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How to Improve Customer Retention with Competitive Intelligence
Turn competitor insights into action and become the champion of customer retention!
Imagine being a soccer player who never studies the other team's game plans, a chef who never samples from other kitchens, or an artist who doesn’t study masters in their craft.
Trying to conduct business without the help of competitive intelligence is just as risky.
Competitive intelligence gives you a clear view of what your competitors are doing, how they're succeeding, and where they might be falling short.
By understanding their strategies, you're not just keeping pace but discovering opportunities to innovate and get ahead.
It's like gaining a superpower to foresee market trends, adjust your strategy proactively, and stay nimble. Competitive intelligence isn't about imitation; it's about gaining insights that drive your unique path to success!
But what does competitive intelligence have to do with customer retention? We’re glad you asked! :)
We’re about to discover why customers churn, how to gather competitive intelligence, and how to create and use Battlecards to increase retention.
Why Customers Churn
According to some studies now out of date and no doubt underestimating the current impact of retention, increasing customer retention rates by 5% increases profits by 25% to 95%. But what causes customers to churn? And what should we look to learn about each potential reason as it applies to our competitors?
Poor Customer Service
If don’t feel valued as a customer, or your problems aren't addressed quickly and successfully, you look for alternatives. Your customers do the same. You want to know, not only how your customers feel about your own customer service, but how people feel about your competitors’ customer service.
If a product or service falls short of expectations, customers churn. What are people saying about the quality of your product? Your competitors’ products?
Lack of Value
If your customer feels they are paying too much for what they’re getting, they move on. Especially if your customer offers a less-expensive option for the same features. Do they?
Lack of Engagement
When customers stop engaging with products, services, educational content, and other touchpoints, the lack of interest often ends in churn. This is one you can only evaluate for your own business, but recapturing attention is key to increasing retention.
If your product or service no longer meets the needs of your customer, they may move on. This isn’t always something you can control. Business priorities, staffing, and budgets change. But an increase in churn for this reason could also signal a slipping product-market fit.
Does your product or service still fit the way people work today? Does your competitors'?
If your competitor releases a more appealing product - whether in terms of quality, price, service, or for any other factor, you can expect your customers to notice. Keeping on top of new competitors and new features of competitor products is key.
Difficulty in Setup or Product Usage
If your product or service is complicated to use and your customers don’t feel adequately supported and successful, they'll likely stop using it. Conversely, if your product is easy to use and a competitors’ product isn’t, this is often a powerful differentiating factor.
Harnessing The Power of Competitive Intelligence to Improve Retention
When you understand your competitors, you can proactively identify and address the areas where your own business may be falling short, leading to customer churn. These insights can inform effective product roadmaps.
On the other hand, knowing where your own strengths lie allows your sales and customer success teams to better compete for new deals and keep the customers you have. Some basic insights you’ll want to collect for all your teams include answers to questions such as:
- Do customers perceive that your competitors’ customer service is better than yours? Or maybe yours is better than theirs!
- Do your competitors offer a feature that your customers want? Or perhaps there’s a feature of your product that customers wish your competitor had.
- Has a competitor changed their pricing? Are you now the most or least expensive?
When you know that, you can make strategic decisions to improve your own business and product, keep your customers happy, and improve retention. But where do you get this information?
- Keeping up with competitors' user reviews can provide invaluable insights into the level of satisfaction with customer service. Tip: On sites such as G2, you can filter reviews by keyword. Try searching “customer” or “support.”
- Customer reviews and conversations in forums and on social media reveal patterns in mentions of favorite product features.
- Watching a company’s website and social media can help you spot updates to pricing or special offers.
Competitive intelligence isn't just nice to have—it's a critical tool in your kit to reduce customer churn!
Increasing Retention One Customer at a Time
Beyond proactively making sure your business is the best choice for your customers, you can use what you know about competitors to react when it seems a customer is ready to churn — especially if you know which competitor they’re considering.
Watch as Rebecca attempts to keep a customer who plans to leave for a competitor.
Notice that while Rebecca used competitor weaknesses to make a point, never did she aggressively call out the competitor. Throughout, it remained clear that her goal was to make sure the customer had the information she needed to make a good decision.
Rebecca gave her customer valid reasons to reconsider leaving. But that was only possible because she had up-to-date competitor information at her fingertips. Here, Rebecca used a Battlecard for quick on-the-go insights.
Will her customer stay? Would you?
Creating a Battlecard for Improved Customer Retention
Battlecards are playbooks sales reps use to prepare for and improve sales calls. They commonly feature competitor strengths, weaknesses, feature and pricing comparisons, recent customer reviews, answers to common questions and objections, and more.
Our marketing team developed awesome scorecards that provided easy-to-interpret snapshots of our biggest competition. I used this heavily when I was in a CSM role and needed to understand where customers were coming from when they wanted to switch to a competitor. It helped me have natural conversations about the pros and cons of both. - Emily S., Sr. Manager, Vendor Operations, via Capterra
Your sales Battlecard could work for retention, or you might make one specifically for that purpose. One of our customers is in a highly-competitive industry where they have a premium product sold at a premium price. They use Kompyte competitive analysis and Battlecards for customer retention.
Here’s what your customer retention Battlecard might look like if your competitor were the fictional company HiveHR.
Next Steps to Improving Customer Retention with Competitive Intelligence
Making full use of competitive intelligence can be your secret ingredient, helping you find and fill the gaps causing your customers to consider other options.
We've explored the main causes of customer churn — from poor customer service to the appeal of competitor alternatives — and how to find and harness competitive intelligence to counter these.
But, the real game-changer lies in the power of a Battlecard. This handy tool can provide real-time insights about your competitors, arming you with powerful arguments to convince customers thinking about leaving to stay.
Think of Battlecards as your retention superheroes, ready to swoop in when customers are on the brink of churning.
Now it’s time to act! Put these insights into practice and craft your own Battlecard. Become the champion of customer retention for your business, one customer at a time.
Let's get started and show customer churn the exit door!
And stay tuned for more real-life use cases for competitive intelligence. Scroll on up to the top of the post and subscribe if you don’t want to miss it!