Customer retention management includes four key elements: customer acquisition, customer retention, customer lifecycle management, and customer development and growth. Leaving aside the two last elements for the moment, it’s worth noting that it costs five times more to attract a new customer than it does to retain an existing one. It’s one of our mantras and we’ll keep on repeating it over and over again. Why? Because it matters to your business and your online store. It matters to the cost optimization and value optimization efforts of your company. It matters to the way you envision and finetune your marketing strategies. We’ve also been talking about how 20% of your customers, the most loyal ones, account for 80% of your sales. So today’s topic will be about how to retain customers in a way that is as meaningful to them as it is profitable for you.
Don’t skip the basics
If you want to turn more first-time customers or existing customers into repeat customers, there are some important elements that you simply can’t skip:
- Understanding your customer. This is where it all begins. You can’t have a high-performing digital marketing strategy without a good understanding of the segments you are addressing. Start by assessing their needs, their pains & gains, their expectations, as well as how your competition addresses them. Research should always be your number one priority. And if you’re looking to understand your customers better, Reveal can help you see them in a completely new light- one that will benefit your business from day one.
- A solid eCommerce website that provides a consistent, positive, and user-friendly experience that impresses your customers and guides them naturally from one page to another, leading them to the ultimate goal: conversion (sales). This involves an attractive, well-structured, and functional design, robust product pages with high-quality pictures and detailed descriptions containing all the keywords and the information that your prospects might be interested in, and a “map” of the logical flow of actions so that the users know how to get where they want without wasting time and energy.
- A content marketing strategy that engages your prospects and customers from the very first moment. What we would like to stress here is that paid advertising works well but there’s a real need to move past this model of “push” marketing towards “pull” marketing strategies (content marketing, email marketing) or, better yet, to combine them in such a way that they yield the desired outcomes. With content marketing, you are able to offer a more audience-focused and relevant experience, without trying to sell anything (yet). This lays the grounds for connection, which is a crucial element if you’re looking for ways to increase customer loyalty. With paid advertising, you can create awareness of your products and services, spread the word about discounts and new additions to your portfolio, or promote your top-performing materials (blog posts, white papers, eBooks, guides, and so on).
Once you have managed to attract people to your website, through SEO, Google Ads, or social media advertising, your main concern should be how to nurture this connection and encourage customers to return to your shop time and time again. One way to increase the number of repeat sales is through loyalty programs. A loyalty program is one of the most common customer retention tactics and can be both a way to reward customers for choosing you on a consistent basis and a way to further delight and engage them. Depending on the way you choose to build these programs and the experience around them, another advantage can be the fact that you can make customers spend more with your store, without making it seem like you’re demanding more from them.
According to Hubspot, there are six types of customer loyalty programs:
- Point-based loyalty program
Perhaps the most common loyalty program, it associates a number of points with each order that has been placed that is directly correlated with the value of the purchase. The points have a certain value and, in time, they can be used to get a discount, a freebie, or something similar. The problem for most eCommerce stores is how to establish the value of these points. More often than not, such a program requires a customer to buy lots of stuff for a long period of time to reach a number of points that can be exchanged into something they may want or need and most customers don’t have the patience to wait for that long until their points turn into something tangible.
Think of it this way: growing up, we all had piggy banks where we would slip a few quarters every once in a while. And we would check them out constantly to see if we had enough to buy that new game or toy yet. And it was never enough. However hard we tried, it seemed like that piggy bank would never be “full”. That’s the deal with point-based loyalty programs as well. So before deciding to implement such a program, think about the pains & gains of your customers to design it in such a way that they don’t have to wait endless months until they can actually use these points they’ve been collecting. Keep it simple, intuitive, and frictionless.
- Tiered loyalty program
Tiered loyalty programs are a great way to inspire your customer base to climb your loyalty program ladder. Instead of using points as a method to reward loyal customers, you will assign them a “loyalty status”. This is a great way to segment your customers even better, while also providing them with a way to feel acknowledged by your brand and get more invested. These kinds of programs are built on our innate competitiveness and our need to get on top of the hierarchy wherever possible.
They are also useful in increasing the feeling of belonging to a community, in personalizing the experience (you can send different emails based on the tier a customer is in), and in differentiating your brand (loyalty programs can be used to support your branding efforts as well because they allow you to play with elements pertaining to the visual identity, the story, and the values of the brand). But perhaps one of the most important elements that make them superior to point-based programs is that the points and, hence, the rewards don’t expire.
