4 Psychological Principles CSMs Can Use To Improve Customer Retention

This post was first published at learndot.com.


Turning average customers into dream customers means creating an experience that leaves your users emotionally affected. CSMs and CEMs can create that effect by incorporating some basic psychological principles.

1. Empower your customers to prevent churn.

Empowerment is an incredibly powerful psychological principle created by giving customers an active role in their own success. As humans, we are psychologically wired to be loyal to companies when we feel empowered by them and invested in their product experience. (Source)

CSMs can empower customers throughout their product/brand experience by committing to involve customers in the product improvement processes through regularly seeking feedback and suggestions. Achieve this by scheduling frequent communication with your customers in order to find out what their sticking points are, and be sure to make it clear you will communicate any issues with your Product teams. You can also help to empower your customers by co-creating realistic yet meaningful goals with them in order to benchmark their success.

Research suggests companies who empower customers by integrating their feedback into their marketing, sales, and development processes are rewarded through customers who display a “stronger demand” for their products. (Source). 

2. Create positive “future experiences” to strengthen emotional ties between you and your customer.

Psychology research published in the journal Cerebral Cortex shows that  when we experience something in the present, we subconsciously call upon the memory of that experience to anticipate future happenings. This means that if you create a positive customer experience now, the customer will use that experience to determine how future dealings with your and your company will go. In short: the best predictor of your customer’s happiness and success in the future is your customer’s happiness and success right at this moment!

Positive “future memories” can be created most easily through dynamic, ongoing customer success support. Set regular goals with your customers, check on their progress, and provide additional education when they need to get back on track. Remember that every ounce of effort you put forth to making your customer successful now will be rewarded through securing their future business. (Source)

3. Use “motivated reasoning” to link your product with positive emotions.

Studies show that when we make decisions, emotions rule. Reasoning and logic are only partial factors. Emotions tip the scales. (Source) This goes well beyond a conscious “that went well” feeling after a successful onboarding process. It means getting customers excited about what you have to offer.

Start with a roadmap. Dedicate a portion or your homepage or blog to keeping customers informed about upcoming features. Give them an avenue to get involved in the process. Once they get involved, they get emotionally involved. If your team delivers on a goal that he or she was involved in, they’ll get excited. Once they get excited, motivated reasoning takes over. Your customer now has an emotional stake in your success. Customers with an emotional bond spend more time with your product, and more time raving about it to their friends and colleagues. 

TriNet, a customer of Get Satisfaction, a customer engagement platform that helps companies build better relationships with their customers and prospects, used the platform to garner 800 ideas posted from 1,200 customers. Your customers want to get involved. Make it easy for them to do so.

4. Leverage eusocality to create a sense of community among your customers.

Have you ever wondered why we’re so drawn to sporting events? Why we’re so divided in our politics? Or why high school kids tend to congregate in cliques?

According to biologist E.O. Wilson, the answer is simple: humans, like ants, feel a strong desire to belong to a tribe. Marketing expert Seth Godin teaches us that Tribes are fundamental to our humanity and ability to make an impact in the world.

This need is a result of simple biology arising from a complex evolution. Biologists call it eusociality. It’s a melding together of individual selection, in which individuals compete against each other, and group selection, in which individuals work towards a common group goal.

Take advantage of our human tendency towards eusocality by building community. When we create a community around your brand, you foster loyalty. When you make your customers feel as if they’re part of a larger community, you create a close-knit group united by a single thread: your brand. 

Mogo, one of Canada’s most successful short-term lenders, is a great case study in eusocality. Initially, the company used a simple web form to interact with customers one-on-one. That method produced mediocre results. Mogo switched to Get Satisfaction’s Facebook app to foster a community around their brand, and it worked. 

Philipp Postrehovsky, Mogo’s Online Community Manager, attributes the success to building community: “The transparency we’ve enabled with a Get Satisfaction community and Facebook not only positively impacts our customers, but it also allows people to better understand us as a brand before signing up. This has allowed us to increase conversion.” (Source)

And those customers will stick around. By actively inviting your customers to participate, you foster a sense of community, greatly increasing the chances that those participants remain loyal customers.

Conclusion

Understanding and harnessing these four psychological principles is just the tip of the iceberg when it comes to creating experiences that will reduce churn and increase retention. Remember: the more positive experiences you create for a customer, the greater your opportunity they’ll become a dedicated, loyal user.