It’s 5 times cheaper to keep a customer you already have rather than acquire a new one. You don’t need to invest time in building a new relationship with someone you already have in place. It’s much simpler to maintain a connection with your best friend than to begin the process from scratch. This is also true for keeping customers.
Customer retention is essential for any company, but it’s especially important for companies that sell online. Since you’re operating an online store, meeting clients in person is difficult. The inability to form face-to-face connections can lead to customer disengagement.
Don’t fret; There are plenty of methods to keep generating leads and improve the retention of customers. If your company wants to keep more customers in the door, take these steps to guarantee customer loyalty.
Table of Content
- 1 What is customer retention?
- 2 What is the customer retention rates?
- 3 Why is customer retention important for e-commerce?
- 4 How to Retain Customers
- 5 The 8 best customer retention strategies for e-commerce brands
- 5.1 1. Customer experience
- 5.2 2. Create a loyalty program
- 5.3 3. Create a marketing SMS campaign.
- 5.4 4. Offer customers exclusive deals and offers
- 5.5 5. Survey your customer base
- 5.6 6. Personalize email messages (and all other things)
- 5.7 7. Optimize your digital marketing campaigns.
- 5.8 8. Provide guidance and information that can add value.
- 5.9 Related
What is customer retention?
The term customer retention is a measurement that measures customers’ loyalty or the capacity of a company to retain customers for an extended time. Apart from determining the number of loyal customers, retention can also indicate or predict the satisfaction of customers, repurchase behaviour, customer engagement, and emotional connections to the brand.
Although the customer relationship typically begins with the first interaction with a customer, the customer retention metrics are based on the buyer’s initial transaction and include subsequent interactions. When customer retention is determined, the business can then use the data to analyze the various components of customer satisfaction and customer satisfaction. For instance, if a decline in customer retention is observed, the company can utilize this data to identify the reason behind the drop and modify the product offerings.
Customer retention is essential as the cost to acquire new customers is significantly higher than keeping existing customers. They are also more likely to participate in marketing via word-of-mouth or even become brand ambassadors.
What is the customer retention rates?
The customer retention rate is the number of customers a company can keep with time. If your online store retains customers, you’ll notice a lot of positive outcomes.
Customer Retention Rate formula
One method of calculating retention rates is by looking at the percentage of shoppers who purchased for a specific time in the past that are still active.
For example, if a thousand customers bought from you 12-24 months ago, and 200 of them returned to shop in the past six months, the retention percentage would rise to 20 %
Monitoring the monthly or quarterly retention rate of your customers provides a measure of how well your strategies for increasing customer loyalty are paying off .
Why is customer retention important for e-commerce?
Instead of discussing the necessity of customer retention in the world of ecommerce, what about some facts that are hard to ignore?
It costs five times more to bring in a new customer than to keep an existing customer.
Repeat customers earn three to seven times more revenue per visit than first-time visitors.
It’s 50% more effective to market to a customer who is already a customer rather than to brand new customers.
A 5 % increase in customer retention could boost the company’s profit margin by 25-95 %
82% of businesses believe that retention of customers is more cost effective than acquisition.
How to Retain Customers
1. Create a strong onboarding experience.
When a customer purchases their first item, and your company is given a chance to make an unforgettable impression, ensure that your onboarding process runs well.
Customers are likely to remember any issues with customer service during their initial arrival, such as not properly handling details or having no designated contact person to assist them in the initial. While your company may be able to swiftly resolve the conflict, it can leave a bad taste in your customer’s mouth.
2. Give customers a customized experience.
Each customer has identical needs and could be looking for customized solutions from your business. Therefore, it is important not to offer the same-sized solutions to customers who require products and services tailored to different needs, sizes, time limits, sizes, or other requirements.
Your offer should be appropriate and specific to each customer’s needs to ensure that your solution is most effective for the issues they’re confronting. They’ll be more likely to keep dealing with you because of the attention to detail your company provides.
3. Create trust with your customers.
Two things are guaranteed in the process of building trust between your business and your clients:
First, don’t presume they trust them because they bought from you. It takes time to build trust.
In the process of making purchases, 81% of consumers declare trust is a major factor in their purchase. Trust is an essential element in their purchase. Trust isn’t a universal method that any business could implement in a matter of minutes. In the end, the term for trust includes “firm belief in the reliability, truth, ability, or strength of someone or something.” Reliability is essential in creating trust, which is why your company must always provide quality to your customers.
Continuously delivering on your promise to customers and executing what you promise to keep doing over time will determine how your customers see your brand as trustworthy.
4. Create a feedback loop for customers.
It’s tough to make improvements in your business without knowing how your customers perceive it. In order to keep your customers, there must be a method to gather feedback from your customers and then share the information with other members of your business. This is where the customer feedback loop is a key element. It is a method of gathering, analyzing, and disseminating reviews from customers and surveys.
