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Most entrepreneurs have heard of the 80/20 rule or the Pareto Principle, which states that 20% of your best customers account for as much as 80% of your revenue. In eCommerce, that can result in incredible outcomes such as a mere 5% increase in customer retention resulting in as much as a 95% increase in profits

All this math aside, the fact remains that in most cases, retaining customers will be much more worthwhile compared to relying solely on new leads to generate revenue. 

Old users know you, trust you, and are familiar with the customers’ experiences of shopping at your store, so having them buy again will always be easier (and cheaper) than converting someone new.

But unfortunately, many eCommerce stores don’t take advantage of this fact and continue to let their best customers walk away. Eventually, this leads to marketing budgets running dry, sales slowing down, and competitors creeping in on their market share.

To help you prevent that, let’s look at some of the most common customer retention mistakes and how you can avoid them in your business. 

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Focusing on customer acquisition

There are plenty of eCommerce growth hacks that can show you how to start getting traffic to your site and generating sales almost from the first day of the launch. 

For instance, Charlie Worrall from Imaginaire suggests attacking customer acquisition on a new store head-on, using aggressive paid ads strategies as well as a structured SEO plan. But even though the emphasis is on acquisition, he also talks about how his company was “actually working towards creating a loyal set of customers who would keep coming back to purchase products.”

And that’s what many novice entrepreneurs fail to realize. 

Sure, when you launch a store, it’s all about getting those sales rolling in and making sure that you’ve got cash flow that you can use to build traction. The data you collect from those initial sales might be even more critical, as it allows removing a lot of the guesswork and showing you exactly what’s working.

But at the same time, you must be thinking about how you are going to get those customers to come back and buy from you again.

You need those happy customers to keep your brand on their minds, spread your message to their friends, and make it a habit to check in to see what new offers you have available.

The main point to take away from this is that for every customer acquisition channel you set up, consider how you will interact with those customers after they make a purchase. That way, you can avoid them falling through the cracks and can develop an actual relationship that will not only lead to more sales but will also build a stronger reputation for your brand.

Poor customer support

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90% of Americans view customer service as a deciding factor in whether to buy from a company or not. And for eCommerce companies that still haven’t prioritized customer service above all else, that is a problem.

Today, customers won’t be satisfied by a simple contact form on your website. If they have a problem and you don’t offer a way to resolve it quickly, even the best prospects won’t waste time on your site and will move on to the competition that can provide help faster. 

So, your first priority should be to set up a multi-channel customer support system, which would make it easier to reach you on various platforms. Some of the channels you should consider include live chat, chatbots, social media chat, and even apps like WhatsApp. 

This way, no matter where your audience might hang out, they can get answers quickly and feel much more confident about purchasing from you.

Another crucial part of effective customer support is making the process as simple as possible. Implement a system where they need to talk to as few different people as possible and ensure that customers don’t have to repeat their problem multiple times.

Finally, you should consider creating a knowledge base that would enable your support staff to provide resources to helpful links and avoid explaining the same common issues every time.

This way, you will be achieving two goals at once, freeing up more of your support team’s time, reducing waiting times, and providing a helpful and in-depth resource for your customers, which will help resolve the most common issues more effectively. 

Not enough knowledge about audience

Most eCommerce sales strategies come down to one fundamental rule – you must deliver the right type of message to the right type of person, at the right time, and through the right channel.

However, while that might sound relatively simple, it can get complicated quickly once you have to actually figure out each of those parts. Most less experienced eCommerce store owners make the mistake of assuming who their audience is based on their preconceptions. Others simply copy what others are doing without even considering that their situation might be completely different.

And unfortunately, that usually results in subpar marketing and sales strategies that don’t deliver good results.

But what can you do differently to learn more about your audience and separate yourself from the competition? 

Well, if you already have a customer base, the best starting point is to look inward and try to learn as much as possible about the types of people you think are the best fit.

