When Russell Crowe’s character in The Gladiator bellowed, “Are you being entertained?” his question was directed to many types of audiences in the Colosseum.
The group we are most interested in is the one that roared an enthusiastic “Yes!” in response because they saw the value in the experience and were expecting to be entertained. In marketing terms, they would be sticky customers.
Customer stickiness is a growth marketing metric for organizations of all kinds. In this blog post, we explore the what, why, and how of customer stickiness. Let’s get to it.
How to Improve Customer Stickiness
Summarize this article for me pleaseUnderstanding Customer Stickiness
Customer stickiness is the tendency of your customers to repeatedly purchase from your business, even when there are plenty of competitive alternatives.
Remember, sticky customers are different from loyal customers. Sticky customers choose a brand because they find some value in doing business with them, such as lower prices, better service, closer location than a viable competitor, etc.
They are not ‘loyal’ customers in the sense that they do not have an emotional bond with the brand. We’ll explore that distinction in more detail below.
But here is the key characteristic of customer stickiness that brands should assess:
The why: Stickiness explores the reasons for a customer’s tendency to return and doubles down on them. For example, if 24×7 support is what keeps your customer with you, then your growth team should invest more in customer success.
It’s also important to remember that stickiness is a transactional factor. So existing customers bring repeat business because of a specific convenience or value they derive from the purchase.
Why customer stickiness matters
Every time a buyer purchases from you, there is a chance that they will buy from you again. A study by Bain showed that, on average, repeat customers in the apparel business spend 67% more in the third year of their relationship with a brand than thee first 6 months.
Similarly, apparel shoppers spent 80% more on their 10th shopping compared to their first.
Clearly, customer stickiness has a direct impact on revenue. But there’s more.
Reduces customer churn
Sticky customers need a strong reason to switch to competitors. Until they find higher value elsewhere, they will continue to do business with you, and even increase their spend, reducing churn.
Increases customer lifetime value
Sticky customers are more likely to turn into loyal ones (again, more on this later). As a result, they tend to spend more over time, generating a much higher return on investment on the customer acquisition cost (CAC).
Lowers customer acquisition costs
It is 5x more expensive to acquire new customers than to retain existing ones. So, your best client acquisition strategy is, ironically, building customer stickiness.
Increases referrals
A sticky customer is likely to refer friends and family, compounding their lifetime value.
Creates a competitive advantage
High levels of customer stickiness can help businesses differentiate themselves from their competitors and create barriers to entry for new players in the market.
If that sounds just like client retention strategies, let’s disambiguate.
Customer stickiness vs. retention vs. loyalty
Stickiness is when an existing customer purchases from a business repeatedly because they find value. This is typically highly sought after in industries like retail, where customers buy multiple times a year.
If you always choose your nearest grocery store, despite there being a larger one a few miles away that offers better prices, you’re sticking with it because of convenience. This is the value responsible for customer stickiness.
Retention is when a customer chooses to stay with a business each subsequent time they make a purchase. This is commonly used in SaaS and subscription-based businesses.
If you choose to renew your X (formerly Twitter) Premium subscription each month, you’re a retained customer!
Loyalty is when you have a strong emotional connection with the brand and buy its products irrespective of competitive alternatives. Apple is among the most successful brands in this area, with customer loyalty rates of 93%.
If you are passionate about a brand, believe in its values, and only buy its products, you are a loyal customer of that business.
Here are the key differences between customer stickiness, loyalty, and retention.
| Customer stickiness | Customer retention | Customer loyalty | |
|---|---|---|---|
| Definition | A customer purchases repeatedly because they find value | A customer buys a subsequent time (without regard for why) | A customer buys repeatedly because they have an emotional bond with the brand |
| Measured as | % of customers who buy again (segregated by perceived value) | % of customers who buy again | % of customers who are loyal (typically evaluated through surveys) |
| Contributing metrics | Daily active users Session duration Email open rate | Net promoter score customer lifetime value Engagement index | Net promoter score customer lifetime value Engagement index |
| Commonly used in | Retail and financial services businesses | Subscription and SaaS businesses | Few big and differentiated brands |
| Improved by | Demonstrating value | Keeping up engagement | Creating differentiated experiences |
Measuring customer stickiness with six effective metrics
A sticky customer is one who buys again, but a business can’t keep waiting for the customer to return. It is important to have metrics that show customer stickiness throughout the customer lifecycle.
Here are a few to begin with.
1. Active users
Daily Active Users (DAU) and Monthly Active Users (MAU) are key metrics in the world of SaaS. Both measure the number of unique users engaging with your site or app during the respective periods.
If an app has been installed 10,000 times and 4,000 users interact with it daily, the DAU will be 4,000. A high number of active users indicate strong product stickiness. In other words, many users find your site valuable enough to return regularly.
2. Stickiness ratio
In SaaS, stickiness is typically measured as the ratio of DAU to MAU. If your DAU is 4000 and MAU is 2000, your stickiness ratio is 2.
