Think about the companies you most admire. Odds are, when you do that, you don’t just think about the products or services themselves, though they may be very good. You probably think of all the pleasant interactions and little acts of generosity that define your business relationship. In other words, you probably had a great post-purchase experience!
We talk a lot about marketing and why it’s so important to meet customers’ needs, even the ones that aren’t obvious. It’s true that advertising, sales, emails, and tweets are all forms of marketing. Yet the most important form of marketing happens in your customers’ heads.
After every interaction with your business, a customer asks themselves, consciously or unconsciously, two simple questions:
- Do I want to buy from that business again?
- Was the experience good enough to tell a friend?
In this post, we’re going to talk about how to make your customers say “yes” to these questions more often. Our primary focus will be on everything that happens after the sale.
Customer retention is vitally important to your business success
In business, a couple of smart pieces of advice can really help you acquire customers. First, there is the law of product-market fit, which is “you have to make the right products for the right customers.” There is also its corollary: audience-message fit, or “you have to tell your potential audience about your product in a way that they find worth acting upon.”
This advice is great for drawing in customers. If you follow those two pieces of advice alone, your odds of success multiply. However, if you really want to roll in sales revenue, that’s not enough.
Customer retention is gold for business. Retaining customers means your marketing costs will drop, your marketing ROI will increase, customers will stay loyal, and they will bring their friends.
It makes sense when you put it this way, too. After all, it’s a lot harder to convince somebody to do something for the first time than it is the second time.
There is a strong mathematical argument to be made here too. When we talk about marketing metrics, you’ll notice that we like to say “lifetime value” and “customer acquisition cost” a lot.
Lifetime value (LTV) is the amount of money your average customer will spend on you over the course of their entire relationship with the business. Customer acquisition cost is how much money it costs to get someone new to buy from you.
One important trick to running a profitable business is to make sure that LTV is much higher than CAC. Think at three times higher or more.
If you want more profit, you can either increase revenue or cut expenses. You can increase revenue theoretically infinitely, but you can only cut expenses so much. That’s one reason why it’s better to increase LTV than it is to cut CAC. The other reason is that if you increase LTV relative to CAC, you make more money with the same investment.
Good post-purchase experiences mean more sales with less promotion
One of the best ways to increase the amount of money that customers are willing to spend on your business is to make their post-purchase experience a good one. It’s a major factor in whether or not you retain customers.
If you ensure a good post-purchase experience, then you retain more customers. If you retain more customers, you get a better LTV out of the average customer. On top of that, if you do an exceptionally good job, your customers will refer their friends, thus reducing your CAC as well.
The case for spending time making the post-purchase experience is a strong one. That’s why I am going to devote the rest of this article talking about how you can make that happen. I’ll conclude with practical tips which you can use. But first, I’d like to contextualize what you’re seeing by talking about user experience and customer experience.
User experience: making systems people want to use
User experience (UX) is how people feel when they interact with systems such as websites, mobile apps, or software. For the most part, people associate the discipline of UX with information technology. (You might remember this from our podcast with Sean Fallon!)
This somewhat misses the full depth of what UX actually is, though. Boil away all the terminology and jargon used to talk about complicated concepts, and you’ll have nothing left but the essence of UX. That is: “fulfill customer needs through well-made products or services.”
Sounds an awful lot like marketing, right?
UX is unique because it provides specialized frameworks that help you make systems that create good experiences for users. Some of these include:
These are all great, and I’ve personally used all of them at some point in my career. But, for me, there is one UX framework that stands head and shoulders above the others. Anyone can pick this up and intuitively understand what to do and why it’s important.
That is an empathy map. In it, you ask a few questions:
- Who: Who are we empathizing with?
- Need: What do they need to do?
- See: What do they see?
- Say: What do they say?
- Do: What do they do?
- Hear: What do they hear?
- Think and Feel: What do they think and feel (positive and negative)?
If you fill one of these out, it puts you in your customers’ shoes. You can really see the world as they see it. That will make it much easier for you to create the post-purchase experience which they want.
Customer experience: making businesses people want to buy from
Customer experience (CX) is the cousin of user experience, but it’s a bit broader. UX focuses on how systems make users feel. CX focuses on how the sum total of interactions that a customer has with a business makes them feel.