- Paid loyalty program
Premium or VIP loyalty programs seem rather counterintuitive: why would someone pay for a loyalty program? Because the benefits are much more valuable and because these benefits come right away: you don’t have to wait for months for a coupon or a discount. The guys from Clarus Commerce put it best: traditional programs require members to spend over time for rewards that come later. These traditional programs simply train customers to wait for discounts and coupons. They don’t develop loyalty. Premium loyalty programs work the opposite way. In a premium loyalty program, members pay a recurring fee to stay in the program in exchange for valuable brand- and product-specific benefits that they can use anytime. This means that members can engage with the program 24 hours a day, 365 days a year.
They allow you to grow your business by offering more engagement, higher purchase frequency, and higher AOV. Think about Amazon: people pay a subscription to gain access to free delivery, exclusive deals tailored to the customers’ needs and interests, and the entertainment “division” of Amazon: Prime Gaming, Amazon Music, Amazon Prime Video, and books, comics, or magazines for their Kindle device. The result: Amazon and its premium program are some of the most successful customer retention examples, boasting a retention rate that goes above 90%.
However, you should be careful if you want to implement such a program: are the benefits offered worth paying for? Is your niche a suitable one for premium loyalty programs? Is it really what your customers expect from you?
- Value-based loyalty program
Value-based loyalty programs are completely different from traditional programs. They don’t offer customers a tangible reward or special discounts but, instead, they are built on the common grounds between the audience and the values on which the company has been developed. This is precisely why these are some of the hardest programs to implement: you need to know how a customer feels about various issues, what they value in their life, and what would make for a fulfilling, engaging experience for them.
Value-based programs usually involve collaborating with a charity or a non-profit to which the company donates a part of the proceeds associated with a certain product or range. This process, however, involves a great synchronization between the supported cause, the values of the brand, and the interests/expectations of the audience.
- Coalition loyalty program
A coalition loyalty program involves a strategic partnership with another brand. It can be one from the same niche or industry, or it can be one that is linked to your main activity to a lesser extent, but more relevant in the eyes of your consumers. For this, you need to know your consumers’ buying habits, their preferred brands, as well as their expectations from a potential collaboration with another brand. You need to stay relevant and built a consistent story around your partnership. But the benefits will be mutual: you’ll be able to gain customers from the brand you partner up with and increase your current customer base and the other way around.
- Game-based loyalty program
Around 54% of members of your loyalty programs are inactive, according to rewards program company Zinrelo. But gamification can turn things around in your favor. It can increase customer satisfaction, while also keeping them engaged. Because, let’s face it, who doesn’t want to have a little fun? Gamified loyalty programs are more dynamic and more exciting, making your customers eagerly come back for more. If you manage to design a valuable gamified experience, you are much more likely to retain customers and increase your repeat purchase rate. It’s all about creating experiences that are built around your brand, while at the same time integrating the consumer and immersing them into a world they want to step in.
Email marketing is another important element in all retention strategies. For a lot of businesses, email marketing is one of the most powerful tools for retaining customers. It allows you to create a personalized path and move leads through the funnel up to the point of conversion and beyond. From onboarding to monthly follow-ups and the introduction of your new products and offers, email marketing offers you the means to follow your customers along their journey in a meaningful way. And- why not?- engage them.
Email marketing is not all about upselling, cross-selling, or cart abandonment reminders. It’s also about offering useful content that shows you care about your audience and want to establish a genuine connection with them. Having all the data on your hand, you can personalize the emails and group customers depending on how frequently they buy from you, how interested they are in your products, what their average order value is, and so on. This is where your thorough customer research turns into customer understanding and starts paying off. And, once again, this is where Reveal can help you better meet the needs of your audience.
And if you want some tips for a good email marketing strategy aimed at improving your customer satisfaction and leading to more eCommerce sales, here are some points worth following:
- Make it feel personal. Address customers by their name and, whenever possible, be mindful of the stage of the buyer’s journey they are in. Nobody likes to feel like a number in a spreadsheet and customers expect outstanding personalization and content that addresses their pains. Some are more interested in a specific product or service, while others are more hyped about a different one. Give them what they need: actionable, nicely packaged information, written in a conversational style, to make them expect the following email, not delete it or unsubscribe from your list.
