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Why Is My ROI on Innovation as Elusive as Bigfoot?
07.07.2023
Thinking
A Guide to How to Find the Beast
Ever felt like your return-on-investment (ROI) on innovation is playing a never-ending game of hide-and-seek?
Maybe it’s even harder to find- like Bigfoot. Feels like a legend that only a lucky few have seen.
And you’re strongly suspicious they’re all fibbing. They have to be!
Maybe every time you hear “boosting your ROI” you want to scream into a pillow in frustration. We don’t blame you. It’s soul-destroying pouring money into something that SHOULD be working, but isn’t.
So we thought it might be helpful to go through why you’re missing ROI on innovation, and some tips to finally find and tame that beast!
The Mystery Behind No ROI on Innovation: Bigfoot’s Secrets Revealed
So why are your innovative efforts not yielding big old heaps of cash?
There are lots of possibilities. Here are a few of the most common:
Misaligned goals
Does it feel like your innovation lacks focus? Have your priorities somehow been along the way?
And whose goal is it anyway – the business’s or the customers’? Does one compete against the other?
You don’t set out to find Bigfoot without knowing which forest he’s hiding in. That destination has to be lined up before you can figure out how to get there.
Lack of collaboration
Be honest – come on, now – how many silos does your company have?
Even the people in your office who can’t stand the sight of each other need to be able to share information. Innovation only succeeds where ideas are freely exchanged.
Teams have to work together. Imagine going after Bigfoot with a documentary team and no one has spoken to each other till you all meet for the search. Chaos ensues.
Inadequate measurement
Are you tracking the wrong metrics or using outdated methods to evaluate your efforts?
Look, when your innovation ain’t doing great, you probably would rather put your thumbs in a torture vice than look at the actual numbers. It’s hard. It’s wincy. It feels like “failure” right in your face (we don’t think anything is failure as long as we learn from it).
You have to measure the impact of innovation to understand your ROI. Otherwise, it’s like trying to capture Bigfoot using a Polaroid camera and a kids’ butterfly net—not gonna happen.
Asking the wrong questions
Do your innovations match what your customers want or need?
Sometimes companies don’t ask the right questions before they start- they just plunge into the idea without figuring out the parameters or fine details.
Innovation is always about solving a problem, even problems that will be important in the next year, three years, or five years. You’re not capturing anything about Bigfoot unless you have the right gear, and you won’t have the right gear if you don’t ask the right questions.
The Soul-Searching Questions You Should Be Asking: Bigfoot Edition
Speaking of asking the right questions, it’s time to rip off the proverbial bandaid and ask yourself some crucial questions (along the issues above) about your innovation programme:
1. Is my company culture conducive to innovation?
Everyone thinks they’re all about innovation but that’s not the case. If you want good innovation, you must give your people the TIME and RESOURCES they need to problem-solve.
2. Am I listening to (and actioning) my customers’ feedback?
Sometimes it’s frustrating having to listen to your customers. Especially when they change their minds, don’t know what they want, or are tempted away by your competition. But they do give insights into areas where your products or services could be improved.
3. Am I doing enough research on competitors?
Figuring out where your competition is awful is probably more helpful than where they’re doing well. Customer reviews, message boards, and social media account comment sections are GOLDMINES for information on what your competitors’ customers need. And they’re free!
4. Am I learning from past mistakes?
It’s such a cliche, but it’s true. The thing is, very few people do it. Mistakes are amazing learning opportunities, but only if you’re willing to do the deed and acknowledge them. Look at the missteps and patterns of your past actions.
5. Are we actually getting the products out there?
If your innovative products or services never make it to the right market, you’ll never see an ROI. Make sure you have a good plan in place for launching and promoting your innovations.
The Action Plan: How to Make Innovation Better and Boost Your ROI (Bigfoot-Style)
So, with all these questions probably circulating in your head, it’s time to take action.
That ROI has been wandering the forest enough. It’s been hiding. Other people have been bragging about it and it’s time to take control and find it once and for all.
Though each business has its own circumstances, and you have a lot of choice, there are some basic steps you can take to make your innovation better and find that elusive ROI:
Establish clear innovation objectives:
Your plan needs specific, measurable goals that align with your overall business objectives.
Foster a culture of collaboration:
Break down departmental silos, offer cross-functional training, and do team-building activities. Make sure your innovators are creative problem-solvers who have the time to play with ideas. It’s not something that can be done crammed into 1-3 hours a week.
Implement a robust measurement system:
Don’t ignore those KPIs – look at revenue growth and cost savings, operational metrics (like process efficiency or time-to-market), and qualitative measures (customer satisfaction or employee engagement).
Continuously iterate and improve:
Innovation is an ongoing process that involves constant research, tests, experiments, etc. Keep going, keep trying, and take risks. Unconventional can be good, even in a conventional industry.
Consider a collaboration with a complimentary business:
Partnering with a trusted, complimentary business helps you pool resources, expand your reach, and drive innovation. Collaborate on new product development or share industry insights.
Be creative with getting the word out:
Promote your innovative products and services using a variety of channels, such as social media, content marketing, and events. Engage customers and partners who love your brand to help build buzz and drive interest.
Broaden how you decide to innovate:
Why focus just on developing new products? Maybe new applications for your existing offerings is a better move. This can cut down on investment and start bumping up the return.
No one said that good ROI on innovation was going to be easy. It’s an elusive thing.
But you’re not alone.
By asking yourself the right questions, addressing the underlying issues, and taking actionable steps to make innovation better, you can unlock the full potential of your efforts and finally achieve that sought-after ROI.
So, channel your inner Bigfoot hunter, unravel the mystery of your missing ROI, and make innovation the driving force behind your business success.
Get that proverbial Bigfoot, film it, and show the world that you’re capable of!Ready to streamline your processes, reduce errors, automate your subscription management operations, and finally focus on your customers?
Let’s chat further.
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Related blog articles.
