Using Personalization to Retain Customers Like Spotify

Long-term consumers are more important to your business's success than you would imagine. According to a Harvard Business School research, boosting client retention rates by only 5% may increase earnings by 25-95 percent.

Customer retention costs about 5 times less than bringing new clients within your cover when compared to the cost of customer acquisition.

However, if you don't concentrate on brand loyalty, you'll miss out on company development. You have an advantage over your competition when you can build a pool of clients that are loyal to your brand.

This saves you money on customer acquisition expenses. Customers help you advertise your business by sharing positive word about your product and service.

But how can you maintain a relationship with your consumers so that they return? Spotify, a music streaming service, excels in retaining consumers. And we've gone into great detail to see how they do it.

Spotify is a huge hit

Spotify, which was started in Sweden in 2006, is still doing strong. Despite having more rivals on the field, they are increasing client retention. Spotify has 172 million premium customers globally in Q2 2021, up from 172 million the year before. Since 2017, Spotify's subscriber base has almost doubled.

That's why we're swooning over Spotify's client retention plan this month. Here are a few reasons why we respect Spotify's approach to customer service.

1. Spotify places a strong emphasis on consumer onboarding

Client retention at Spotify begins from the beginning of the customer relationship. They provide new users a list of reasons to stay around right away. Although Spotify is free to use, paying for a Premium membership provides customers extra features.

Premium customers may listen to music ad-free, choose any song they want to listen to, skip tracks, and download music and playlists, which are the key distinctions between a Premium account and an unpaid one.

Even with all of these benefits, Spotify can't assume that once a consumer upgrades to Premium, they'll want to keep paying for it indefinitely. Customers must be reminded of what they are paying for and why it is worthwhile.

Spotify engages clients right away and introduces new users to the product's capabilities. When a new client joins up for a Premium membership, for example, they get a customized email outlining all of the features they now have access to exclusively.

An efficient onboarding program demonstrates both the value of your product or service and your appreciation for your consumers. After clients join up, subscribe, or make a purchase, make sure they feel welcomed. This warm welcome helps you to provide a strong basis on which to develop your brand connection.

2. They place a premium on excellent customer service

Assume you're at your workplace, headphones on, and working on your project. You're trying to stay attentive when your music unexpectedly stops playing. Ugh.

You're now spending time refreshing the app and browsing the internet to determine whether it's just you or if it's a system-wide problem. Your job is being disrupted, and you're wondering why you're paying $9.95 a month for Premium Spotify.

Any online streaming service is at danger of experiencing a dreaded downtime. Customer retention is dependent on your customer support personnel during these times of instability. Even in the midst of a crisis, Spotify manages to satisfy its consumers.

Following an outage, Spotify reacted quickly to all consumer complaints across all platforms. Even after the issue was resolved, Spotify customer support representatives made it a priority to contact each consumer who had submitted a message.

In the aftermath, one client commended their quick assistance and her entire Spotify experience. Spotify acknowledged her with a tailored playlist that included a secret hidden message in the song list in response to her tweet. Even when things go wrong, Spotify provides a personalized, one-of-a-kind client experience.

3. They personalize the consumer experience as much as possible

You might say Spotify is obsessed with its customers. They're experts in collecting client data and applying artificial intelligence to provide the most personalized experience possible. Furthermore, since Spotify is based on customisation, it adapts to each customer's interests and demands.

Here are a few examples of how Spotify personalizes your experience:

  • They keep a close eye on what clients listen to on the site.
  • They provide customised suggestions based on information gleaned through listening.

Spotify's tailored playlists adapt to the changing tastes of its users.

Spotify use artificial intelligence to provide the appropriate material to the right user at the right time. Above all, they utilize it to ensure that each Spotify client receives a personalized experience tailored to their preferences. Every Spotify user gets a unique dashboard.

Instead, every day, each user receives a new and unique "Daily Mix" playlist, as well as specific "Discover Weekly" lists that propose music based on their listening patterns. Customers may now get playlists tailored based on their prior listening habits in the app's "Made for you" section.

Spotify makes use of consumer data to help users find new material. This not only helps clients feel acknowledged, but it also provides them with a unique advantage that other music streaming services can't match. It's difficult to go away after experiencing such unique connections.

4. Customers are rewarded for sharing their Spotify experience

One of Spotify's most popular features (and finest marketing technique) is "Spotify Wrapped," which combines AI with consumer data. At the conclusion of each year, Spotify Wrapped, which is defined as "the story of your year with Spotify," is released. To wrap out the year, it provides each consumer with a detailed report on their listening habits over the preceding 12 months.

"Wrapped is a deep dive into the artists, songs, and podcasts that defined your 2021," Spotify said in its ads for Wrapped 2021. When we debut later this year, the more you listen, the better your Wrapped will be."

These animated reports take you down memory lane by displaying the number of minutes you've spent listening, as well as your favorite artists, songs, and genres. Furthermore, you may easily share your Spotify Wrapped with friends through social media.

Every year, users share their Spotify Wrapped reports with their friends, joking about the ridiculous amount of time they spent listening to Spotify. Following that, they eagerly accept mockery for the humiliating truth that all of their #1 songs were by Taylor Swift.

Customers want to tell others about their Spotify experience. As a result, Spotify incentivizes users to create social media content, organically promoting the brand and assisting Spotify in expanding its brand presence among possible future consumers.

Thanks to Laura Krajewski at Business 2 Community whose reporting provided the original basis for this story.

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