For apps that you use every day, like email, social media, or games, this metric works well. However, if your product is designed for monthly use, like payroll software, adjust your stickiness ratio formula to monthly active users/yearly active users.
3. Customer retention rate
This is a straightforward metric.
CRR = (Number of customers at the end of a period – number of newly acquired customers)/number of customers at the start of the period.
If 80% of users who paid for your app are still using it at the end of the year, your yearly retention rate is 80%. Any customer retention software will calculate this by default.
4. Open and clickthrough rates
A sticky customer pays attention to the communications you send to them via email or social media. The % of emails they open or their clickthrough shows how likely they are to make a purchase soon.
5. Lness distribution
Lness distribution is used to map customer stickiness over time. It measures the number of days a customer used your products in a given time frame.
If a user visits your site or app 22 out of 28 days, Lness is 22.
6. Time between purchases
In industries like retail or beauty, time between purchases is a key metric for customer stickiness. The lower the time between purchases, the higher the stickiness.
The baseline for the metric varies depending on the industry. For instance, in a beauty salon, 30 days is a reasonable time between purchases. In the investment sector, yearly purchases could be the norm.
Once you have an understanding of your customer stickiness, here are ways to improve it.
Summarize this article for me pleaseStrategies for Increasing Customer Stickiness
To improve stickiness, start with the basics. Set up a robust CRM software like ClickUp to consolidate all customer data. Use this to:
- Know your current customer stickiness ratio based on any of the above metrics
- Segment your customers and understand the differences between each group’s stickiness
- Speak to key customers to understand the value they most cherish and that keeps them coming back for more
- Set benchmarks and corresponding goals
With the foundation set, let’s execute some strategies to increase customer stickiness.
1. Focus on service
Customer stickiness depends on the specific value you offer to the buyer. This could be price, user experience, 24×7 support, etc. This may seem like a no-brainer, but remember that customers stick to the brand only as long as this value is continuously provided. To ensure you’re regularly demonstrating value, focus on service.
A sure-shot winning strategy is to offer exemplary service through high-touch onboarding. Understand the customer’s goals and focus the onboarding around this core value proposition. Eliminate friction in the customer journey. Provide personalized support in the form of guided tours, tutorials, resources, and live chats.
Warby Parker, a famous eyewear brand, did exactly this with its try-at-home model. Customers can order up to five frames from their website, which will be mailed to them to try on, all free of charge. The unique shopping experience disrupted the existing eyewear market and improved stickiness.
To design a world-class customer service practice, lay down a strong technological foundation.
- Set up a robust CRM for visibility, collaboration, and automation
- Use ClickUp for Customer Service to consolidate client information, prioritize tasks, address concerns, and collect feedback all in one place
- Set up ClickUp Automations to improve efficiency on customer service tasks
- Spin up ClickUp Brain to brainstorm ideas, summarize notes, and find answers for anything project-related
For an extra spark, integrate AI tools for customer service and get more done effectively.
2. Collect feedback and analyze
As we’ve said above, the primary difference between retention and stickiness is ‘why.’ So, invest in customer insights to improve stickiness.
Review your existing data
Before you go to the customer for insights, scour through all the data that you already have.
- Your CRM or customer success software will have information about the customer, their interactions, and tickets they’ve raised with your business
- Google analytics or app analytics will show customer behavior on the website/app
- Social media platforms will tell you what customers are saying about your product/service
- Review sites will shed light on customer feedback and what’s lacking in your product/service
If you’re using ClickUp, you’ll also have customer service management-related insights. With ClickUp Dashboard, you can easily visualize deal sizes, tasks, survey responses, tickets, KPIs, and more!
Collect all this data and deepen your understanding of the customer. Then, reach out to them and seek feedback to validate what you’ve learnt.
Collect feedback regularly
Use interviews, surveys, and observational research to identify feelings and behaviors that are not understood in your research.
Use the product feedback survey to ask customers what the ‘value’ is that makes them stick. Give them multiple-choice questions to validate or negate your hypothesis of brand value.
Using ClickUp’s Customer Satisfaction Survey Template helps set the baseline for how your customers feel about your product.
A Net Promoter Score (NPS) survey might ask, “On a scale of 1-10, how likely are you to recommend this product to family and friends?” You might ask similar questions to understand how likely the customer is likely to return to your product.
The ClickUp Net Promoter Score Survey Template is a great beginner-friendly framework for conducting customer surveys.
Exit surveys are a great tool as well. Deploy your exit surveys on checkout pages or pages with the maximum bounce rate. Use the insights to understand what’s causing churn.
Looking for something else? Choose from ten unique feedback form templates and customize them for your use case.
Learn from the naysayers
You learn as much, if not more, from negative feedback than positive feedback. Reach out to customers who have left negative feedback on your app or have complained about your brand on social media. Ask them why they’re unhappy to gauge what will help you retain customers.
Act on feedback
Respond immediately. Acknowledge the feedback and show them you value their input. Explain how you will follow through on their feedback. This helps manage client expectations better.