19.12.2024
Customer Insight
How To Give Your Subscription Customers the Autonomy They Want
Most subscription customers love control. Autonomy goes one step further, giving customers access to their subscriptions when they want it. Autonomy, in the form of self-serve portals, boosts customer satisfaction, while saving you time and resources. This article explores how it all works, and what you need to give customers the choice they want. In this article: What is Subscription Customer Autonomy? What Happens Without Subscription Customer Autonomy Why Don’t Subscription Retailers Give Their Customers the Option of Autonomy? Subscription Customer Autonomy- What’s In It For a Retailer? Customer Autonomy- What Do You Need To Give It? How to Get it All Done, Fast There’s no doubt about it - the retailers with the best customer experience tend to do better. This is especially true with subscription customers because they have a longer relationship instead of the interaction that comes from usual one-off purchases. One of the emerging trends in subscription retail is the idea of autonomy. That’s giving customers the power to manage their own subscriptions on the terms that suit them best. It’s one of the easiest ways to keep them happy. But many retailers don’t provide this level of experience. Whatever their reason for doing so, that’s good news for you. If your retail business offers autonomy, you’ll attract new customers from your competition. This article will explore all things autonomy, from what it involves, how it impacts customers and businesses, and what you will need as a subscription retailer to boost your customer success by giving them autonomy. What is Subscription Customer Autonomy? Autonomy is simply a high level of control that customers can enjoy over their subscriptions. This allows them to independently create subscriptions that best meet their needs at any given time. As a customer, when you walk into a shop or grocery store, you’re not generally looking for intervention. You know what you want, you grab your basket, get what you need, pay, and get out. It’s quick, and it’s done. Your customers might want the same experience. That doesn’t mean you never give any help, guidance, or intervention! But it’s up to them as the subscriber to decide, instead of you. So what aspects of the subscription package does autonomy cover? Renewals: When customers have control over when their subscriptions renew (instead of a surprise auto-renewal), this gives them time to financially plan and make any adjustments in subscription packages that meet their current budget. Add-ons and cross-sells: Customers’ needs change all the time. So do their wants. If they have to wait to be offered them, they might go somewhere else. But if they can access additional goodies 24-7, they’re far more likely to buy them. Payment terms: It’s a sensitive subject. Customers don’t want to be on hold before they discuss circumstances or situations. They also don’t want to have a nightmare paying for their subscriptions. They should be able to decide and change terms like payment frequency and enjoy flexibility like skipping a payment if it’s needed. Pausing: Customers love the pause option. And why not- life is unpredictable. Circumstances, needs, and decision-makers change. Letting customers put everything on pause without losing out on their goods and usage stops them from churning to a competitor that offers them exactly what they need. Timing: It’s common for a retailer with more limited resources to make customers wait until someone from customer service or sales can get on the phone with them to talk through options. That’s not sustainable long-term, especially if your customer lives far away. People need to be able to get what they need in the time that they have. Packaging: Sometimes customers want something different. If they notice new packages, new products, or new pricing, they might find it more desirable. Making them wait till the end of a contract (especially in the case of them paying more than a different plan would require) makes them vulnerable to churn. Options show the customer that you’re here to meet their needs. It also builds loyalty and trust. What happens to retailers who can’t or won’t give customers what they want? What Happens Without Subscription Customer Autonomy? There are undeniable impacts when customers have no autonomy over their subscriptions. Here are some of the most common we’ve seen in our customers before they got help: Churn: A subscription retailer’s worst enemy. Churn rate is already high, so anything that makes it worse can leave you very vulnerable. When customers feel stuck in a plan that costs too much, is a pain, or doesn’t meet their needs they get frustrated and leave. Why would they stay if competitors offer control and flexibility? Bad brand reputation: Guarding a reputation is important. Customers will tell their friends, family, and people on reviews or message boards about any inflexibility and control issues your brand has. It can be hard to get a good reputation back. Missed revenue opportunities: When customers can buy what they want when they want it, they’re far more likely to…buy. And not go to your competition. If they have to wait, or can’t get what they want, that’s a missed opportunity for more money coming in. More resources and delays: When customers must wait for your business to help them with their contracts, that means your teams have to give their time. That’s less time for something else. It can also burden teams and create a backlog filled with delays. You’re saddled with higher operational costs, long wait times, and frustrated workers and customers. All these factors can damage a business. Suffering more than one can put your business’ health at risk. And the saddest thing is that in all this, the customer likely wanted to stay. The circumstances just made it too difficult, inconvenient, or expensive. This begs one big question… Why Don’t Subscription Retailers Give Their Customers the Option of Autonomy? Most of the time, retailers who deny their subscription customers autonomy don’t do it just for the sake of it. There are often obstacles that get in the way. Creating a system that enables customer autonomy (especially the kind 24-7, and allows for changes in pricing, terms, etc.) must be efficient and reliable. After all, it connects all the teams from customer service, sales, finance, and fulfillment. Retailers could be worried about how that could cost them. And sometimes the customer is not always right. Retailers might have concerns that customers don’t know their own needs, or how upgrades and term changes work. If they make mistakes, that can cause a lot of trouble and disrupt service and revenue. Some retailers have outdated tech that would simply not allow for information integration between teams. It may not be sophisticated enough to enable the creation of customer portals. Upgrades might seem time-consuming and disruptive, which could make a retail business struggle even more. Of course, sometimes decision-makers in the retail business might simply fear change. Autonomy goes again the way it’s been done. It might need a cultural shift. It might be hard to implement. And the last reason we see frequently is a simple lack of knowledge of autonomy. Retailers might not be aware of the existence or importance of autonomy and just rely on customer service to do all the