You can also look at your current customers to see if there are groups of buyers that aren’t worth as much, allowing you to identify segments based on how valuable a sale from that group might be.

When looking at your customers, you should go as deep as necessary, identifying not just the essential demographics data but also looking at their biggest challenges, desires, preconceptions about your business or the entire industry, and online browsing habits.

That way, you’ll have a much better shot at delivering a type of message that resonates with your best customers and gets them to notice you.

Knowing your audience will also allow you to zero-in on the type of business you need to be. You may find that your current branding efforts aren’t aligned with your audience needs or that your best buyers don’t frequent the marketing channels you’re focusing on.

Passive engagement

Lack of engagement is one of the most common reasons why eCommerce stores underperform and fail to reach sales targets. If you don’t have an effective strategy for keeping your brand in your customers’ minds, it will be tough to make consistent sales and grow as a business.

Luckily, customer engagement doesn’t have to be a time-consuming and frustrating task. In fact, once you put together the right strategies, you will find that a lot of the processes will have a cumulative effect and will run largely on autopilot. 

One of the most critical considerations for customer engagement is having multiple channels you can communicate through. Just as with customer support, if you can engage your audience where they like to hang out, you will have a much better chance of making more sales.

For instance, you could set up multiple opt-in paths where people can subscribe to your list. Whether it’s right after the purchase, when viewing products, or even when reading one of your blog posts, offering an opportunity to sign up and incentivizing the action with a reward can help you build a solid list of customers that you can engage on demand.

To make the most of your email list, make sure to segment it as much as possible and offer personalized messages that are relevant to each individual subscriber. Blast emails are a thing of the past, so taking the time to provide customized content is the only way to ensure that people keep reading your emails.

Social media is another essential part of eCommerce customer engagement, as the sheer number of people on social media ensures that your audience likely spends time there every day. 

By creating relevant content, running contests, and showcasing your best deals, you can keep your brand at the top of your audience’s social media feed and continually increase the number of sales as your presence on sites like Facebook or Instagram becomes more prominent. 

Not listening to feedback

Finally, you must be willing to listen to what your audience is saying. Because you don’t deal with customers in person, it’s easy to become detached from what they really care about, what problems they are facing, or even how your services and products are causing them additional challenges. 

Unfortunately, if you don’t take a proactive approach in staying on top of your audience’s opinions, it’s only a matter of time until a competitor steps in and provides a better service that’s catered to their expectations. 

But how can you become better at listening to customers’ feedback? 

Well, the first step is always the same: you have to be willing to ask. 

The good thing about selling online is that it’s very easy to communicate with people, even during a pandemic. You can get answers to any question you might have, as long as you are willing to ask it and the person on the other side can quickly answer it. 

To start, make sure that you collect and analyze your support team’s conversations with customers and website visitors. These conversations are a gold mine for identifying the most common issues they are facing and showing you what you must focus on. 

You could also send out surveys to your subscribers’ list, especially if you want to gain answers to more questions and learn about who they are. For a more personal approach, you could even schedule a few interviews with recent customers, which can be an invaluable resource for learning how your audience talks, what words they use, and what matters to them the most. 

Sometimes, even something as simple as an on-site survey can give you plenty of insights, as long as you ask the right questions that are easy to answer and provide you with information you can actually use. 

As you collect more feedback and implement changes, you may discover that some of the assumptions you made about the type of brand you should be or the products you should offer were way off. And in the process, you will gain a way to make informed decisions that will put you miles ahead of the majority of the competition you are facing.

And in the end, if you know what your audience wants and correct the mistakes you make, that’s the easiest and most reliable path to excellent customer retention you could take.

Bottom line

Customer retention matters, but keeping customers happy and coming back for more isn’t an easy task. 

If you take a data-driven approach, are willing to implement changes, and listen to feedback, you will be well ahead of most others and will build a reputation of a company that cares and delivers on its promises.