Customer retention is a subject near and dear to our hearts – that’s why you’ll find several articles on our blog about it.
And it’s not that we have a particular bias towards it – our experience in the field of online marketing has proven time and time again that customer retention really is one of the key pillars of a successful business.
It’s not only a matter of cost – although acquiring a new customer is 6 to 7 times more costly than retaining an already existing one. But it’s also a matter of reputation and common sense – why work hard and invest a lot of resources into something that simply cannot compare to the better alternative? Customer lifecycle can be extended with a few easy strategies.
So let’s embark on another journey down customer retention lane – where we’ll talk about the most efficient strategies, tips & tricks and at the end, we’ll share with you an innovative tool that will help you increase your customer retention in no time!
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The importance of Customer Retention
So let’s get a quick reminder of what customer retention actually is – it’s the strategy of incentivizing your current customer base to remain loyal to your brand or business. Meaning that instead of investing in marketing efforts to constantly attract new customers, you rather create a stronger relationship with your current customers, creating a long term connection with them.
This results in people spending more, purchasing more frequently and becoming brand ambassadors to your brand (recommending it, without incentive, to their friends and family).
Customer retention strategies are meant to increase profitability, whilst encouraging a sustainable business model. In short, you’re basically planting seeds that will reap great rewards in the long-term.
So, let’s move ahead and see what concrete tools you can use for increasing customer satisfaction, and, in turn, your customer retention rate.
Customer Loyalty Programs
The first tool is one that we’ve all heard of, seen, and even experienced – customer loyalty program. It’s truly the most basic and most used customer retention strategy, but for a good reason – it works.
These loyalty programs can come in the form of points, free rewards, samples, add-ons, and discounts. In using loyalty perks, you’re 82.4% more likely to attract customers, since they’re actively looking for businesses that will reward them for their loyalty.
Although discounts and free items are the most popular options, a more complex palette of rewards is more incentivizing for customers, so get creative! Conduct customer surveys and understand what your customers are looking for – sometimes, the smallest of gestures can create a lasting impact on them!
It is said that nowadays people are acting like brands and brands are acting like people. This is very true and it shows in the type of content you see usually shared online by big-name brands, especially on social media.
Instead of the typical, cold and impersonal approach, brands are heavily steering towards memes, open conversations in the comments and are incentivizing their audiences to step in – whether it be with comments, opinions or just to say hi.
Therefore, it’s easy to understand why content personalization is so important for creating that authentic bond that’ll last for a long time. We’ve talked more in-depth about buyer personas and market segmentation in the past, so make sure you get (re)accustomed to them.
Why? Because they’re the bread and butter of all content. You need to understand who your audience is and what they want to hear from you. And, if you’re a big brand with a wide spectrum of people buying from you, the work is even more complex. Basically, your customers’ experiences are the most valuable when it comes to long-term commitment – so start personalizing!
CRM means Customer Relationship Management and it is one of the most important tools used by marketers everywhere. It’s a key pillar in understanding and keeping track of a customer’s entire journey – from first ordering, to customer success, and all the way until you part ways.
This way, you have a clear image of what they like, dislike, and what their customer expectation is from you, so you can intervene the moment you feel like they might start losing interest and reorient themselves towards your competitors. Customer behaviors vary from segment to segment, so a CRM tool is really useful.
The reasoning behind it is pretty simple – when you have all the necessary information in one place, it’s easier to notice patterns, mistakes, and most importantly, opportunities for growth.
Games are a beloved pastime – and shouldn’t be limited to just our hobbies. Gamification is an incredibly effective tool used in business as well. With this customer retention strategy, you create a bit of competition, you raise the stakes and make the rewards seem that much more exciting for the winning person.
Incorporating gamification into your marketing strategy means adding leaderboards, statuses, badges, and other fun rewards in order to keep your existing clients interested and involved in the process. You can also cross-incorporate it with other areas of marketing, like promotions and the aforementioned loyalty programs.
Regardless of the perks, the rewards, and the offers, one thing is more important to an existing customer than anything else – great customer support. We’ve all been there – we had a not-so-great experience with a brand and even though we love their products, we simply cannot shake the memory of that awful interaction.
Moreover – bad news spread quicker than good news. Remember that a bad customer service experience does not cost you just the lost client, but it’s also a big stain on the image of the brand as a whole.
The great thing about today’s tools and services is that you don’t need to employ tens of people to take care of this area for you. There are AIs, FAQ pages, social media, and forums that basically take care of this situation for you.
Nevertheless, it’s crucial that you remember to invest in customer support as much as you do in acquiring new customers. There’s no chance of improving your customer retention rate without creating great customer experiences for your clients.
Yes, email marketing is still a thing! Albeit a totally different thing, compared to the classic, old, boring newsletters, but nevertheless still a thing.
There are two main secrets to email marketing: only disturb people that want to be disturbed and make them interested. The second one is pretty obvious, but let’s dive a bit deeper into both of them.
First of all – only disturb people that want to be disturbed. This came about after finding out just how many companies buy email addresses from third parties, how many “trick” customers into leaving their email address, and how many email receivers complain of unsolicited spam.
Therefore, make sure to stick to people that are actually interested in offering their address because they would get benefits, news, and other perks, not otherwise.
Secondly – keep them interested. As we mentioned before, it seems pretty obvious, but it’s a rule often broken by many brands. Interest comes through offers, creative insight, never-before-seen news, and such.
You can’t just email a boring catalog of your products and expect people to read through it, especially in this day and age, when people receive hundreds of emails per day.
Therefore, make sure to integrate this customer retention strategy into your overall plan and create a story behind it and find the right reason to implement it in the long run.
To leverage the performance of all of the above, you need a tool that segments your customers and helps you approach them differently. Reveal is a Customer Value Optimization platform that uses RFM segmentation to gain insights for better-targeted emails, paid campaigns and more repeat customers. It builds your Ideal Customer Profile and calculates:
- The Share of Margin for every RFM group
- Behavior analysis for each RFM group
- How prone are your customers to place the next order
- Customer Retention Rate
- Cohort Analysis
- Catalog anomalies
- Customer Lifetime Value (Predictive and Historical)
Remember: acquiring a new customer typically costs 6-7 times more than to retain customers that already exist. That’s why you need an intuitive, easy-to-use, and effective tool to help you increase customer retention rates and create a long-term, loyal, and dedicated customer base for your eCommerce business.
Once again we delved into the wondrous world of customer retention. And it’s not just because we particularly like this topic – it’s because when you break it down, creating a long-lasting, deep connection with your customers is more beneficial for the both of you, from every point of view.
Today we noted some of the most efficient ways to increase your customer retention rate and reduce churn, how to create great customer experiences for your clients and how to make sure your business remains relevant in today’s hyper-competitive market.
Remember that you don’t have to figure all this out on your own. There are powerful tools out there, specially made for your needs.
Reveal, a simple, easy-to-use and effective customer retention tool, is your best shot at making sure you understand your client base, you satisfy their needs and you create that long-term, productive and financially stable relationship that we all aspire to attain.