heavy lifting. They also might not understand its impacts. Fortunately, all these problems aren’t permanent. Retailers just need to know what they have to gain from customer autonomy. Subscription Customer Autonomy - What’s In It For a Retailer? Now you know what it can cost you to not give your subscription customers a level of autonomy. But what do you have to gain? Cut costs: When customers take care of subscription management admin themselves, that means fewer queries for customer service to have to handle. No chasing answers from sales or finance. That means lower operational costs, and your teams are free to concentrate on higher-value work. Better customer loyalty: When customers trust you (and vice versa), they feel more empowered. They keep control, avoid nasty surprises and charges, and know that you’re on their side. They’re far more likely to stay, which cuts churn. More money coming in: Customers who can change, add to, or upgrade their subscriptions themselves are far more likely to buy them because they can. When you add flexible payments and methods that suit their needs, you have a lot more inbound revenue that you wouldn’t have otherwise. Better brand position and reputation: Most subscription retailers do not offer customer autonomy. That means you’ll have an automotive advantage because you’re giving customers choice, power, and trust. And that can only benefit your brand reputation and positioning as you attract new customers and strengthen your existing customer relationship. Everyone wins. Happier staff: Once your subscription customers have the power to manage their subscriptions, that takes so much pressure off your teams. They have fewer routine tasks. They don’t have the pressure of a stack of repetitive messages asking for information. That means they can focus more on what they love - the high-value work they were hired to do in the first place. If these benefits sound tempting to you, where do you as a subscription retailer begin? Customer Autonomy - What Do You Need To Give It? To successfully offer customer autonomy, subscription retailers need to implement several key components: Create a navigation-friendly interface: Customers can only experience and enjoy autonomy with a site that’s logical and easy to navigate. This means your site needs to be accessible, with clear instructions and intuitive dashboards. Dedicate a self-service portal: Self-service portals are the way to go. They allow for adjustments, changes, payment methods, upgrading, downgrading, and product viewing history. Special bonuses for automated offers that are plugged into their needs. Secure and reliable payments: Customers need to know that payments are secure and incorporate the payment method that works best for them. When you provide flexibility in subscription pricing, fees, and payments, you’ll keep them on-side. Support where and when they need it: Of course, when customers experience autonomy, they still might need a little support. They might have a question that needs to be answered. That’s why real-time support including bot-driven chats, videos, FAQs, etc. can help answer questions and give guidance before there’s an issue. Personalization: This is absolutely essential for subscription customers. Your customers expect it, and many of your competitors offer it. Personalization shapes an excellent customer experience. Your business can then make specific recommendations and offers, as well as give a tailored CX that suits individual needs. Your customers feel valued, and are more likely to boost their upgrades, add-ons, and cross-sells. You might be thinking, “These are great, but my resources are already stretched. How can I deliver what the customer wants, when I don’t have the time or resources to do it?” Fortunately, there’s something that can do it all for you. How to Get it All Done, Fast There’s no point in pushing yourself and your people to the limit if you don’t have to. Not when there’s a solution that does everything for you. The right automated subscription software can bring you the platform you need to give your subscription customers the autonomy they want. And it cuts down on your overheads while boosting revenue while delivering MORE than just customer autonomy. In other words, you get bonus goodness. It can automate tasks like: Managing the self-service portal including automatically adjusting customer subscription changes in packaging, pricing, terms, etc. Creating a real-time free flow of information between customer service, finance, sales, and marketing so nothing gets lost between the cracks. Cuts delays in information (no more chasing!) Invoice creation, reminders, etc. With no more human errors. Creating personalized offerings and pricing plans, offering them at the right time Spotting when customers are at risk of leaving Payment collection and ledger reconciliation Adherence to compliance issues and regulations Think of how much time and effort automating these tasks would save you and your teams. You get lower operational costs. You get more revenue coming in. And the best bit is that this platform scales. You can grow as fast as you want, with no additional burden on your business. Conclusion The bottom line is that automation is not just about giving the customer the autonomy they want. It’s giving you back your time, cutting your costs, and positioning your business in the best place possible. Don’t risk keeping your customers in a place where they leave, unsatisfied. Be known and rewarded for giving them what they want. Have any more questions? Book a free Discovery Call with our team today.
17.12.2024
Retail
Retail Subscriptions: Why Pricing is Everything
Customers love retail subscriptions. But subscriptions are only popular when they offer the prices that customers want. This article is an in-depth look at the appeal of subscriptions to retailers, subscription pricing models, and how personalization can help retailers give their customers the packages they want. It also reveals the best kind of technology that delivers all the ingredients needed to get subscriptions right. In this article: Subscriptions in Retail - Why Do People Love Them? Types of Pricing Models Where Bad Decisions Hit the Hardest Plot Twist - A Personalized Pricing Model is the Way One Solution for Everything Retail subscriptions are extremely popular with customers. But only if the price is right. There’s a lot of pressure to choose the best pricing models for the subscriptions. Make the wrong decision, and you could lose customers (and revenue) for good. But the right pricing strategy will keep the customers you have, attract new ones, and boost your profits. If you’re a retailer with subscription plans or you are considering offering subscriptions, read on to discover what kinds of pricing will work for you, and how you can enjoy the benefits the best pricing models can bring your business. Subscriptions in Retail - Why Do People Love Them? When done right, customers and retail businesses love subscriptions. Here’s why: Convenience: Subscriptions give consumers an easy way to get products they want and need when they need it. No more repeat purchasing decisions. No more inconvenient trips to the store. Customer loyalty: Subscriptions require a long-term retailer/customer relationship. There’s ample opportunity to build loyalty to your brand and cut churn. Differentiation: Subscription differentiate your brand