout their relationship with you and your company.
Here are some useful tips I’ve learned that help increase conversions and engagement at every stage of the customer lifecycle.
Nail Customer Acquisition
Know What It Costs To Acquire Customers
Yes, there is a cost to acquiring customers. You can’t say your marketing budget is zero because you use social media. Too many entrepreneurs don’t know how much customer acquisition will actually cost them.
Your total marketing costs include employees, advertising, and the tools you use. Even if you only market through social media, you still need someone to blog and manage your social accounts. After taking everything into account, you can arrive at your real cost per acquisition.
So why is this important? Simple math, if it costs more to acquire one customer than the value you receive from that customer, you’ll be in the red.
Now that you have your numbers, the equation becomes pretty simple. You can either increase customer value, which will be covered later, or you can reduce your cost per acquisition.
This means either reducing marketing spend, improving conversion rates, or both. If you have a limited budget, you might have to reallocate money from marketing to conversion rate optimization until you find the lowest cost per acquisition (CPA).
This is the sweet spot - it’s the answer to the question: How much of your marketing budget should be allocated to conversion rate optimization and how much should be spent acquiring traffic.
You figure out your sweet spot by determining the proper allocation of your marketing budget and seeing which allocation produces the lowest cost per acquisition (CPA).
For example, if you have $5,000 to spend you need to figure out how much of that needs to be spent on conversion rate optimization and how much needs to be spent on bringing visitors to your site.
If you put all $5,000 into buying traffic and none on CRO you will likely have a low conversion rate and will need a lot of traffic to make up for it. Because you are spending so much on traffic and none on conversion, this would likely be your highest CPA.
Now you need to adjust the different variables that factor into your marketing budget until you find the right combination to produce the lowest CPA possible - maybe it means spending 70 percent of your campaign’s budget on CRO or maybe it means spending 25 percent.
There’s no universal answer to this question because every campaign is different and every budget is different - you need to test and figure out what works best for you.
Show the Right Message to the Right Person at the Right Time and Place
Showing dynamic messages that are personalized using behavior-based analytics will ensure you maximize the relevancy of every word - this will drive up your conversion rate and improve user experience.
Real-time web personalization give the visitor the feeling that your product was made for them.
Create segments for your target market and have different web copy for each segment.
Groupon, for example, identifies which city you are in and displays a list of deals for that city when a user lands on the page.
Even a small tweak that makes your copy more relevant to your target market can work wonders. It can be a customized CTA or a location-based headline like Groupon’s - what’s important is that you make your copy as relevant as possible.
Another great way to use dynamic messages is to tailor your value proposition to each user. A value prop needs to speak to the needs and wants of each visitor to ensure you’re converting as best as possible.
Let’s look at Sittercity.
First, they might determine that you are in need of someone to help out with your kids when it comes time to send them back to school - you might need someone to pick them up, help make snacks and prepare lunches, or help them with homework. If that’s the case, they might show you this:
If, instead, they think you’re looking for someone to help out throughout the summer months while your kids are on vacation, you’d get:
You could also turn to using social proof more effectively. Imagine how powerful testimonials would be if you were able to show a testimonial to a visitor and they just came from that company’s website or already had a relationship with them.
Less complicated, but still effective, would be showing a potential user from a SaaS company a testimonial from another SaaS company.
Each of these adjustments - whether they’re made to CTAs, value props, or testimonials - will increase the relevance of the copy your visit sees. This will help you ramp up both conversions and engagement.
Leverage Social Customer Acquisition
Since there was social media, marketers and executives have been trying to figure out how to monetize it. For your company, you need to figure out how to leverage it for customer acquisition and more effective customer onboarding.
There are some great ways to use social media to drive people into your funnel:
- Promote ebooks and webinars that require a visitor submit some information to get access.
- Run a social promotion that requires the use of your product and asks people to share the result or experience through their networks. Once this happens, you can start asking people what they would do with a free trial (or free account, depending on your free to paid strategy). Those who answer your question are interested and potential users.
- Track which activities are bringing you the most leads and the best conversion rate. If you don’t know what’s performing, you won’t know which actions you need to replicate.
These are just some ways that you can use social channels to drive leads into your funnel, but they are ones I’m familiar with and found the most success using.
Know What Customer Activation Means To You
There are a series of actions in the activation stage of the onboarding process. No matter what the first actions look like, the activation stage ends when the user completes a number of key actions.
These key activities differ depending on your business and a big challenge for many companies is simply knowing what they are.
Usually activation starts with a sign-up, but it doesn’t end there. The user needs to experience the core value of your product and you need to know what that takes.
Take Twitter for example.
They’ve learned that a user needs to follow a minimum number of users to increase their chances of staying active on the platform. That’s why once a person signs up for a new account, they are prompted to immediately start following people.
First, you’re prompted to follow people who are close to your interests.
Or people who are well-known or famous.