There are many ways to gather feedback from your customers. The most commonly used method is through surveys such as Net Promoter Score(r), or it is possible to ask customers to take part in user testing or focus groups. Utilizing these strategies regularly can give your team plenty of relevant customer feedback.
5. Maintain a customer communication calendar.
If your customers don’t have a chance to provide feedback, your staff should be on the lookout for ways to communicate with them. If they haven’t been in touch with your brand in a while, then you must reach out and reconnect with them. You might consider implementing a calendar of communications to monitor customer engagements and provide opportunities for upselling and cross-selling.
The 8 best customer retention strategies for e-commerce brands
Here are five e-commerce strategies to retain customers that you can count on:
1. Customer experience
Is there anything better than a fantastic pair of sneakers? A pair of great shoes and a wonderful customer experience.
When it comes to a fantastic customer experience, there’s no limit to the limit. A large portion of the customer experience is created to ensure that the purchase is made. But this is the area where brands can get a little off track. The post-purchase experience is just as vital.
As we’re talking about retention of customers, It makes sense to frame it by what occurs after you click the purchase click. An easy shortcut for this is to research the post-purchase programs which can help you accomplish things such as:
- Automated Returns
- Collect customer reviews
- Send out emails following purchase
Making a customized method to improve customer service can be costly, but it could be beneficial if you’re an established company. Begin by exploring the various apps mentioned above. You can also check out 10 methods to enhance the customer experience to get more ideas.
2. Create a loyalty program
Customers are awestruck by freebies. They will stay longer when you offer them rewards. A loyalty program can be an excellent way to keep customers interested.
There’s no end to the possibilities with loyalty programs. Customers can be asked to review their experiences, post reviews on social media, or share their experiences via Facebook, Twitter or even post the links to your online store on their sites.
While they’re busy collecting points before cashing, it is increasing the loyalty of your customers, which will lead to retention of customers, and increase the chance of getting those sought-after repeated purchases too.
3. Create a marketing SMS campaign.
It’s becoming more accepted to utilize SMS marketing with customers who have signed up. Text messages can have open rates of up to 98 %; however, only 15% of companies utilize SMS marketing to engage their customers. You can keep ahead of your competitors by implementing this method.
With the appropriate digital marketing tools, you can design an SMS-based campaign that will drive visitors to your site. Start by sending out an email using an SMS shortcode as well as an offer.
4. Offer customers exclusive deals and offers
People love exclusivity. They would love to be in a private club with limited access. Your e-commerce business could be the perfect place for customers can scratch their itching! It turns out that 94 percent of Americans will take advantage of an offer that is exclusive.
Those sound like great odds. But no shortcuts! If you want this to be successful, you’ll need to create a web experience specific to each user. Technology is your best partner in this case (more on this in a moment).
For instance, customers who have logged in might be offered deals based on how long they’ve been shopping with you. You might offer your customers an exclusive birthday deal or discount every year that they are a part of your loyalty plan.
5. Survey your customer base
How do you feel you can improve your customer care? What’s the point of guessing when you could ask your audience for feedback instead?
Imagine what this type of information can do to improve your user experience. There doesn’t need to be a lot of questions, either. It’s possible to ask your customers a simple question via a pop-up whenever they sign in to their account.
Customers could be asked what they think of your latest autumn line-up or really anything you believe will give valuable information to your company’s image. This can help you customize the experience your customers experience with your brand. If you can improve it, the customers will be more likely to stay longer.
The more you know about your customer’s behavior after purchase, the better!
6. Personalize email messages (and all other things)
Make your customers feel special. Let them feel as if you’ve got them in your personal space. Nowadays, technology makes it simple to customize the shopping experience of all customers, so there’s no reason not to!
The first and most obvious step is to create an email marketing campaign. There are many tools available today which can help you not only create content that is unique but also automate the process as well. This could be combined with an exclusive deal, as we discussed earlier. Email Marketing is still one of the highest ROI of all marketing channels; therefore, don’t miss this one.
In addition, you could showcase various products on your website according to the type of user. It’s all dependent on the things you wish to monitor to make sure your list is targeted. One obvious way to do this is to display women’s clothing to females and reverse the process.
7. Optimize your digital marketing campaigns.
Implementing strategies to retain customers from e-commerce is only one element of a well-planned digital marketing strategy. To maximize the effectiveness of all your advertising efforts, you must maximize each channel to reach the correct target audience.
Optimization could include things like making mobile-friendly ads or posting and sending campaigns at the best time for your clients.
8. Provide guidance and information that can add value.
Your social media channels for marketing offer more than simply providing coupons or new information about your products if you provide content that has value, such as industry tips or insights into innovative ways to use your product and build the brand’s reputation.
It’s crucial to know the advice your customers are seeking. 60 % of the content companies create is nothing more than causing confusion.