from competitors by giving your customers a unique experience. Predictable revenue: One-off purchases give no stability. However a steady and predictable revenue stream provides a great foundation for better financial planning and stability. Subscription businesses have grown 4.6 times faster over the past decade compared to the S&P 500. (SaaS) sector outperformed other SEI sectors in between 2022-2023, with 12.3% revenue growth on average. Subscriptions work across most retail sectors. Even for retail businesses that have large, single-purchase products (like cars, boats, industrial farm equipment, etc.) retailers have found creative ways to incorporate subscriptions, including regular parts and servicing and add-on complimentary products. But no matter how creative the subscription offering, there’s one thing more important. Pricing. What type of pricing options does a retailer have? Types of Pricing Models There are plenty of choices that retailers can consider for their subscription service pricing: Fixed: This is the most common model. It involves offering a set price for each subscription over a certain time period. Though it’s easy to understand, it might not meet the needs of every customer. Usage-Based: Meant more for subscriptions involving consumption (like broadband or royalty-free music), this model charges customers based on their product usage. This generally works best for customers who have fairly consistent consumption rates. Tiered: This variety of pricing levels depends on which level of products and services appeal most to the customer. They choose a plan that suits their needs. The only drawback is that the terms of each plan can be more complex. Freemium: Subscription customers get a standard service of basics for free, and if they’re ready for more, they get premium features at a cost. Though this model attracts a wider customer base (which is great for general brand awareness), it can be challenging to convert them to paying users. Dynamic: Subscription prices change depending on availability, demand, etc. This is another model that can be more complex. It can be difficult to figure out which one is right for both the retailer and the customer. But manually choosing to price risks mistakes. There are so many variables to keep track of. It’s really not a place for guesswork. How is it possible to figure out the optimal price points that boost profitability and please customers? How long does it take to figure out whether your customers like your pricing? What happens when circumstances change and prices must be adjusted? How do you keep your sales team motivated when pricing models are wrong or have to change? On top of that, manually adjusting and updating the pricing and terms for each customer in your base is time-consuming and steals your labor resources. And when the pricing’s wrong, churn and missed opportunities get costly. The good news is that there’s one pricing model factor that doesn’t go wrong. Plot Twist - A Personalized Pricing Model is the Way Personalization can make any pricing model a lot more appealing. Customers both love and expect personalization across their experience, starting with pricing. This involves subscription plans tailored to incorporate their wants, needs, buying behavior, demographics, and segment. Personalized plans are hassle-free because they’re easy to understand. They save the customer from choice blindness. They offer value for money because the combination reflects who they are as a customer. Personalization works across the pricing models too. Here are some examples of how it could work: Tiered - A beauty subscription box company could base their tiers on past purchasing and preferences. A customer who primarily buys skincare could be offered a tier that includes premium and new, cutting-edge products. Usage-Based - Not only would a customer receive offers based on their usage patterns, but they could be offered exclusive product sessions or discounts for loyalty. Freemium - A software company could send a customer targeted promotions that complement how they use specific free features, enabling them to unlock a unique combination of advanced tools that meet their needs. Flat Rate - A meal kit delivery service could offer personalized add-ons based on the customer’s preferences, like special ingredients, or free desserts, or bonus portions for their favorite meals. Personalization makes a difference because it shows customers that the business pays attention to them and their needs. And they back that up with action. Now, this might sound great to you. But it also begs the question, “How do I get all of this done?” One solution can handle everything for you - the pricing model choices, the keeping track of subscriptions and terms, any last-minute changes, add-ons and upgrades, and all the personalization needed. One Solution for Everything It’s simply robust subscription management software. That’s all you need. It automates these tasks: Powered by AI, all customer data (including purchase history, behavior, demographics, location, and preferences) is tracked and analyzed in real-time. AI breaks it into segments, microsegments, and individuals so that each can be reached and nurtured throughout the entire lifetime of the relationship. On top of that, it spots and creates selling opportunities including renewals, add-ons, upgrades, and cross-selling. It tracks subscription term dates. It can create new offerings that complement customer needs and usage too. And it channels them at the right time. This brings in additional revenue that may have been missed otherwise. The solution offers automated responsiveness that makes pricing models flexible and agile to anticipate/react to changes in circumstances. It also collects and analyzes customer feedback to refine and improve pricing strategies over time. The right solution doesn’t just easily bring in subscription revenue. It saves countless hours and costs as well. It knocks down silos between marketing, sales, and finance, removing the hours wasted between teams chasing information on customers, products, usage, and contract terms. It automates the entire invoicing and payment process. That includes everything from billing cycles, payments, invoicing (without human errors), payment reminders, payment collection, and reconciliation. This includes automatically recognizing revenue. The data and analysis created the reports needed for audits, compliance (no matter where the location of your customers) and the most informed strategic financial decisions. It monitors performance and KPIs to make recommendations for change too. And it consolidates inventory management systems so that everything works together. Scaling isn’t a problem - no matter how fast you grow your customer base, operations automatically keep ticking away. Retailers that choose good solutions get all the benefits of the right subscription pricing models while saving time and resources. At Last, A Complex Solution Made Simple Important decisions are usually harder to make. However, the right software solution will make both the decision and implementation easier. All what’s left is a happy customer base and a reliable new revenue stream. Curious to see what the right solution could do for your retail business? Book a free Discovery Call with our team today.
11.12.2024
Retail
Retail Expansion from Bricks and Mortar to E-Commerce: What’s In It For You?