Twitter does a great job of activation because it politely forces you to follow people, slowly building up the number of people you follow until you hit that magic number.
You’ll notice that even after following two people, they make it very hard to skip on to the next step. You need to follow at least three people to be able to move on.
This is what Twitter has figured out works for them. They know it’s important.
Ensuring your users have a minimum number of connections might not be the activation point you need to worry about. You do, however, need to find out what this activation factor means for you.
Another thing you need to focus on is tracking the behavior of your users: What actions does someone usually take before they become a fully activated user? You need to monitor and test for patterns and correlations so you can then encourage other users to take those actions. It’s a great way to expedite the activation process.
Without Customer Engagement and Retention, You’ll Fail
The obvious next step after activation is engagement and retention. You need to keep your customers coming back and engaged or they will leave, driving up your churn rate.
Key metrics to measure engagement can be the:
- Visit duration - The longer people are staying active on your site or in your app, the more engaged they are.
- Visit frequency - If people visit your site or app on a regular basis it means you’ve become part of their daily or weekly routine - you’re almost indispensable.
- Depth of usage - This means different things depending on what you offer. If you’re an email marketing platform it might mean the number of email lists and campaigns. Generally, it refers to how fully someone is using your product or service.
In addition to these metrics, you should also identify some metrics that may be unique to your company and user base. Identify these key actions and key performance indicators and keep a close eye on them.
Tracking the right metrics, behaviors, and activities will help you:
- Get a better understanding of your users and their needs
- Identify at risk users before they give up on your service
- Provide real-time responses to customer actions
You may have high user activation rates, but retention and engagement are what keeps them from leaving. There’s little point bringing in thousands of customers only for them to get bored of your product and leave.
A great way to increase engagement is to use content more effectively.
1. Use Dynamic Messages
The first place where you should start using content is in-app dynamic messaging. You should start here because there are so few people doing it right now and it, therefore, is a great way to dramatically increase your competitive advantage.
Too many companies wait for people to bounce from their site or exit their app before they engage them - they try to pull people back in. Instead of waiting too long, shoot them a message while they are still on your site or in your app. It will help keep them on your site or in your app longer.
2. Blog Posts And eBooks Help With Engagement And Retention, Too
It’s a mistake to think that blog posts and ebooks are only designed to drive people into the top of your funnel. Using blogs and ebooks to help with engagement and retention starts with realizing that you need to craft content that is targeted at people who have already converted and are already using your service - make it educational.
To make your material as relevant as possible, monitor common customer pain points and problems - write material that addresses those issues.
3. Forms And FAQs
People love helpings themselves. Make that possible. Lulu, above, has successfully combined forums and FAQs to offer a place where their users and customers come to handle problems and concerns.
You can’t just rely on content like blog posts, messages, and forums to help you keep customers engaged. You also need to be willing to be a real person.
If you notice a user who hasn’t logged on in a couple of weeks, it might be a good time for an email to see if you can help them address any problems they’re having.
Once you’re engaging and retaining your customers, you can then focus on increasing the revenue they bring to your company.
Maximize Revenue Per Client
Having spent the time and effort to improve customer experience throughout the lifecycle, it makes a lot of sense to maximize the revenue you make from the client.
This takes us back to increasing customer value, which was touched upon earlier. Simply put, customer value is the revenue you receive from each customer. Determine which customers have the highest value and make sure you keep them engaged.
Upselling is a great way to increase customer value. The longer they use your product, the more they may need certain features. You can allow access to these features by offering smart upsells.
Track usage of your product to see what is being used and where you can offer upsells to bring the user new features or upgrades. Many VPS hosting services do this well. They provide a certain amount of server space and memory and then as you approach your limits they upsell you to a higher level.
Hootsuite does this well, too. As you can see in the image above, you’re prompted to “Upgrade to Pro Now!” to add more than five social accounts. It’s a great way to immediately capture the user’s attention and try and prompt an action when it is front of mind.
Optimize the Customer Journey for Customer Success
Analyzing and optimizing the customer journey will improve the customer experience - this will make it easier to create an addictive user flow, an experience that will make people want to come back.
The first step is to find out what customers want from you. Talk to them and collect feedback through surveys and forms.
You should also monitor and track user behavior - segment your customers, observe how they behave on site or in-app, and identify common problems. By doing this, you can start to discover patterns amongst customer segments that help you identify how you should engage each customer and optimize their individual experience.
Maybe better customer service is needed, or certain features in your product are missing. Implementing these insights will go a long way in improving customer experience and getting them coming back for more.
Many businesses still focus only on acquiring new customers and they don’t realize the huge value that optimizing conversions through the customer journey can add.
When we talk about conversion rates it’s tempting to limit our discussion to the top of the funnel - that’s a mistake. You need people to take key actions at every stage in the customer lifecycle. You need to pay attention to how successful you are with users at each stage.
What steps are you taking to improve your conversions beyond the top-of-the-funnel?
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