Why Every Lost Customer is a Lesson Learned with Gen AI
On my first day consulting for a D2C startup, I found myself in their brightly lit office alongside the founder, both of us fixated on the significant dip we were observing from ‘Add to Cart’ to ‘Purchase’. For a moment, I was transported back to my school days, learning about the Mariana Trench, and couldn’t help but draw parallels between that deep abyss and the drop in sales we were witnessing. Despite the founder’s wish to simply will it away, this “Trench” had been deepening over the last six months, and he was at a loss about what was causing it. I half-joked to him that despite my extensive experience in digital marketing, I lacked the ability to read minds, eliciting a half-smile in response. I then suggested we have his team call around 500 customers who had abandoned their carts. What we learned from this exercise was both profound and fundamentally simple, leading to such a significant change that our monthly targets began to be met within just two weeks. (Connect with me one-on-one to learn more!)That got me thinking that in the ever-so-busy world of e-commerce, much of our attention is towards the customers we manage to bring onboard. We scrutinize their Customer Acquisition Cost (CAC), their Lifetime Value (LTV), and how they came to us, Attribution. But there’s a crucial piece of the puzzle that often gets overlooked: The Customers We Lose Along The Way.Imagine you’re a customer shopping online, adding items to their cart but then, for some reason, they decide not to buy. Or maybe they make a purchase once but never return to buy again. These scenarios are more common than you might think and they represent a goldmine of insights for brands that are often left unexplored. The Missed Opportunity in Understanding ‘Why’ Most companies are good at tracking the ‘what’ – like how many customers they’ve lost or what their churn rate is. But understanding the ‘why’ – why a customer decided not to buy or why they didn’t come back – is where the real treasure lies. This is where Generative AI comes into play and where we, at mPrompto, are making strides. The Generative AI Difference By leveraging Generative AI during the customer onboarding process, we at mPrompto have developed a unique approach to not only understand what a customer wants but also why they want it. This insight allows brands to tailor their communication more effectively and gain a deeper understanding of their customers’ needs and motivations. The Benefits Unlocked for Brands Improved Customer Service: Understanding the specific reasons behind a customer’s dissatisfaction enables you to address these issues directly, leading to better customer experiences. Reduced Churn: By proactively addressing concerns and improving the customer experience, you’re more likely to retain customers. Price Elasticity Check: Insights into why customers might be sensitive to price changes allow for more strategic pricing decisions. Product Improvement: Direct feedback on products helps in making necessary adjustments and innovations. Untapped Customer Insights: Learning from lost customers can reveal new market opportunities and customer needs that haven’t been met. Marketing Teams as Custodians of Customer Relationships By focusing on the ‘why’ behind customer behaviors, marketing teams can transcend their traditional roles. They become guardians of the customer experience, armed with insights that can drive the company forward in more customer-centric directions. The Bottom Line Every customer lost is indeed an insight gained. With the advent of Generative AI, the e-commerce landscape is poised for a transformation. By understanding not just what our customers do but why they do it, we open the door to unprecedented growth and connection. In the end, it’s not just about recovering lost customers but about learning from them to prevent future losses. This shift in focus from the ‘what’ to the ‘why’ is not just a change in strategy but a revolution in understanding customer relationships. And with Generative AI, we’re just getting started. Author – Ketan Kasabe, Co-founder: mPrompto