Yeah, it’s a really, really big concept.
Understand it well and you can increase customer loyalty, satisfaction, and convince people to promote your business for you. Do a bad job with CX and people will become unhappy and unlikely to shop from you ever again.
One concept in CX that I think is particularly useful to any small business is that of “customer touchpoints.” A customer touchpoint is basically anywhere a customer will interact with your brand. Touchpoints come before, during, and after purchases. A few examples include:
- Before purchase: reviews/testimonials, social media, ads, word of mouth
- During purchase: your store, website, sales staff
- After purchase: invoicing, transactional and marketing emails, customer service
You want to make sure as many touchpoints as possible ensure a positive experience for customers. If your goal is to improve the post-purchase experience, then, you want to make sure all post-purchase touchpoints leave customers with good impressions.
7 ways to ruin the post-purchase experience
To understand what a good post-purchase experience looks like, let’s talk about bad experiences first. These are the pitfalls you want to desperately avoid.
- Slow or inaccurate order fulfillment. Customers expect fast shipping and they get frustrated when they don’t get it. Ideally, you need items to arrive on your customers’ doorsteps within three days of their order. And if the item arrives broken? Forget it!
- Poor communication. Customers hate being left in the dark. Your customer service phone number and email address need to be clear and accessible and you need to respond in a timely manner. If your business is an online business, you need to send order confirmation emails.
- Stingy return and refund policies. Eighty-one percent of customers say they are more loyal to retailers with generous return policies. It makes sense, too. There’s nothing quite as annoying as being stuck with a broken product because of a bureaucratic return process. “No returns” is practically a cuss word these days.
- Poor branding. This is a complex point, so check out our guide on branding to know why this is so important.
- Bad customer service. When customers call or email your company with questions, treat them well. You have a chance to win them over and retain them. Failure to take care of them means losing people who would otherwise buy. Think of it this way: people don’t bother to contact companies with questions when they’re done with them.
- Bland packaging. Pretty packaging is not necessarily essential to ensuring a positive post-purchase experience, but it does go a long way. We talk about that in length in this post.
- Never asking for feedback. If you run a business, you will inevitably do something wrong. This is okay and it’s part of the process. If you never ask for advice, though, you’ll keep making the same mistakes, thus sabotaging the potential to make a better post-purchase experience.
6 practical tips to make a great post-purchase experience
As useful as “thou shalt nots” can be, I want to take a moment to help you see ways you can create an excellent post-purchase experience. You’d be surprised how simple some of these are to implement.
- Ask for reviews or surveys. This has two positive impacts. First, asking people for their feedback flatters and engages them if you do it in a sincere way. Second, the feedback that you gather can kickstarter a positive cycle in which you fix problems you were not previous aware of!
- Communicate well. Transparency and straightforwardness will make people like and trust your business, giving them a positive experience. Sending branded shipping confirmation emails, for example, are one good way to do this in a useful, non-intrusive way.
- Implement a loyalty program. A well-made loyalty program gives you a chance to please customers with strategically-timed discounts and other goodies. This is a great way to build a long-term business relationship!
- Use social media wisely. A full 44% of retailers have stated that social media can increase customer retention. It makes sense, too. Social media is a great way to share content, handle customer service, and run giveaways!
- Provide great customer service. Honest, personal, decent customer service can turn angry people into wonderful people. No one contacts customer service to ask about your day. They have a grievance and they want it addressed. Give them the empathy and quick solution they deserve and you will greatly exceed expectations and, thus, retain the customer even if you initially screwed up!
- Ship quickly. It sound so obvious, but it’s such an underrated tip. According to Deliverr, 96% – yes, you read that correctly – 96% of customers say that a good shipping experience influences repeat sales. If you get this one tiny part of your business right, you can make the post-purchase experience for customers much better
Ultimately, you want to make a business that your customers love interacting with. It’s not just a kind thing to do. Ensuring that your customers have good post-purchase experiences is a smart long-term business strategy.
Retaining customers is a much more cost-effective way to make a profit than constantly acquiring new customers. It only makes sense that customers would come back for more if there experience was a good one.
Fortunately, it’s not hard to make post-purchase experiences better. Small gestures like providing great customer service, shipping quickly, and being a good communicator go a long way!