How Defining Your Buyer Persona Helps Reduce Customer Churn
Customer churn is one of the biggest nightmares of subscription-as-a-business-services (SaaS). Rightly so, churn highly impacts your business revenue and requires you to invest more resources in customer acquisition, and because of the abundance of options, customers rarely care about giving businesses a second chance. Research by PWC states that 32 percent of new and existing customers discontinue their services with a brand just after one negative experience, even if they had experienced excellent customer service.
Businesses try to tackle the churn situation when they face it in full form, and that is where they go wrong. Churn is inevitable – think of any big brand, be it Apple, Netflix, Microsoft, Amazon – every one of them faces churn. The difference lies in how they handle it and keep it to a minimum to not let the revenue be affected greatly.
If you wish to do the same, you need to keep a tab on customer churn from the beginning – even before you begin buyer acquisition – and invest in creating buyer personas. You must have heard about their importance in marketing. However, they are as beneficial for reducing customer churn as they are for long-term success.
In this blog, let us understand the basics of buyer personas and how they can impact the customer churn rate of your business.
What is a Buyer Persona?
A buyer persona is a profile of your ideal customers that depicts their semi-fictional representation. The profile shows every little characteristic about your current or prospective buyers. Here are some of the elements that it includes –
- Personal demographics
- Professional demographics
- Specific professional profile
- Personal and career goals
- Values in personal and professional life
- Personal preferences and lifestyle choices
- The negatives, in reference to your business
By creating buyer personas, you put yourself in the shoes of your customers so that you can do a better job of acquiring and serving them.
How Does Buyer Personas Prevent Churn?
- Makes You Understand Your Buyers
The main objective of creating buyer personas is to develop a deeper understanding of your current and prospective customers. One may question why we need to do so?
Well, picture yourself buying a gift for your partner at a shop. How do you select the gift? You visualize them in your head; think about their personality, needs and wants, things they like or dislike, things that suit them or won’t fit at all, etc. Having clarity about these aspects allows you to buy the perfect gift for your better half.
The reason why you need to understand your buyers is the same – you get to know them better, which makes you serve them in a way they find valuable. If you can cater to their needs, their complaints are likely to be at a minimum, preventing the possibility of customer churn.
- Ensures You Are Marketing to the Right Audience
One of the many reasons for the customer churn is customers finding the product to not be the right fit for themselves. When they find the product not meeting their needs, they leave it and approach your competitor.
Right customer acquisition is crucial to creating a pool of long-standing customers. However, a majority of SaaS businesses fall in the loop of closing the wrong deals.
As Lincoln Murphy said on Sixteen Ventures, “Companies generally end up diverting resources from the customers with Success Potential who could actually benefit from their attention to those that, regardless of effort, will not be successful.”
Buyer personas are your rescuer here. After researching the market thoroughly and studying the insights into your existing customer base through surveying or interviewing, they help you figure out your absolute target base. When you market your products or services to the right people, they’re less likely to contribute to the customer churn rate.
- Aligns Your Target Message
Marketing is no easy feat; it is expensive and requires effort. Therefore, you do not wish to shoot blank arrows. Along with targeting the right target audience, you also need to ensure that you are delivering the right message to capture the audience.
Moreover, it is not enough for just the marketing team to understand the right target message to deliver to your audience. Customer acquisition includes a lot of departments of the company, such as sales, customer support, and operations.
Here are two requirements:
- Your target message should be aligned with what your audience needs to hear or what compels your audience to engage with your brand.
- Your entire organization must be aligned on the same target message.
If your marketing team is sending out different messages than other teams of your organization, it will impact your ability to convert and retain customers.
By taking out time to create buyer personas, you can ensure your marketing efforts are going in the right direction with the right messaging.
- Helps You Adopt Personalized Strategies
Buyer personas essentially recognize different kinds of customer personalities based on their demographics, preferences, and other factors and put them in different baskets.
In short, a one-fit-all strategy cannot work for all your customers. The most obvious reason is that every customer is different. However, there is another aspect to it, which is you do not acquire all your customers at the same time. Since personalization is the key to offering tailored experiences and boosting business sales, you can not provide the same treatment to your latest acquisition and a year-old customer.
Creating different buyer persons allows you to create individualized experiences for your customers. It improves the overall customer satisfaction and results in decreased churn rate.
Esteban Kolsky, the founder and principal of thinkJar, states that if companies succeed in solving customer issues during the first time interaction and managing customer expectations, they can reduce customer churn by 67%. Buyer personas provide you with the facility to keep your acquisition, marketing, and retention strategies aligned from the very beginning.
Neha Bhatiya is a strategic content writer and customer service expert. She’s big on educating clients on how to improve customer satisfaction, boost sales, and reduce B2C churn. She writes for Gravy Solutions, a SaaS customer retention solution and a leading provider of enhancing your sales and profit margins by reducing your churn rate and recovering the failed business payments.