Retailers used to running physical stores can miss opportunities to sell and expand their business with E-Commerce. This article talks through the limitations of bricks-and-mortar, how E-Commerce can boost your business, and where to find the best retail E-Commerce help. In this article: Why Bricks and Mortar Isn't Enough for Retailers Anymore What E-Commerce Can Give Your Business How the Right Solution Can Crush Obstacles Easily The Impact of Bad Decisions on Subscription Retail SMBs The Secret to Good Decisions Is In Plain Sight AI-Driven Insights: How They Give You Everything You Need A well-designed brick-and-mortar retail space can bring a lot of joy. But it isn’t enough. Not these days. They’re not enough to meet the demands of modern customers or to expand your consumer base. If you want to expand, grow, and make your mark, it's important to consider offering online shopping. But as a retailer, adding an e-commerce strand and creating an online store might feel completely overwhelming. Where do you begin? We’re here to reassure you that the shift is not as daunting as you may think. You just need good information and the right tools to start bringing in all the benefits that e-commerce delivers. Why Bricks and Mortar Isn't Enough for Retailers Anymore Bricks-and-mortar stores do provide a shopping experience that many customers love. Around 94% of customers still shop in physical stores. However, the exclusive brick-and-mortar store does have real limitations. Reach: You’re stuck with customers in your general geographic location, which means you cut your business off from the global market. At least 52% of shoppers shop internationally. Costs: Physical stores demand high overhead costs, including everything from rent, heating/AC, security, staff, etc. rent, utilities, etc. 6 in 10 experts say an online store is cheaper to start, and 8 out of 10 says it’s cheaper to run, with 75% saying bricks and mortar doesn’t break even as quickly. Consumer Behavior and Preference: It’s a fact that online shopping grows each year. Online retail sales around the world have dramatically risen from $1.3 trillion in 2014 to $4.4 trillion in 2023, and by 2027, it’s expected to hit $8 trillion, accounting for nearly a quarter of total retail sales. Expanding your bricks and mortar store through E-Commerce will help you stay competitive. If you stay bricks-and-mortar only, you risk losing out to your competition because they will meet the customers where they are. What E-Commerce Can Give Your Business There are plenty of potential benefits of an online store. Here are a few of the most popular: Increased Reach and Accessibility - Not only will your brand be able to reach that global audience, but your products will be more accessible. And because your online store can run 24-7, your customers can buy what they want, when they want it. Scalability: You might be used to having to hire extra help to deal with much more seasonal demand, and those costs can add up. But growing your base (both temporarily and long-term) doesn’t necessarily stretch your resources in the same way. Most of the process is automated, and online fulfillment isn’t as costly as it is in-person (unless you're selling massive products, like ships). Customer Insights: It can be difficult, if not impossible, to get in-person customers to fill out surveys and give feedback. But online, this comes without any effort. You get detailed and valuable analytics from your customer data. This helps you understand what they like and their behavior much more. Personalization: Not only does data give you information on segments and opportunities, but you can personalize shopping experiences for your customers. This boosts conversion rates and meets expectations while boosting your revenue by up to 40%. These benefits are extremely tempting; every retailer could use each one of them. Of course, creating an online store can feel daunting. There are important factors that a retailer has to consider. A website has to be created (or expanded to accommodate E-Commerce). The site must contain an intuitive and user-friendly interface. It needs data and financial security for compliance and safety. Mobile optimization creates a great customer experience on the go. A rock-solid secure payment process brings you your cash. Stock management is a little different too. Because customers can purchase your products at any time, stock levels can change frequently. This can require real-time updates. Fulfillment and delivery logistics have to be fast and efficient. Rather than the 9-5 (or whatever your hours), customer service has to expand to 24-7 availability. Returns and exchange policies should be clear and easy for both parties. At first glance, it sounds like a massive effort. But it doesn’t have to be. Not with the right solution. How the Right Solution Can Crush Obstacles Easily When you get the right software, things get a lot easier. In fact, once the right solution is in place, you’re mostly to find you have more time to focus on the things you want to do. Like interacting with customers, thinking about the future of your brand, and creating the best strategies moving forward. It's the stuff you don’t have time to do because you’re stuck in permanent admin. You might be wondering how that’s possible, but software can ease not only the creation of an e-commerce strand, but it can take care of the obstacles for you: Financial management: Everything from correct billing to automated payments (using the payment platforms that customers love), reconciliation, reports, and audit preparation can be a cinch that saves lots of money and time. It also ensures a hassle-free experience for you and your customers. Inventory: Real-time inventory tracking that perfectly suits 24-7 shopping will help you avoid the dreaded stockouts and overstocks, which saves you money and customer alienation while protecting you from emergency supplier exploitation. Customer Relationship Management (CRM): These systems give you invaluable insight into your existing and potential customers by crunching the data. You’ll discover customer behavior across regions and countries, pricing variations, segmentation, product/add-on recommendations, and everything else you need to offer that personalized experience they expect and love. Security: It can bring you robust security measures, including legal compliance (no matter which region you sell in) including SSL certificates, and PCI compliance. Everything that protects customer data and builds trust. Conclusion A retail brand needs everything possible to build and differentiate its brand. Expanding from bricks and mortar to E-Commerce via an online store can give you the best of both worlds. All you need is the right solution to help you do it. Curious about how a solution could put you on the right path? Book a free Discovery Call with our team today.
10.12.2024
SaaS
The KPI Keys to the SaaS Kingdom