- Create multiple newsletters. This way, people can subscribe to the one that best suits their needs. A single promotional newsletter won’t do the trick anymore, not for too long, at least. Sure, people may come back once or twice to buy something that piques their interest, but you’re looking to increase your customer retention rate in a long-lasting, sustainable way, aren’t you? Then offer them a choice. People need to feel empowered, even if it’s just the simple act of choosing which newsletter to subscribe to.
- Make it look professional. Use lovely, eye-catching visuals scattered here and there to highlight the most important sections of your email. And use that white space wisely: don’t make it too cluttered, don’t go over the top by highlighting entire paragraphs or adding too many different types of headings, or, worse yet, more than one CTA.
- Create educational materials and keep them updated with what’s happening within your company. Consumers’ need for accurate information and transparency is not to be underestimated. Email marketing is a great way to deliver both, in a format that supports your brand’s identity and values. And don’t forget: what’s happening within your company is not strictly limited to the campaigns you are about to launch or the new products you are ready to put on the market. It’s also an opportunity to share “behind the scenes” content (be it a photo, video, or text), and a chance to let the storyteller within you shine. The more they know you, the more eager they will be to keep on buying from you. The friendlier and more familiar you are in your approach, the more they will connect with you, and emotional connection is a powerful driver for repeat purchases.
- Test different approaches. Experiment with the tone of voice and the type of content you are delivering, with subject lines and email lengths, and see what works best and which emails have the highest open rate. See what CTAs are the most clicked-on and what customer segments are more responsive to them. This way, you can get a sense of their level of interest and investment and put them higher on your list of “potential lovers”.
Special offers for loyal customers
A popular saying goes like this: “Don’t wait for opportunity. Create it.” Don’t wait for customers to engage with your business, come forth and engage them with special offers on special occasions. Or on Mondays, when anybody needs a reason to smile and forget about the stress brought about by the work week that’s about to start. This is one of the easiest customer retention strategies but, again, it must be based on your consumers’ buying behavior.
Any customer purchase leaves traces in your analytics and customer management platform. By using this insight, along with the frequency of their purchases, and their responsiveness to other marketing tactics, you can establish patterns and segment the consumers in a way that allows you to offer meaningful rewards to each of them. Because loyal customers are not all the same, and you will be able to discover that by analyzing their behavior more in-depth. What is it then that can you offer them, more specifically?
- Early access to new campaigns and products that are about to be launched
- Discounts to products that are highly relevant to them, based on their buying patterns. Identify their favorite repeat purchase products and offer them a better price for those products.
- Seasonal special offers: recommend relevant products for the upcoming holidays and offer them a significant discount from the normal price
- Referral bonuses or rewards for bringing over new customers
- Make it a bundle: throw in something extra for buying a product you know they are already interested in; keep in mind that what you’re adding to the package has to be related in some way to that range of products, the customers’ preferences, and, ultimately, your brand
- Offer them free shipping for the orders placed in the following month/s
- Celebrate their birthday with a gift card and a personalized message- make them feel special, show them you care about them, make them feel part of your “family”
You will use different tactics when you’re trying to attract new customers than you will while trying to communicate something to your existing customers. It’s all about personalization: address each segment of your audience and customer base depending on the stage of the buyer’s journey they’re in. In other words: it’s all about how well you are using the data your customers are sharing with you in order to design more meaningful experiences.
We’ve already talked about personalized email marketing campaigns. You can share customer success stories, tutorials, “behind the scenes” content, or even ask for customers’ feedback in a way that sparks some kind of emotion and triggers a response from the part of your audience. You can choose to whom you are addressing certain promotional efforts, as well as how far you want to go with personalizing these emails.
Another way to connect with your audience and grow your repeat customer rate is to create a better experience through your social media campaigns. From visuals to copy and targeting- everything matters because each of these elements can help you grab your audience’s attention, differentiate yourself from the competition, and offer a pleasant, non-disruptive experience. This last element is very important, as people are constantly under assault: they see hundreds of ads each day, and they have developed sophisticated mechanisms to filter out those that are not relevant (or “spammy” in their eyes).
For growing awareness of your business, you can focus on the shared interests of your brand and your audience and introduce yourself as smoothly as possible, by creating “stories” that address the main pain points of your audience and the solutions you are offering.
