How to improve your customer retention rate in just 30 minutes

One of the major transitions that app and website owners have undergone in recent times has been the shift in focus from acquiring new users to retaining current users. Building customer loyalty is taking over measuring the number of “installs” in the app universe as business owners begin to realise the advantages of customer retention over acquisition. In short, it’s the quality of users you have versus the quantity.

The advantage that user retention has over new user acquisition is that it is six times more cost-effective to retain a current customer than it is to acquire a new one. Statistics show that existing customers are 50% more likely to try new products and spend 31% more money compared to new customers.

Increasing customer retention rates by a mere 5% leads to a 25% to 95% increase in profit, according to a Bain & Company study. Despite this overwhelming evidence, only 18% of companies make retention a top initiative.

In order to figure out how you can increase user retention rate, let’s first understand the existing trends across sectors:

Customer retention rate

In simple terms, retention rate can be defined as “returning to the app at least 1x within 30 days.” It’s the number of times a customer uses your app after installation within the first three months. As per industry standards, retention rate is usually measured for 90 days or over the span of one quarter.

The shift in focus from attaining new users to retaining the existing ones comes from the revelation in understanding app or website metrics. While ‘installs’ were considered to be the strongest pillar of success, what people didn’t take into account was the fickleness of these users.

On an average over 29% of these new customers use the app just once causing a big leak in number of installs that convert. In a further study, this number reduced to 23% by the end of month three. This is why brands are going beyond measuring app installs and focusing on in-app behavior to promote engagement and retention.

In their 2017 study, Localytics reported that the average mobile app retention rate was just 20% after 90 days. This meant that 80% of average users churn out an app within the first three months of installation.

If you study average retention rate across industries, you’ll notice that the situation is grim despite the difference in nature of websites and applications.

The MixPanel Benchmark report aggregated data from 1.3 billion unique users performing 50 billion events around the globe. It shows average and best-in-class benchmarks in four popular industries for product innovation: financial services, media & entertainment, software-as-a-service (SaaS), and e-commerce & retail.

According to the study, the numbers are uniform across all sectors. People are as likely to bail on SaaS apps as they are to abandon a media & entertainment one, after a week.

AI to the rescue:

Why do websites and apps have such a poor retention rate? What is it that businesses can do to improve user loyalty and avoid such massive leaks?

It is clear that a consumer is less likely to revisit the app unless brands make specialised efforts to increase their retention rate. Therefore, in order to retain users, brands should aim at building an engaging platform which reduces the number of one-time users and adds value to the overall customer experience.

This is precisely where the power of artificial intelligence reveals itself. Businesses integrating AI solutions see a much higher retention rate than their competitors for the many benefits that an AI-enabled interface brings on the table for a consumer.

According to a Pegasystems survey on customer engagement, 100% of top-performing companies are currently using AI. On top of that, 56% of the top performers are investing in AI to personalize and continuously learn from customer interactions, compared with 41% of lower-performing companies.

Brands can adopt Artificial Intelligence to increase customer retention either by developing APIs or by integrating a software development kit (SDK) with their website or application that suits their needs.

Becoming increasingly popular these days, SDK is essentially a set of software development tools that allows the creation of applications for a specific platform.

While different artificial intelligence softwares can help you retain customers in different ways, Niki SDK is one of the best software kits available in the AI-space. It is a mere 1mb in size, easy to customise, quick to integrate and comes with all the services available on the Niki app – including Recharge, bill payments (postpaid, electricity, dth, landline, gas, datacard, water bill), Cab booking, Bus booking, Hotel booking, Movie booking, Laundry etc. With this simple integration, a brand can offer 20+ services provided by 40+ merchants on board to its customers.

Here are some of the ways integrating Niki on your platform improves customer retention rate in just 30 minutes:

User engagement: Once you’ve integrated Niki SDK on your platform, your customers can avail the many services that Niki offers. They can do recharges, pay bills, book cabs, buses and movie tickets, find local deals, events and get things done by simply chatting with Niki. Niki reduces the customer’s need to be on any other app or website for a transactional activity, thus reducing multiple hops to get things done. It provides all that a consumer needs under one umbrella and you can do the same by just integrating Niki SDK with your platform.