3. Develop a strong brand identity
When your unique selling proposition (USP) matches the value the customer seeks, you have the perfect recipe for stickiness. To improve customer stickiness, work on your brand identity. Here’s how.
Define your USP
Your USP is the key differentiating factor that makes your brand valuable to your customers. It needs to be assertive and defendable.
For instance, Domino’s USP is fresh, hot pizza in 30 minutes or less, or it’s free. A sticky customer values getting hot pizza delivered quickly.
Align USP
Once you’ve defined your USP, align it with what customers seek. Make sure it:
- Addresses customer pain points, challenges, and goals
- Speaks in the language of the prospective customer
- Differentiates you from the competition
Communicate your USP
Communicate your USP clearly across all touchpoints—branding, product, marketing, sales, etc.— test it with customers, refine, and adjust.
The ClickUp Product Positioning Template makes it easier to analyze your product’s competitive position and identify the best strategy for long-term success.
Bonus: Here is more on customer communication management to help you with developing your brand strategy.
4. Leverage customer engagement models
While customer stickiness relies on the value you offer the buyer, engagement plays a key role too. For instance, a customer who receives, opens, and clicks through your email campaign, is more likely to be sticky.
Personalize experiences: Personalize content, services, and interactions based on customer data and preferences. Anticipate needs and provide relevant recommendations.
For example, send an email when a product in a customer’s wishlist is back in stock or on discount.
Unify experiences: A customer’s experience across channels needs to be seamless. Empower customer-facing teams with all relevant data to provide the same standards of service regardless of department.
For instance, if a customer moves from the website to a mobile app and pings on chat, the conversation should continue organically. Collaborative CRM tools handle these exchanges effortlessly for cross-departmental communication and data sharing.
Deliver valuable content: Entertainment is a great way to improve customer stickiness. Try gamification, quizzes, and contests to add value to the customer experience. Integrate multimedia content into customer lifecycle marketing strategies.
💡 Pro Tip: Try these ClickUp’s ChatGPT prompts for gamification to increase customer engagement!
5. Educate the customer
In the Internet era, one of the most successful strategies for customer stickiness is education. Brands like Hubspot built their entire inbound marketing engine with educational content around marketing, sales, and customer relationships.
So, include educational content as a part of your customer lifecycle management strategy.
Create content: Build a consistent content practice that offers education around related topics. Use this content to create stickiness among customers and prospects alike.
Nurture the community: Bring a community of prospects and customers together for events or conferences to learn more about your product. Encourage customers to spread the word among their peers and social media.
6. Offer incentives for stickiness
Today’s markets are filled with products and services, with new ones appearing every day. Sometimes, even a previously sticky customer might need an incentive to stick around.
Offer rewards: Loyalty programs do a great job of this by giving points for each purchase, encouraging customers to buy more. You can also offer benefits like free home delivery, free goodies, birthday discounts, etc. to keep customers sticky.
Double down on value: Build your rewards around the value that satisfied customers seek from you. For instance, Costco doubled down on its core value proposition—best quality merchandise at the lowest price possible—with its membership-only big-box warehouse club. In 2022, it had a 93% membership renewal rate, denoting extremely high stickiness.
Customize rewards: Make rewards relevant to the customer. Customize them based on purchase history, engagement, lifetime value, demographics, or customer data.
Using advanced data analytics, you can personalize communication based on segment. Predictive models can forecast customer behavior, allowing you to create rewards with higher chances of success.
Managing multiple personalized loyalty programs or rewards initiatives can be daunting. So, we’ve brought help. Use the ClickUp Managing Multiple Engagements Template to:
- Visualize tasks across multiple engagements
- Prioritize workloads to ensure deadlines are met
- Organize resources and collaborate with teams in real-time
7. Embrace the subscription model
The software industry has almost entirely moved to the subscription model with SaaS. Inspired by their success perhaps, organizations across industries, like dog-food company BarkBox and healthy snacks business, SnackNation, have taken this route.
Studies find that 75% of direct-to-consumer (DTC) brands might go subscription-based soon, and with good reason. The subscription model favors businesses that offer a sticky value proposition. It helps convert customer stickiness into demonstrable business revenue.
Summarize this article for me pleaseGo from Stickiness to Long-term Loyalty with ClickUp
The greatest value Russel Crowe’s character offers in The Gladiator is entertainment. Yours might be efficiency, cost savings, ease of use, physical proximity, customer service, or good-old innovation.
To maintain the stickiness of your customers, you need to identify the value that they prize most and build on it. This needs a customer stickiness strategy, accurate customer data, and a robust CRM.
In this article, we explored seven tried-and-tested strategies to improve customer stickiness. For customer data and a CRM, consider ClickUp.
With a highly adaptable functionalities, customizable templates, and numerous data-driven features, ClickUp is the springboard you need for customer stickiness. Go from stickiness to loyalty to customer advocacy. Try ClickUp today!
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