Customer retention strategies are an important aspect of business expansion that most businesses focus on; retaining existing customers is far less expensive than acquiring new ones. Regardless of how important it is to acquire new customers, your loyal existing customers will play a critical role. They are responsible for spreading positive word of mouth about your brands to their friends and families. According to research, repeat purchases from loyal customers account for 20% of your business profit, accounting for 80% of your profit.
Loyal customers are regarded as the heart of any successful e-commerce business. If you successfully retain 5% of your customers, your profit will increase by nearly 25%.
Here are some tips that can be put into practice for retaining your eCommerce Customers.
What are the advantages of retaining your eCommerce Customers?
To achieve goals for your business, you must require two components: customer acquisition and customer retention. Finding new customers is difficult enough, but keeping those customers can be difficult.
Ecommerce customer retention strategies assist you in developing a solid strategy for increasing customer value and provide practical ways to nurture your sales funnel.
There are tangible advantages to developing an effective customer retention strategy:
Acquisition costs: acquiring a new customer can cost up to five times more than retaining an existing customer.
Lifetime value: By emotionally connecting with your customers, you can see four times higher customer lifetime values than without that personal touch.
User experience: A positive customer experience can keep up to 84 percent of customers from leaving because of something as simple as returning a product.
What do Customer Retention Strategies entail?
Customer retention refers to an e-commerce company’s ability to retain old customers, i.e., encouraging them to make repeat purchases within a certain time frame.
As a result, e-Commerce companies retain many customers, known to be the backbone of their business because they purchase more frequently by implementing effective customer retention strategies. As a result, the total cost of acquiring new customers decreases over time, while the average lifetime value of the customers increases significantly.
How to incorporate eCommerce customer retention strategies into your e-Commerce marketing strategy?
You still have time to capitalize on remarketing to your customers if you haven’t put much thought into your customer retention strategies. Rather than going through a list and selecting one strategy to implement, you should incorporate customer retention strategies throughout your campaigns.
Use the following simple yet effective tips for incorporating eCommerce customer retention strategies into your marketing strategy:
Use your customer data to your advantage: Email personalization and list segmentation are powerful tools for targeting your customers. In addition, you can use customer data to identify trends in your audience’s behavior.
Examine your marketing tools: Optimizing send times and automated email campaigns is critical for effective customer retention. Determine how your existing marketing tools can assist you in expanding your campaigns.
Determine your sales objectives: Metrics of performance can be used to guide future marketing efforts. Before deciding on the goals for your retention efforts, examine your current sales goals and how your current marketing plan is performing.
The best thing you can do is introduce new customer retention strategies gradually and conduct A/B testing to see what works best for your eCommerce store.
Top Customer Retention Techniques for E-commerce Businesses
Retaining your e-Commerce customers significantly impacts the worth of an e-commerce company’s marketing and sales strategy. The following are some tried-and-true actionable customer retention strategies that you can use to improve customer retention and, as a result, business profitability.
1) Implement an outstanding social media marketing strategy
Social media channels are the best way for any e-Commerce business to connect with customers. An outstanding social media marketing strategy should be included in online retailers’ customer retention strategies so that they can target a specific set of customers or a diverse range of customers and increase customer engagement and loyalty at a time. If you are successful in making your social media followers happy and interested through your posts and contests, they will eventually visit your website and gradually you can retain them.
2) Always do a text-messaging marketing campaign
SMS marketing with opted-in customers is becoming more acceptable. Text messages have open rates as high as 98 percent. But. it’s noticed that only about 15% of businesses use SMS marketing to communicate with their customers. Adopting this strategy will allow you to stay ahead of your competitors.
You can always do the text message campaign that directs customers to your website using the right tool. Begin by sending an email containing an SMS shortcode and a discount will be a unique idea.
3) Keep track of the right metrics
Tracking the right metrics can assist you in determining where you should focus your retention marketing efforts. It would be beneficial, for example, if you kept an eye on the following metrics:
Returning visitor rate: Knowing how many of your website’s returning visitors can indicate how frequently people interact with your brand.
This is useful information because returning visitors may indicate non-customers who are likely to make a purchase or existing customers looking to make another purchase.
Repeat purchase rate: Your repeat purchase rate indicates the percentage of your customers who bought from your brand more than once.
Customer life-time value: Whereas the repeat purchase rate shows how many customers have become repeat buyers, customer lifetime value is an excellent follow-up metric for determining how much revenue you earn from a single loyal customer.
4) Give first preference for customer service
According to Gartner, a company that can provide consistent customer service quality across multiple channels has a good chance of retaining 89% of its customers. Customers who did not provide consistent customer service quality, on the other hand, could only retain about 33% of their customers.
Create a customer service guidebook or playbook that walks people through various scenarios. It should also tell them how to handle them to help you keep customer service running smoothly. For example, this playbook could include frequently asked questions and recurring requests such as refunds and exchanges.
It’s also critical to make it as simple as possible for customers to contact you. This could imply being available via email, social media, and even phone.
Display your contact information prominently on your social media profiles, website, and product pages. Please keep this in high-traffic areas, so it’s easy to find.
5) Create loyalty programs to retain customers
As part of their customer retention strategies, most e-commerce retailers develop customer loyalty and reward programs. It not only gives customers value in the form of points, discounts, cashback, and other perks, but it also has reward tiers that encourage customers to spend more. For example, either implement exclusive discounts, subscription services, gift vouchers, use a point-based system, or hold an exclusive contest that will increase existing customer engagement and attract many new customers.
6) Pay attention to customer reviews
Customer reviews are an essential component of customer retention strategies that should not be overlooked. Product testimonials and customer complaints are two areas where you can learn how customers receive your products and services. You must respond to customer reviews posted in any communication channel so that they believe your brand cares about them. It will help retain customers and increase customer loyalty in the long run, and you can do it by getting a proper review collection tool. In addition, implementing feedback into your business processes is critical to the success of any e-commerce company.
7) Inform your customers about your advocacy
Is there a cause near and dear to your heart as a business? Your customers may feel the same way.
I’ve noticed a shift in customer expectations of brands over the last few years. Nowadays, simply having good products isn’t enough. Instead, it’s becoming increasingly important to have good products and do good.
When you support causes you are passionate about as an eCommerce merchant selling products that consumers can tangibly enjoy; your brand becomes a bigger part of their lives.
Be open about the causes you truly believe in as a company and show customers how you support those causes.
Customer Acquisition vs Customer Retention: Which is more practical, quick, and cost-effective?
As an Innovator, I, too, have spent time, effort, and funds to bring in leads to generate new business. And, to acquire a new customer.
Over time, I’ve accumulated many customers ranging from small businesses to entrepreneurs and start-ups by creating professional custom-made websites for them.
However, as a result of the course, I discovered that I was devoting too much time and effort to acquiring new clients and was failing to keep up with existing customers.
It is much easier to communicate, explain, educate, and close a business deal with existing customers.
But, to approach a new client with a proposal and invite them to discuss the requirements is slightly difficult. This is because it needs a lot of convincing.
According to my personal experience, retaining an existing customer is far less expensive and faster than acquiring a new client.
Wrapping it up
Effective customer retention strategies will assist you in increasing the average customer life cycle for your brand. Therefore, it is worthwhile to put forth the effort because it will aid in brand building.
As a result, reduce your marketing return on investment.
Keep in mind the areas where your customers want improvement when implementing customer retention strategies. Also, analyze all information related to your customers, and determine the preferred communication channels when reaching out to them. The higher the customer retention rate, the more successful the e-commerce business will be in the market.