Founded in 2013, CleverTap enables enterprises to segment users and uncover key insights. The company enables clients to deliver omnichannel experiences to millions of customers in real-time with proprietary Big Data and artificial intelligence (AI) engines.
CleverTap serves more than 8,000 clients globally, including Fortune 500 companies. Some of CleverTap’s clients are Hotstar, ESPN, Domino’s, Dunzo, Vodafone, GoJek, and Nykaa, among others. It is backed by some of the marquee investors including Sequoia Capital, Tiger Global, and Accel Partners, among others.
At the 11th edition of YourStory’s flagship event TechSparks 2020, Malay Harsha, VP Marketing at CleverTap, conducted a workshop to emphasise on how ‘customer retention is the new growth.’
“In a world full of acquisition, how does retention fit in?” Malay went on to explain.
Malay Harsha, VP Marketing at CleverTap during Masterclass at TechSparks 2020
What is retention?
Malay started the session by describing the concept of retention. His first question to the audience was: “What would you need to do to get one million users at the end of 90 days?”
The answer usually is to start with 90 million users, and within 90 days or three months, one million users will remain. Malay uses this example to explain the Leaky Bucket problem.
He said, “90 percent of users are lost in the first three months.”
In order to retain more users, a company can start with 100 customers. At the end of the first month, it retains five percent or five users. The company then starts its second month with those five users, plus 100 new users. Now at the end of two months, the company is left with five percent of the users.
Illustration courtesy: YS Design
Therefore, “Customer acquisition is often not sustainable due to the Leaky Bucket Problem,” he said.
Thus comes retention to the rescue. “It refers to the ability of a company or product to retain its users over some specified period. High retention means customers of the business tend to return to, continue to buy, or in some way not switch to another product or business, or to non-use entirely,” Malay explained.
Retention can be categorised into three phases -- initial retention, mid-term retention and long-term retention.
Pillars of retention
Once the concept is understood, the company has to work on building retention. Malay explained the three pillars of retention.
- Audience Analytics: Identifying the behaviour patterns that impact retention. This can be further divided into funnel analysis, flow analysis, and cohort analysis.
- User Segmentation: Group users based on similarities and shared behaviour. Segmentation strategies can be categorised into RFM Analysis and intent-based.
- Omnichannel communication: Orchestrate omnichannel experiences for higher relevance. Omnichannel communication can be accelerated using elements such as push notifications, in-app notifications, SMS/MMS, emails, through website, WhatsApp, and digital ads on platforms such as Facebook and Google.
What does it take?
Malay further explained what it takes to build customer retention. First is by eliminating user data silos. “If you have multiple platforms for analytics and marketing automation among others, kill it. This is where things go wrong,” Malay said.
Second is by aligning the three core metrics -- monthly retention rate (RR), Key Conversation Rates (CRO) and Lifetime Calue (LTV).
And finally, entrepreneurs should adopt an experimentation mindset. “You need to drive experiments as frequently and as often as you can so that you can keep learning more,” he added.
According to the Harvard Business Review, it is 25x more expensive to acquire a new customer instead of retaining one’s existing base. Bain and Company also suggest that a business can increase its profits by 75 percent by increasing the customer retention rate by just five percent.
“Instead of throwing money on acquiring new customers or users, it is wiser to curate experiences to retain the existing customers. The propensity of them purchasing the product is high,” Malay said.
TechSparks - YourStory's annual flagship event - has been India's largest and most important technology, innovation, and entrepreneurship summit for over a decade, bringing together entrepreneurs, policymakers, technologists, investors, mentors, and business leaders for stories, conversations, collaborations, and connections that matter. As TechSparks 2020 goes all virtual and global in its 11th edition, we want to thank you for the tremendous support we've received from all of you throughout our journey and give a huge shoutout to our sponsors of TechSparks 2020.
Edited by Megha Reddy
Link : https://yourstory.com/2020/10/techsparks-2020-masterclass-customer-retention-clevertap
Author :- Debolina Biswas ( )
November 11, 2020 at 06:50AM
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