Growth is everything in the SaaS world. But how can a CEO know how impactful their growth strategies might be? Prioritizing four metrics in particular will empower tech CEOs to drive customer satisfaction and sustainable growth, driving insight on what is working and what needs to be adjusted. In this article: Growth is Everything The SaaS Playbook: Decoding Four Key Metrics to Ignite Success Recommendations to Make Things Easier For Yourself Customer Retention: The Key to Eliminating Churn and Building Growth SaaS is a tough game to win. And growth is at the center of it. You as a tech CEO must build, scale, and push your resourcefulness to the limit. Every gain comes from countless hours spent strategizing, analyzing, and figuring out what best works for your brand. CEOs must drive growth. But they often lack the tools they need to bring the results that are expected of them. That’s where KPIs come in. This article talks through what KPIs are, and how they can be used to harness growth in the short and long term. Growth is Everything As a tech CEO, you must build, scale, and push your resourcefulness to the limit. Every gain comes from countless hours spent strategizing, analyzing, and figuring out what best works for your brand. As a CEO you’re in charge of: Revenue growth and profitability while controlling costs Product development Market expansion and strategic partnerships Customer and employee satisfaction Regulatory compliance and data security Company valuation and funding But you face a lot of challenges: Scaling the business demands: How do you find and implement the right systems, people, and processes to grow, while ensuring costs are low? Outmaneuvering the competition: How do you differentiate your brand and products while innovating and staying relevant? Acquiring and retaining talent: How do you attract the best talent to keep your brand cutting-edge? Customer churn: How do you retain customers and prevent them from being poached by competitors? Security and compliance: How do you lock down your data, so you avoid financial penalties and loss of trust in you or the brand? Maintaining positive cash flow: How do you keep positive cash flow (even when scaling) so the company’s financial future isn’t at risk? Complexity in pricing strategy: How do you decide on competitive pricing that pleases customers and benefits the company? Adapting to market changes: How do you anticipate and adapt to changes, and not miss any opportunities? That’s a tall list of obstacles and responsibilities. It can be hard to get an accurate picture of what works, how quickly (or slowly) you’re growing, and which investments in the business bring the best results. That’s why KPIs are important. Measuring KPIs will give you the information you need on current metrics, what needs to change, and which is the biggest priority. The SaaS Playbook: Decoding Four Key Metrics to Ignite Success Four pivotal KPI signposts form the bedrock of your successful SaaS business model. Customer Churn Rate (CCR) CCR measures the percentage of customers who decide to drop your service in the middle or at the end of a subscription period. The higher the score, the more your bottom line is at risk. Formula: Lost Customers ÷ Total Customers at the Start of Time Period) x 100. There are multiple causes of churn: Bad pricing Payment processing or billing errors Lack of automation in subscription renewals. Inability to personalize the product offering Subscription or product dissatisfaction Poaching by competitors A poor UX Out-of-date offerings Currently, the average SaaS churn rate is 7.6% and a good churn rate is below 6% annually. Churn is costly because it costs you in two ways. First is the missing revenue from your churned customers. Second is the investment into customer acquisition (and reacquisition) required to make up for lost revenue. If your churn rate is too high, it can be turned around. With the right tools you can boost customer satisfaction, high product value, and customer loyalty. Revenue Churn Rate (RCR) Where CCR is about customer count, RCR is about the money count. Formula: Net Revenue Lost from Existing Customers ÷ Total Revenue The RCR is like a machine that monitors the financial vitals. Specifically, it’s the net revenue impact of lost customers either monthly or annually. When the RCR is low, that means you’re currently keeping customers happy. But when the RCR soars, it’s time to refocus and investigate your strategy to stop the leak. Revenue loss needs to be fixed fast because it also has a knock-on effect on growth potential, product innovation, and brand reputation. Customer Acquisition Cost (CAC) CAC is all about balance. The CAC analyzes the average sales versus the marketing cost involved in winning over a customer. This cost takes a lot into consideration, including everything from your social media to following through on sales leads. Formula: Customer Acquisition Cost = Cost of Sales and Marketing divided by the Number of New Customers Acquired. Spending a lot of money acquiring each customer can be worth it when it’s working and you see great results. If not, action has to be taken because a high CAC combined with a low CLTV (more on that in a second) will burn through your cash reserves. Though constantly monitoring your CAC can be stressful, it can be the wake-up call your business stakeholders need to finally give you the space to create and implement smart and cost-effective customer acquisition strategies. Customer Lifetime Value (CLTV) CLTV represents the net present value of the revenue stream from an average customer over their lifetime - in other words how much money one customer will give to your business over your entire relationship. Formula: CLV = average value of sale x number of transactions x retention time period. Maintaining a healthy CLTV is a big commitment because it requires so many resources. You have to play the long game. You have to ensure continual customer satisfaction despite ever-shifting needs and wants. You have to drive customer loyalty and beat the competition. A high CLTV speaks to high customer retention, consistent product value, and successful upselling strategies. And it boosts trust in you and your decisions. And if it’s low, there are important decisions to make. Fortunately, the right steps make boosting your CLV much easier and cheaper than you’d think. With all four of these KPIs, it’s important to remember that each of these four metrics don’t just exist in isolation. They have to be treated like a cohesive whole to fuel sustainable growth. Recommendations to Make Things Easier For Yourself As a tech CEO, it’s important that you measure and track the performance of these KPIs, starting with setting a baseline. Setting a baseline will help you gauge where you stand and what your targets could and should be. That way you’ll know exactly how much progress you’ve made (or how much work needs to be done). If all the KPIs aren’t ideal, there are priorities that will turn things around faster. Start by mitigating CCR and RCR. This involves: Interacting with and engaging your customers Listening to their feedback to improve product offerings and pricing Boost their perception of your product value Ensure your UX is as good as possible With CAC, you can create a strategy with your sales and marketing people to streamline it. This can include: Targeting campaigns Using analysis on your customer data to make better decisions Studying your customer retention trends vs. your competition’s rates Optimizing your digital channels for better reach and conversion Lead nurturing Finally, work on improving your CLTV. Acting on the other KPIs can automatically boost this figure, but there are other things you can do, including: Identify sales opportunities Optimize your website and web presence Make on-time payment painless for customers Cut costs including invoicing, billing and reconciliation Boost add-on and cross-selling. All these can make your customers stick around and continue to buy from you. There's one additional specific way you can drive growth. Customer Retention: The Key to Eliminating Churn and Building Growth Customers who stick around the longest are the most valuable. It’s easier and cheaper to keep the ones you have compared to finding new ones. The average cost of acquiring each new SaaS customer is $702, but can reach as high as an eye-watering $1,450. But existing customers spend 31% more than your new customers and are 50% more likely to try your new products. And that's key for successful add-ons and cross-selling. Not only do long-term customers bring in more money, but they are a treasure trove of other resources including brand advocacy, recommendations, and useful feedback for both product R&D and product offerings. So the key to converting a new customer into a long-term customer is to smash churn into oblivion. Though there isn’t a hard and fast roadmap that works for every SaaS business, CCR, RCR, CAC and CLTV are great places to start. They let you know where you’ve been, where you are, and where you could go. They also point toward the issues and work and the issues that need fixing. Curious about getting the tools you need? Book a free Discovery Call with our team today.
