Effective customer retention strategies driven by APIs

Finding new customers is among the greatest challenges businesses face. Advertising, PR campaigns, developing content, search engine optimisation, and all other techniques that help organisations find their audience are costly, laborious or both. Nevertheless, organisations frequently prioritise the goal of obtaining new clients over the more efficient task of nurturing those with whom they have already established a relationship. 

Research has shown that acquiring a new patron is five times more expensive than getting an existing customer to make a purchase.1 It has also been revealed that 80% of businesses’ profits are attributable to 20% of their existing clients and that increasing customer retention rates by just 5% increases profits by as much as 95%.2 Within testing economic environments such as this, no revenue stream can be ignored, least of all one with such potential.

Having fully justified the ‘why’ it is, of course, apt to discuss the ‘how’. In this case, I want to discuss some of the various ways application programming interfaces (APIs) can help businesses nurture existing clients and drive increased sales. Let’s start with a short definition of what APIs are and what they do.

What are APIs?

APIs are platforms that allow different applications to communicate with one another and share information. They do this by harmonising languages and protocols; imagine a device that allowed single-language speakers of Spanish, Russian and Mandarin to understand one another whilst continuing to use their native tongues. This fictional technology – popularised in science fiction texts such as Hitchikers’ Guide to the Galaxy and Star Trek – provides a simile that effectively summarises the basic function of an API.

As they provide various platforms with a means of sharing information, APIs can be used to create powerful functions and capabilities that can improve organisational performance. Here, we’ll consider how they can be used to improve customer retention.

Personalise customer experiences

Surveys have revealed that consumers regard personalisation as the key to a better user experience. In spite of this, they and those working within the marketing profession overwhelmingly agree that organisations fail to offer adequately tailored experiences.3

Whilst data plays a key role in determining customers’ needs and desires, it alone cannot deliver the experience that consumers crave. Team it with analytical tools, the right algorithms, and customer relationship management (CRM) software, however, meaningful personalisation is eminently achievable.

With effort and refinement, organisations can identify which goods are likely to appeal to groups of customers and create ‘audiences’. When a product or service that is likely to be of interest to them is introduced, discounted, etc. they can be automatically informed. This can be done via email, a notification pushed to a smartphone, SMS message or other mediums depending on the customer’s preference for an additional layer of personalisation.

Sharing internal data concerning customers with a CRM can also be used to send automated messages on important dates. You could, for example, offer a client a discount code on their birthday or the anniversary of their first purchase.

Looking to improve your customer communication

Maintain e-commerce channels

If a website, application or even social media platform that is used to generate online sales ceases to function correctly, the affected organisation inevitably loses revenue. Studies have shown that loading times of more than three seconds will lead to 90% of all prospective purchases being abandoned.4

Ensuring that the channels that generate e-commerce revenue are optimised and functioning correctly is therefore of the utmost importance. Various applications can monitor their performance and these can be used to identify problems, but multi-channel approaches complicate monitoring procedures and problems can persist for hours or even days before they are identified.

Feeding key metrics gleaned from these multiple sources into a single interface provides the means to identify problems quickly. Where metrics provide clear evidence of poor performance, automated notifications can even be sent to relevant stakeholders to achieve immediate identification.

Convert missed opportunities

Just under 70% of online shopping carts are abandoned before a purchase is made. When a cart is abandoned by an existing consumer, though, APIs provide means of enticing prospects to complete their transaction.

If a user has purchased from a website, app, etc. previously, the organisation in question will have their email address. If APIs and cookies are leveraged successfully – and lawfully – then it will be possible to identify an abandoned cart if the user in question was logged into their account or not.

This information can be used to send them a reminder of the fact that they didn’t complete their purchase along with an incentive to do so, such as free delivery. Studies have shown that 45% of users view such messages, that 21% interact with them further and that half of these users go on to finalise their purchases.6 This means that implementing such a tactic could see your organisation transform roughly one in ten abandonments into sales.

Improve customer service

The need to continuously inform representatives of a problem after they’ve contacted a company is amongst customers’ greatest bugbears.7 API integration can ensure that a variety of information pertaining to a customer is available to all representatives across all departments. Pulling information from a variety of sources, concerning prior orders, email messages, app usage, etc. into a user interface can provide reps with all of the information they need to resolve complaints quickly and at the first point of contact.

By allowing such an interface to communicate with dialler software that automates incoming call processes, agents can even be shown pertinent information concerning the customer before their call has been answered. This, if combined with analytics and algorithms, can ensure the agent has been informed of potential issues before they speak to the customer. In turn, the customer is likely to enjoy the speediest resolution possible.

Secure cross-platform communication

As I’ve stated previously, organisations typically now allow customers to interact with them through numerous digital platforms. Websites, mobile applications, SMS messages, Live Chat, etc. are just a few examples.

Should a customer need to identify themselves each time they use a different platform, frustration is the likely outcome. APIs can allow various mediums to communicate with one another and, as a result, share pertinent information about the customer such as their name, contact details, etc. and improve cross-platform experiences.

  1. Forbes (2018) Don’t Spend 5 Times More Attracting New Customers, Nurture The Existing Ones
  2. ReSci (2020) Customer Retention Should Outweigh Customer Acquisition
  3. Retail Customer Experience (2020) Survey says consumers want personalized experience
  4. HostingTribunal.com (2018) 21+ Website Load Time Statistics and Facts
  5. Baymard Institute (2019) 41 Cart Abandonment Rate Statistics
  6. Moosend (2020) Shopping Cart Abandonment Stats You’ll Need for 2020
  7. HubSpot (2020) The 8 Types of Customer Complaint You’ll Get & How to Resolve Them 


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