Moreover, study shows that ‘Utilities’ has the unique distinction of having the highest consistent customer retention out of all categories. Therefore, having Niki services on your platform makes you a one-stop shop for your customers for various transactional needs.

AI-powered chat interface: The AI-powered conversational UI interface on your platform takes User Interaction to the next level. These bots can offer tailored messaging and improve the customer’s experience which creates loyalty. Moreover, this kind of interaction provides the data that helps businesses to understand customers better with the help of transactional, behavioral, and other clues they leave behind. You can use this data to then predict what your customers want and in turn service them better.

New users: Brands need to maintain a good balance between acquiring new users and retaining the existing ones. Offering Niki services on your platform allows you to widen the existing customer base and also helps you cater to a larger audience.

Monetising customers: Apart from drastically improving customer retention rate, you can also earn lucrative commission for every transaction by your customers who avail Niki services on your platform.

Bridging the gap between lending platforms & users: Niki’s integration with fulfilment partners across domains provides consumers with multi-faceted benefits.  One such USP is Niki’s lending partners such as ePay Later and EarlySalary that allow users to borrow funds in the simplest way possible – on chat!

Voice & Vernacular boost for retention

The chat-interface is also transforming to add voice-recognition offering vernacular support in multiple languages which will enable Niki to take instructions in Hindi by June. By December 2018, Niki will also be able to respond to other Indian languages such as Tamil, Telugu, Kannada, Malayalam, Bengali and Marathi.

 

 

 

 

 

 

 

 

This will be a game changer for retention marketing in a country like India where despite a growing internet penetration rate, consumption of online services remains flat due to lack of accessibility. Users across ethnicities, locations and languages will be simply able to talk to Niki in their native language and do transactions online in an even simpler way. Brands can leverage on this update to take a lead with a new-age transactional interface and provide a wide base of users, a platform to engage as they please.

Helping businesses grow:

The first ones to take a step towards the future of retention marketing are niki SDK partners HDFC Bank, ICICI Bank, Federal Bank, RBL Bank, Equitas Bank, Vijaya Bank’s – Vpay Quick, Intex, Zopo, Karbonn, ticketgoose, epay later, early salary, CoHo and fiscus among others.

In partnership with Niki.ai, HDFC Bank developed the HDFC Bank OnChat bot. Here are some key highlights from the integration:

  • Within 12 months, more than 2,10,000 consumers were interacting with HDFC Bank OnChat.
  • Over 24,000 transactions worth INR 16.7 million as a result of 1.28 million interactions.
  • Over 137,000 new account sign ups via phone registration from the OnChat bot
  • 400% increase in average order amount

Post the integration, the brand not only acquired new customers, but was also able to retain the existing ones:

The chat-bot gained recognition all over and was awarded as “Social Media Initiative of the year” in Asian Banking and Finance Retail Banking Awards. It was also a finalist in “Channel Innovation” category at BAI Global Innovation Awards – Chicago.

Integration with Niki SDK also achieved multiple milestones for its other partners:

  • After payment integration with Federal Bank in December, users could make payments on their platform hassle-free without providing any additional card or wallet details. This helped remove any consumer hops to other payment service app or website and provided 6x growth in orders as well as a 5x growth in revenue from November 2017 to January 2018.
  • In the non-banking segment too, integrating Niki brought brands access to its payment partners such as Paytm, Lazypay, Amazon Pay, freecharge and helped in retaining users who would otherwise move to other applications for making transactions. Retention rate for such partners increased from 22% to 55% within a span of two months.

  • Overall having Niki services on board helped our SDK partners achieve upto 52% customer retention rate on chat, out of which 80% users placed orders as well.

 

Currently, Niki has has over 25+ SDK partners across industries and continues to make an impressive impact on all.

The consumer space as we know it is about to transform in an aggressive manner and we at Niki.ai are making sure that you don’t miss the bus. Join the future of retention marketing and take a step ahead in the right direction with Niki SDK.

To give your business an AI boost, integrate Niki’s SDK on your platform today!