06.12.2024
Automation
Empowering Recurring Service Workers: The Impact of Real-Time Information Flow
Information is power. And this is particularly true for the recurring service industry, because workers need the right details to do their job. Without it, a recurring service company has to contend with delays, mistakes, unhappy customers, churn, and job dissatisfaction. These problems have a knock-on effect for the business in both the short and long-term. Fortunately, an operations system that promotes the free flow of information across teams in real time empowers service workers. It streamlines resource allocation and revolutionizes both operations and results. In this article: Why the Lack of Information Makes Service Workers’ Jobs Hard How It Hurts You As a Recurring Service Business What Real-Time Information Flow Brings to Service Workers The Extra Benefits You Get Recurring service workers need accurate instructions on where, when, how, and what they’re supposed to do. The problem is that many recurring services companies don’t give them what they need to delivery a service. So how can they do their job correctly? The short answer is they can’t. And that can have a massive impact on the bottom line of a recurring brand. But providing all the information necessary is a mammoth task if your operations are manual. This article will discuss the problems that come with the lack of free-flowing information. It will analyze how these problems impact your workers and your business. It will then give a good picture of what is needed to turn things around, smoothing out service provision and improving the bottom line for your business. Why the Lack of Information Makes Service Workers’ Jobs Hard Recurring service workers have jobs that require information to be correct and available. This includes things like contracts, terms, and usage. Recurring services companies that use manual processes will have fleets that struggle to deliver consistent, reliable services. In these circumstances, here are the ongoing pain points they contend with on a daily basis: Silos everywhere: When there’s little or no information sync between the financial, sales, customer service, and other teams, the chances of the information going through being correct and timely plummet. Delays aplenty: Thanks to both the manual recording of data and the manual retrieval of information, the data’s delayed, and so is service delivery and decision-making. Bottlenecks in the day: Manually created workflows (especially combined with the delayed and incorrect info) impede service workers' productivity and service quality. This makes bottlenecks that can put them hours or days behind. Mistakes in delivering service: Any outdated data (which can occur at any time with siloed data) leads to costly mistakes in service provision. Resource misallocation: Without reliable information, and with bottlenecks, effective resource allocation becomes impossible. Plunging worker morale: Frustration from manual processes, delays, and lack of access to real-time data, and mistakes in resource allocation can lead to decreased job satisfaction and motivation. All of these throw a monkey wrench into your operations and revenue while both disappointing and infuriating your workers. And these problems will impact your business as a whole as well. How It Hurts You As a Recurring Service Business These problems can spread across anywhere in your recurring service organization. Do any of these impacts sound familiar to you? Higher cost and less incoming revenue: Inefficient operations cut into revenue at any given time because you have to spend more to get results. It also cuts future revenue, because you have continual delays in service onboarding, contract processing, etc. Resource allocation: This is one of the most important challenges in recurring service. You can’t allocate your resources properly when there are delays and data silos that stop information flow. Because manual operations mean phone calls with suppliers. Sales and customer service teams phoning customers putting out fires. Finance checking with sales and customer service about contracts and terms so they can set things up and approve installation. And these scenarios are just for starters. Expensive worker turnover: Employees in burnout or employees who quit are expensive. Either way, it’s most costs for you as you look for replacements who will face the same challenges. Customer dissatisfaction: Customers need consistency in their service quality from installation all the way through the lifetime of your relationship. Without it, customers get unhappy. They rumble. They complain to your customer service department. You’re forced to offer benefits and discounts that you wouldn’t have had to before. Less cash flow: Because inaccurate invoicing, billing discrepancies and delayed payments slows down inbound revenue, you’ll get cash flow issues, and perhaps creditor and supplier issues too. That adds more pressure to workflows to find the money from somewhere else. Churn: There are multiple reasons why you’ll have more churn, and not just because of the problems directly related to your service team. Word of bad service gets out. You competition will notice you’re losing customers. If your base catches wind you’re having service delivery and operations problems, that damages trust in your brand. It also harms your relationships with your customers which drives up customer acquisition and cuts Customer Lifetime Value costs. Given these harms, it’s no wonder that original problem of lack of the free-flow of information poses such a threat. Fortunately, with the right information flow, things can look up, and fast. The solution comes in the form of subscription management platform that analyses and shares data in real time. It brings all the benefits of real-time information, with zero additional effort from you and your workers. In fact, you’ll save them time and resources. What Real-Time Information Flow Brings to Service Workers Subscription management software eliminates data silos so that all the information about your customers, their needs, their contracts and terms, and usage are readily available, anytime, and all the time. It’s accurate and free from manual errors too. This information is available to you, your sales team, customer service, finance, fleet management, and anyone else in your operations who need it. Real-time information flow transforms how service workers operate within recurring service businesses. They get real-time access to important data, which includes usage, changes in contract terms, offerings, and service schedules, preferences, inventory/supplies, etc. This helps them with any decision-making they’ve got along the way. When data flows in real time across the service-related departments, service workers know where they are supposed to go, when, and for what. Management becomes more…manageable because the free-flow of data also gives them bonuses - proactive issue resolution, predictive maintenance, and personalized customer interactions. Workflows are nicer too, because they’re not based on errors or guesses. Which all means…satisfied service workers with a much less stressful day-to-day schedule. And that’s not all… The Extra Benefits You Get Just like the lack of data flow causes knock-on impacts for you and the greater business, so does free-flowing information. Here’s how things turn around for the greatest business and brand beyond your happy service workers: Your customers get an exceptional experience: Everything from fast responses to personalized services right down to the service delivery and invoicing/payments, everything’s customized end-to-end for them. That creates loyalty and cuts churn in general. Siloes are cut down, and communication is better between all teams: Real-time data that is automatically and freely shared means that numbers are more reliable, forecasting more accurate, and reports are great foundations for strategic decisions. All people can collaborate more effectively because no one has to chase or guess anything. Resource allocation is optimized: It won’t just be your service team that loves this free flow of information. When your scheduling is efficient, your maintenance planned, and your resources utilized in the best way, you cut costs and boost efficiency. More revenue growth: With proactive service management and the best billing and payment processes that are automatically run for you by a good solution, revenue grows because you don’t have costly errors. Your teams aren’t throwing out expensive discounts to keep customers with later service on side. You aren’t replacing your burned out service workers. You’re not waiting for payments. And word of mouth works in your favour between customers. Long story short, you get the competitive edge. Conclusion Real time information flow isn’t just a tech upgrade. It’s a necessary investment in the contentment of your service workers, and the future revenue growth of your business. The efficiency and effectiveness of service workers will play a pivotal role in any recurring service business. They just need the tools necessary to their jobs. Going with the right subscription management solution will solve these problems and bring so much more to the table. Curious to see how it will work for you? Book a free Discovery Call with our team today.
03.12.2024
Customer Insight
The Psychology Behind Successful Recurring Services Brands: How to Win Their Minds (and Hearts!)