For first-time visitors, retargeting is a powerful acquisition instrument. 97% of people who visit your website for the first time will leave without buying anything. Luckily, with the right approach, you can remind them of your brand and products and, eventually, bring them back and convince them to make a purchase. Retargeting can be done with Google, Facebook, or LinkedIn ads and it is a great tool to connect with your customers and cultivate loyalty. By showing people the right content on the right platform, at the right time, you increase your chances to build a more loyal customer base.
According to Google, combining retargeting ads with the other advertising you already do can help you sell 50% more stuff. Here you can find the best retargeting strategies for Facebook (just remember to filter out people who have already bought from you so you can avoid the unpleasant situation of showing them ads depicting a product they have already purchased).
For existing customers, you can base your campaigns on products and creative concepts you know they might be interested in, by relying on past behavior and their previous interactions with your social media campaigns. Remember: when it comes to customers and social media users, one size does not fit all. You have to segment your audiences thoroughly and create multiple ad concepts that might appeal to each segment.
Loyal customers can not only be the target public for your campaigns but also their main actors. You can integrate their feedback, testimonials, and success stories into your online campaigns. For example, you can encourage people to tag you and your products in the photos they share online, then ask them for permission to include them in a live feed on your website or in a creative execution dedicated to an upcoming campaign. This is both a way to reward them for their loyalty by including them in your campaigns and a way to show authenticity to other members of your audience.
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To turn your existing customers into repeat customers, it is essential to provide value consistently, through everything you do: from their experience with your eCommerce store, the emails and other kinds of communications they receive from you, the ads and the content you share on your social media pages, all the way to delivery, packaging, and the quality of your product/service and customer support.
Great experiences that exceed your customers’ expectations are among the best ways to keep them coming back for more. Be mindful of everything that is related to their buyer journey: the stage they’re in, the interest in your product/service, their communication preferences, their experience with your product/service. Personalization, relevant discounts, and loyalty programs are a few of the customer retention strategies that work best and yield outstanding results.
1. Continue to engage with your customers after they purchase something from you. Send them a personalized “Thank you” email, continue with follow-up emails (but don’t get too spammy), and show them deals they might be interested in. Optimize your transactional emails (order, shipping updates, and confirmation emails) to make them feel more personal, engaging, and on-brand but also to seize the opportunity of slipping relevant product recommendations to cross-sell.
2. Offer them relevant content that addresses their specific needs (such as tutorials, “how-to” guides, articles that might help them do more with what they have purchased from you, infographics, fun facts, and so on) without asking for anything in exchange. Sometimes, the right piece of information at the right time counts more than a thousand discount codes sent every other week.
3. However, discounts, promos, and coupons are not off the table. They are great ways to incentivize a second purchase. From that point on, you can keep on engaging with these customers and use the growing body of data to further personalize their experience and the ads they are exposed to.
1. Leverage customer feedback surveys, deliver outstanding customer support and build customer loyalty programs that are meaningful to your customers and relevant to your niche/industry. Don’t ignore customer complaints and don’t underestimate the power of a dissatisfied customer: they have the unpleasant “habit” of gaining much more traction on social media than positive reviews.
2. Use content marketing to educate, inform, and empower your audience and your customers. Try to create an authentic community around your brand, not merely a Facebook group dedicated to people who have liked your page and purchased something from you at some point. Offer people the chance to express themselves through and around the products/services you’re offering and to connect to others with similar interests.
3. Create loyalty and referral programs tailored to your customers’ wants and needs and encourage them to keep on purchasing from you.
1. Always give your customers something to look forward to. Overdeliver on your promise. Use all the communication channels at your disposal to build a relationship based on trust with your customers. Set up a communication calendar to stay in touch with your customers and remind them of your eagerness to establish a relationship with them that goes way beyond the transactional moment.
2. Use retargeting and remarketing techniques to bring back first-time visitors of your website and friendly “cart abandonment” reminders to those who have come to your website and added something to their cart but never got to complete the order.
3. Personalize the whole on-site experience, including the micro-copy (the text customers see when there’s an error on your website, when they go through every step required to complete an order, when you feel like they’re about to leave your website too early, as well as the pop-up messages they see when they successfully complete an order or subscribe to your newsletter).
1. Deliver a great experience from the very first contact and, after you close the deal, keep in touch with your customers to make sure they return. Give them a “Welcome” benefit, such as a discount code or a gift card, to incentivize them to place a second order with you. Be friendly in your approach, reward them with freebies or special offers every once in a while, and always be transparent in your approach.
2. