How to Run a Successful Cohort Analysis to Enhance Customer Retention
So, you’re a business owner in today’s competitive world.
You’re looking to grow your customer base, and you’re always trying to find new markets. Having a second look at current customers might be one of the most efficient ways to do that. The main aim for many companies is to acquire new customers, but we should never forget those who helped us along the way.
Retention is everything these days. According to The Hubspot, retaining customers is five times cheaper than acquiring new ones. One of the best ways to retain your customers is through a well-executed marketing strategy, including marketing automation and customer relationship management (CRM).
We’re giving you the low down on one of the most effective retention strategies out there: customer cohorts. We’ll help you make sense of these customer groups and show you how to use them in your retention strategy. So grab yourself a pen and paper and a lovely hot cuppa, too. It’s time for reading, writing, and learning. Let’s begin!
What Is Cohort Analysis?
In the marketing world, a cohort analysis is used to show how different market segments perform over a predefined period of time. In other words, it’s a way to analyze user behavior and performance as groups. By looking at two or more cohorts, you can identify many key metrics, such as activation rate and retention rate.
Let’s say you’re a software company providing tech to streamline remote call center management. At the end of a particular month, you have acquired 100 customers. You can then split these into two cohorts: 50 customers who all signed up within the first week and 50 who signed up towards the second half of the month.
By doing this, you can compare the behavior of each group and use it to understand user behavior. If your customers who signed up in the first week had a higher activation rate than the second cohort, then you know for sure that acquiring customers early in the month is more effective.
How to Run a Successful Cohort Analysis
Be Specific About Your Cohorts
You can split up all of your customers into different groups, but you should be focusing on a single metric at a time. For example, if you’re looking to improve retention rates, focus on that in one report.
If you’re a company that holds a weekly web conference to advertise your services to businesses, you could create a cohort of “weekly web conference attendees” and measure the increase in retention rates throughout the week.
Alternatively, if you wanted to measure your shopping cart abandonment rate, you could create a cohort based on “customers who added an item or items to their cart before 3 pm” and measure how shopping cart abandonment rates change over time.
Build a Strong Foundation
Diving straight into the cohort analysis without knowing what you’re looking for is unhelpful, risky even. Spending time, in the beginning, to find out where your customers are coming from and when they joined can really help when creating cohorts in later reports.
Let’s say you want to see a higher retention rate on your guided selling platform on your ecommerce store. Make a plan. You’re likely to need to know how many customers joined each site and when the first order was placed on each platform. This way, you can create a cohort based on a common point in time, such as when they all joined or the date of their first purchase.
Focus on Retention
While cohort analysis can provide valuable information, it is most useful when thinking about retention. Make sure that you not only look at the numbers but also try and understand why they occurred and how these customers compare to others.
For example, if you’re a cloud based communications company, you might find that people are more engaged on a Thursday than on a Friday. You’ll want to consider why this is. Maybe it’s because you send more promotional material on Thursdays, or perhaps it’s because your support team is more responsive on this day of the week. This will help you to better target your customers and improve retention.
How Does Cohort Analysis Improve Customer Retention?
Now you know what a cohort analysis is, it’s time to look at the results. There are two main ways that a successful cohort analysis can help improve customer retention:
Higher Churn Rate for New Customers
One of the most important metrics you should consider when doing a cohort analysis is your churn rate. Put simply, a churn rate is the percentage of customers who have left your company for a particular period.
For example, if you acquire 100 customers in a given month and then 30 left within that same period, then your churn rate is 30%. A high churn rate can be very costly to a business as you’re constantly spending money on new marketing campaigns while also losing revenue from customers who leave.
A way to keep your churn rate low is to use cohort reports. These show you the churn rate of each group of customers during a certain time period, which can be particularly helpful when looking at monthly or quarterly comparisons. You can then work on strategies to increase revenue and brand loyalty.
Customers Become Less Engaged Over Time
Another common goal for doing a cohort analysis is to improve engagement rates by looking at how they vary over time. Essentially, you want to keep customers engaged with your business as long as possible so they will be more likely to buy from you again and recommend your product/service to a friend.
To do this, you can look at how your engagement levels change over time. This could be measured in terms of subscriber activity, such as logins and posts, or it could be the number of shares and clicks for a social media campaign.
Takeaway
Successful cohort analysis can be very helpful in identifying and understanding the needs and behaviors of your customers. This makes it easier for you to create effective retention strategies that will help to reduce churn rates while also increasing engagement levels.
It’s important, however, to understand what this data is telling you and how you can use it to inform your strategy before you start making any decisions. If you do this, you’re more likely to be successful with your cohort analysis and achieve the results you want!
Good luck and happy analyzing!
Jenna Bunnell – Senior Manager, Content Marketing, DialpadJenna Bunnell is the Senior Manager for Content Marketing at Dialpad, an AI-incorporated cloud-hosted unified communications system that provides valuable call details for business owners and sales representatives. She is driven and passionate about communicating a brand’s design sensibility and visualizing how content can be presented in creative and comprehensive ways. She has written for sites like CrocoBlock and LuckyOrange. Check out her LinkedIn profile
9 Hidden Marketing Strategies to Instantly Boost Your Enterprise Sales
Running an enterprise business is an incredibly competitive trade that is constantly growing. New businesses are constantly emerging so competition will always exist. Therefore it’s important to do everything you can to stay at the top of your game.
If you’re getting all the traffic but no sales, something has clearly gone wrong.
It’s evident that more sales mean more income for your company. However, you need to ensure that you are using the finest marketing strategies to guarantee those sales.
Top-class marketing strategies are essential for improving your reach and scaling your business. Without them, your company may plateau and become obsolete.
This guide aims to make life easier for you when it comes to assessing why marketing methods to use to get the most benefits.
Here are 9 marketing strategies to help you grow your business and instantly boost your enterprise sales:
Offer incentives
The main aim of running an enterprise business is to receive regular orders from retailers. But, many retailers may be reluctant to continue giving you their custom if they don’t get anything in return. This is known as reciprocity marketing.
Incentives are benefits that are presented to retailers to encourage them to complete a task and continue purchasing your products or services.
For example, offering a referral incentive would urge retailers that regularly order from you to recommend your services to other retailers. If any of those retailers purchase something from you, the referee receives a reward such as free delivery or a discount on goods.
Promote limited offers
Promoting offers online is the best way to make them known. With over 86% of the global population now online, your posts won’t go missed. And if there’s a chance someone could miss out on a limited sale or product launch, they would jump on it straight away and make the purchase.
The same goes for retailers.
This will result in a drive in sales and the potential to gain regular custom. So, do some research to find out what your retailers really want and learn how to use reciprocity marketing to boost sales.
Promoting limited offers and discounts will ignite that fear of missing out inside your retailers and prompt them to make their purchase now rather than later.
This is a useful way to eradicate any hesitance retailers may have when it comes to placing an order with you. If they realize that they only have two hours left to secure a good deal on a product, they will certainly click that ‘pay now’ button.
Prioritize customer service
This may seem obvious, but some organizations don’t realize the importance of keeping their customers happy.
Word of mouth marketing is a good example of an extremely useful strategy; however, it is only possible if your existing retailers trust in your service and feel that you are reliable enough to recommend to others. If they trust in you, this can increase your conversion rate and boost your reputation.
To increase the quality of your service, try to be as attentive towards your retailers as you possibly can. Showing them how much they mean to your business will make them feel valued and they won’t hesitate to share this experience with other retailers.
You can also invest in improving the customer experience with your online platforms, and ordering processes. Making all interactions with your company as seamless as possible will ensure your retailers are always satisfied. This may require updating your system or incorporating AI for sales.
Doing this will not only enhance your sales figures, but it will also improve your retention rates.
Invest in SEO content
This strategy is especially important for securing purchases from new retailers.
A strong SEO strategy is crucial for getting your products and services out into the world, and it’s also important to incorporate it into your omnichannel marketing strategy. This will ensure your website and social media platforms are optimized to show on related internet searches.
This is essential for running a successful business as it will push your company’s online presence towards retailers looking for solutions you could potentially provide.