Recurring services have an untapped free resource that could help them build lasting customer relationships and drive growth. The resource? Psychology. It gives insights into customer behavior which is the key to understanding how to build trust, communicate with impact, and grasp customer behavior. This article covers multiple strategies a recurring service-offering business can use to leverage psychology to better meet their customer base’s needs while enhancing customer satisfaction, retention, and a competitive edge. In this article: What Links Understanding Customer Behavior to Success Building Trust and Credibility: The Pillars of Customer Relationships Starting a Referral Program Knowing the Customer Understanding what people want and why they do the things they do is the most valuable thing a business can know. This is especially true for recurring services, which rely on long-term relationships and continual customer satisfaction. If you are a business that offers recurring services, you know that building those long-lasting relationships with your customers drives sustained growth. Appreciating why your customers need what they need and make the decisions that they do will be a game changer. In this article, we’ll dip our toes into the pool of consumer psychology, and then have a look at some of the strategies that successful recurring services brands use to boost their customer relationships. What Links Understanding Customer Behavior to Success A successful recurring brand will put consumer behavior front and center. Consumer behavior guides a business to know things like: what products and services they should sell when they should sell them what customers like and dislike how they like to be communicated with In essence, it shows how to make customers happy. 86% of buyers will pay more for a great CX. -Price Waterhouse Coopers 80% of organizations expect to compete based on CX. -Gartner When a recurring service jumps into the world of psychology, they are better equipped to create and tailor offerings to meet the needs and demands of their target market. Creating segments and personas that are based on demographic and psychographic data further helps by personalizing how they service and communicate with the customers. Building Trust and Credibility: The Pillars of Customer Relationships Who wants to give their business to a company that can’t be trusted? Trust is extremely important in the recurring services industry because brands have an ongoing purchase-involving relationship with customers. Trust forms the bedrock of successful customer relationships. When customers feel appreciated, listened to, and told the truth, their trust builds. And that trust is needed to keep building a customer base. Knowing the Customer What steps can a company take to build that trust? Researching and acting on how and why customers do what they do has a positive impact on everything from pricing strategies to leveraging loss aversion to shaping product and service offerings. Here are some of the most popular options: 1. Use FOMO and Social Proof to Drive Conversions Both social proof and Fear of Missing Out can boost conversions and loyalty. Social proof capitalizes on a customer’s likelihood to look at the way others behave to influence their decisions. If a customer is uncertain about your brand or recurring service, they would find the experiences of others useful when making their own decision. It’s why businesses put testimonials on their website and write case studies. It’s also why customers check reviews before they buy things. Similarly, FOMO takes advantage of the fear of missing out on a rare opportunity which may never happen again. It’s an emotional trigger that can inspire a customer to act fast, especially true for the 70% of Millennials who experience it. Everything that falls under these two factors including testimonials, reviews, timers, pop-ups for one-off flash sales, user-generated content, and endorsements on social media boost the confidence of potential customers. They also encourage action. 2. Bring in Gamification for Engagement and Retention Gamification in the User Experience makes things a lot more fun. Competition and achievement tap into the brain’s rewards systems and gives a good hit dopamine to add fun, Their sense of accomplishment encourages engagement and keeps them coming back for more. They’re motivated to stay active, check out the different features you want to highlight, and work for set goals. It’s a win-win situation - you expand your base and Customer Lifetime Value, and your customers associate your brand with fun. 3. Show Reciprocity in the Personalized Experience That old saying “You scratch my back, I’ll scratch yours” is a popular phrase for a good reason. As customers we like to know a business isn’t taking advantage of us. We need to feel appreciated and seen. This is especially important online, where so many financial interactions are faceless. Reciprocity, or giving something in return, is a great way to meet this expectation. There’s so much variety in how you can show reciprocity! There are personalized gestures that can be created for any individual including: discounts loyalty schemes public shout-outs Features on the website surprise gifts or handwritten notes All of them can trigger a feeling of appreciation and uniqueness, which deepens your connection. Customers who feel valued will stay and continue their recurring purchases. They’re also far more likely to tell others about it! 4. Leverage Personalized Email and Marketing Strategies Marketing teams equipped with the customer data and insights they need to drive marketing have a huge advantage. They have the power to build relationships with all their customer segments through personalized messaging for each group and individual customer. And what’s more, they know the best times to deliver those targeted messages, offerings, and campaigns. 76% of customers are more likely to buy from brands that use personalization. Personalization can bring companies up to 40% more revenue. -McKinsey Personalized marketing brings both existing and potential customers content that is compelling, because it’s tailored for their specific situations. Whether it’s to educate, entertain, or to build relationships with the brand, customers will find it useful. And that nurtures relationships over time, driving revenue growth and a better Customer Lifetime Value. These are all impactful strategies that can boost your customer satisfaction and lifetime value. But there’s a slight snag. They will take up time and resources from your teams. Unless you use a solution that does everything for you, freeing up that time and resources. Where Help Comes From There is a comprehensive, automated solution that boosts customer experience by using psychology-focused strategies so that you get all the benefits but need less time and resources diverted from your teams. Imagine one platform that does everything for you. It pulls together all your legacy data, and streamlines all data trapped in silos, sharing it in real-time. That data forms the basis of an agile knowledge bank that knows your customers, their behaviour, their needs, their segments, what your competition is doing, the best pricing models, and insights and reports that is available at any time. On top of that, automation uses all that information for its processed actions. Everything from: Product offerings Coordinating customer feedback and testimonials Individualized pricing and add-on combinations Determining the best offers for each customer Marketing like email funnels designed to guide an individual customer journey Identifying the best times for a FOMO promotion Boost transparency with clear communication about pricing, usage and maintenance, contract terms, etc. Tracking the impact of all these actions And so much more. It leverages psychology for you, making your impact with your customers so much stronger. And it makes your employees so much happier, because they’re not stuck doing repetitive, time-consuming work. Instead, they’re taking these customer insights and creating a more compelling customer experience for new and existing customers. Conclusion Understanding the psychology behind customers and how they interact with brands enables a recurring service provider to drive up engagement, conversion, loyalty, and long-term revenue. It gives a strong advantage over competitors too. Curious to see how fast you could benefit? Book a free Discovery Call with our team today.
Bluefort is the Microsoft Cloud Partner and Authority with core competence in Subscription Management and Recurring Revenue automation for SMBs and Enterprise Business.
