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.
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