For example, let’s say a law firm in today’s society of remote working wants to optimize its content and include the phrase ‘virtual law’ in their next blog post. Whenever someone searches for that phrase, the law firm will show in the suggestions.
This is a useful method for increasing your reach which will inevitably increase your sales.
Attend trade shows
Attending (and actively participating) in trade shows is a very effective method for spreading awareness for your brand and increasing sales.
Trade shows are essentially meet-ups for enterprise and retailers (buyers and sellers), and they allow you to pitch your services directly to your target retailer. It would seem ridiculous not to take full advantage of these opportunities when they’re within your grasp.
By securing your place in a busy location and in an efficient time slot, you can boost your sales massively in very little time.
Send out free samples
Sending out free product samples is a practical way of getting your brand out there and showing potential customers the quality products they are missing out on.
By providing free product samples, you will draw retailers’ attention to items they may not have previously known existed. This will allow retailers to try before they buy and can also help boost their trust in your business.
You will also be helping retailers as they can gauge how popular certain items will be with their customers before making a purchase.
You can even customize the samples to promote your newest or most popular products. This would help you boost sales in specific areas of your business.
Collaborate with social media influencers/celebrities
This is an incredibly useful marketing strategy that has gained traction over the last few years. It has been shown that 27% of shoppers in the Middle East have been influenced to buy a product following an endorsement from an influencer/celebrity. So it’s no wonder why most large enterprise are taking advantage of this marketing tactic.
Collaborating with popular celebrities or influencers can bring an immense level of interest to your brand and its products.
Members of the public are prone to purchasing products that are promoted by a public figure they admire, and retailers have no choice but to increase their stock levels to meet this demand. Consequently, if your products are in high demand from the public, retailers will be submitting orders left, right, and center.
Collaboration can take on many forms. From a paid promotion on the influencer’s online platform to a televised advertisement featuring a relevant celebrity. Any type of partnership (such as high ticket affiliate programs) will aid in growing your organization’s popularity and increasing sales figures.
Get listed on industry directories
Securing your place on industry directories is one of the most valuable marketing strategies on increasing brand awareness and boosting sales.
By featuring on these directories, you will be making your business known to many professionals in your industry. All important details such as contact details and business purposes will be featured on the list to give readers all the information they require.
This is an easy strategy as it will continue to work while you focus on other marketing details. The list will always be available so you don’t have to worry about amending it unless any important business details change.
This will make it easy for retailers to locate your company and place an order at any time.
Depending on the directory, this strategy can also be one of the most effortless ways to save money for your business.
Create an email list
Setting up an email list is an often undervalued marketing strategy however, it can help increase enterprise sales hugely.
Sending regular emails to your existing retailers is a practical way of keeping them updated on available products, offers, and events. For example, if you’re attending an upcoming trade show, make relevant retailers aware of this.
Emails can be customized to suit the recipient to make them feel valued. This will result in a much better reaction than generic, bulk emails that are almost instantly detailed.
If you are hosting a regional offer you can filter which retailers receive certain emails. Let’s say you are promoting a limited offer that ends at a specific time. You can send customized emails to all retailers to ensure time differences are taken into account. For instance, all emails linked to .au domains will show a different end time for the limited offer than those linked to .qa domains.
By sending emails to launch new products or promote existing items, you will make it easy for retailers to make a purchase.
The bottom line
The above nine marketing strategies are extremely useful for boosting enterprise sales and increasing awareness for your brand.
Running an enterprise business can be extremely rewarding. However, it requires a great deal of time and preparation. This article is here to help you by providing all answers you may have on increasing sales through marketing strategies.
Although all of these suggestions may not be applicable to your company, take what you need and reap the benefits. Whether you decide to launch a paid partnership with a well-known celebrity or attend your first trade show, your sales figures will be sure to rise in no time.
-Grace Lau is the Director of Growth Content at Dialpad small business phone services, an AI-powered cloud communication platform for better and easier team collaboration. She has over 10 years of experience in content writing and strategy. Currently, she is responsible for leading branded and editorial content strategies, partnering with SEO and Ops teams to build and nurture content. Here is her LinkedIn
10 Practical Tips to Drastically Reduce Shopping Cart Abandonment Rate
Shopping cart abandonment is one of the most frustrating problems in ecommerce. It means you’re doing almost everything right. But at the last minute, you’ve missed out on an interested customer. With around 76% of carts in the Middle East being abandoned before checkout, what could be going wrong?
Online shopping cart abandonment can be caused by a range of things, but luckily there are plenty of ways to tackle the problem. Let’s look at ten practical tips you can employ very quickly.
1. Improve shipping
According to the Baymard Institute, the number one cause of cart abandonment is extra costs (and that often means shipping!).
Many retailers avoid being upfront about shipping costs, hoping to slip them in at the checkout stage as if they’re an afterthought. Unfortunately, this tends to have the opposite effect to it’s intent – customers notice, and often leave.
One way to avoid this is to make your shipping costs clear earlier in the purchase journey. However, this alone may not increase successful conversions. Price-sensitive customers who would have abandoned their cart are instead likely to abandon the purchase at the browsing stage.
Getting your customer the most attractive shipping cost should be central to your ecommerce pricing strategies. Negotiate with your carriers and see if you can provide a flat cost. Alternatively, use tiered pricing or provide free shipping above a certain order value.
2. Use your returns policy as a selling point
One reason your customers abandon their cart is that they’re almost sure they want the product but they’re not sure about your returns policy.
Luckily, this is an easy fix. Make sure your returns policy is easy to find, and easy to understand. It should be so good that it becomes a selling point, and your customers should know about it at the start of the checkout procedure – maybe even during their initial browsing. Display it prominently across your site, from the product page to the confirmation email.
If a customer has any doubt in their mind about buying, a clear returns policy removes it as an obstacle to purchasing.
3. Tell them your USP
Often, people abandon their shopping carts to compare your competitors’ offerings to your own. You can prevent this by emphasizing your unique selling point (USP) at every stage of the purchase journey.
Review your product photography/imagery, A/B test your product page’s layout or optimize product feed text ads to make your USP as prominent as you can. You might be emphasizing what makes your product unique. Alternatively, if you’re selling a similar product to your competitors, emphasize what makes your service unique. Maybe you offer very good shipping rates, or a uniquely good returns policy.
Your USP shouldn’t just be prominent on your website. Make sure everyone in your sales, marketing, and customer support teams know your USP by heart. By making it prominent across the whole purchase journey, you can make your competition irrelevant in the mind of the customer long before they’ve reached the checkout.
4. Employ live chat
Your customers might abandon their shopping carts because there’s an aspect of the product, shipping, or return policy they’re not sure about. If the customer has a question like this, it could prevent them from ordering. You want to be able to answer those questions in an instant.
Providing a live chat service on your site is a great way to address these questions. This could be a text chat window, voice chat, or free video calls. If you can’t have someone online 24/7, implement a chatbot that can answer questions or refer customers to your email.
Talking directly to your customers is also a great way to gather data on their concerns. If you keep hearing the same issues, make the answers to those questions clear on the product page or add them to your FAQ page. You could even add that information to your chatbot so it can answer the customer directly.
5. Remove distractions
In the world of online shopping, attention spans are short. According to CrazyEgg, a one-second delay in loading means 7% less conversions (not to mention the 16% decrease in customer satisfaction). It’s not just load speed that counts, however.
If your site is cluttered or asks too much of the customer, they might get distracted and abandon their cart.
Test your purchase journey from browsing to purchase and look for distractions. If you’re offering a lot of special offers, pop-ups, or upselling in your purchase journey, consider removing one of them in an A/B test. You want the journey from browsing to purchase to be as fast and easy as possible.
Consider the example of Stripe, the global payments provider who arrived in the Middle East in 2021. When Stripe asks for a customer’s credit card information, they don’t ask for their address. They only ask for a postcode, which they can use to work out the address. They don’t ask the customer to select their credit card provider, because this information is encoded in the credit card number.
Each step automated by Stripe is a step less for the customer to do – and the easier a purchase is, the more likely it is to happen.
Consider how much effort you ask of your customer in the purchase journey, and think creatively about how much of that you can remove. Many Shopify themes are built with simplicity in mind, but you can customize them to improve your customer journey.
6. Use reviews or testimonials
If your customer is having second thoughts about your product and abandoning their cart, it might be because they don’t have enough social proof. In a B2C context, you might encourage customer reviews on your site. This allows browsers to see how other customers have liked your products after purchase.
If you’re selling a B2B product or service, like work force management solutions or cloud storage, then your customers will be making more considered decisions about purchasing from your site. This gives you the opportunity to provide more in-depth social proof such as case studies and testimonials. Make a habit of collecting these from your clients,and keep track of this in a CRM or project management system such as Salesforce, a Bitrix24 alternative, or Asana.
7. Make it easy to change orders
One common point of frustration for online shoppers is changing their orders at the last minute. If your customer decides they want another item, just before they’re about to click “Buy”, sites often aren’t designed to make it easy to change this order. This isn’t good for your customer experience, and it leads to cart abandonment.
If your customer has to cancel their current purchase or go back to your main site to amend their order, they’ve just abandoned their cart. Whether they come back is out of your control.
Can your customers change their order within the checkout procedure? At the very least, they should be able to change the number of items they’re ordering. If your product comes with accessories or optional add-ons, make it easy for the customer to add these deep into the checkout process.
If your customer is in the checkout they’re obviously ready to buy, so this is a good time to make a last-minute sale on top of what they’re already ordering.
8. Offer payment options
It’s become more and more common for online retailers to provide flexible payment offers. In late 2021, “buy now, pay later” solutions are almost standard for high-ticket items where price might put a customer off.
You should also offer as many payment methods as you can, from bank transfer, to credit card, to speedy solutions like Apple Pay, Union Pay International or mada. If your customer doesn’t have their credit card to hand, the delay this causes could lead to them abandoning their shopping cart.
9. Make it urgent
Give your customers a reason to buy here and now. If you’re selling a similar product as your competitors, you only have outstanding service to compete on. As we’ve mentioned, price-sensitive customers will think of comparing your offering to competitors. Make sure your product pages highlight the benefits of shopping from you.
That could be anything from your excellent returns policy, your low shipping costs, or your flexible payment options. It’s also worth considering limited-time offers. These can either happen via a pop-up at checkout or in a follow-up email (more of those in a moment).
10. Use marketing tactics
There are lots of marketing tips to reduce shopping cart abandonment outside of your website. Three key tactics are:
Retargeting
Platforms like Facebook and Google make it easy for you to deliver ads to people who have visited your site already. Consider delivering adverts to customers who have abandoned their shopping carts. This is a proven tactic for bringing customers back to finish the purchase.
This can have a great return on ad spend (ROAS) if you employ performance marketing. What is performance marketing? It’s when your advertising partners or affiliates get paid when an agreed-upon action is taken. This could be a clickthrough or a successful conversion. This allows you to cast a wide net without breaking the bank.
Exit pop-up
If your customer is at the checkout and about to click to another page on your site – or another window entirely! – an exit-intent pop-up can help. Your pop-up could do anything from offering a limited-time discount to asking for the customer’s email. This could convince the customer to complete the purchase then and there, or give you a chance to send a follow-up email.
Follow-up emails
A personalized follow-up email can help get customers back to complete their purchases. Include the customer’s name if you have it, and make sure it’s based on their browsing history.
If you’re not just emailing to remind them of their abandoned purchase, tailor the email to the product category they abandoned. Offer your customer a clear method to contact you directly. This allows you to answer any questions that might have prevented them from buying.
Try new things
One or all of these ten tips could drastically reduce your shopping cart abandonment rate. A lot of these tips will benefit all of your customers as an additional benefit, so it’s worth taking the time to A/B test anything that looks like it would suit your business. Who knows – the results may surprise you!
-Jessica Day is the Senior Director for Marketing Strategy at Dialpad, a modern business communications platform with A2P SMS that takes every kind of conversation to the next level—turning conversations into opportunities. Jessica is an expert in collaborating with multifunctional teams to execute and optimize marketing efforts, for both company and client campaigns. Here is her LinkedIn
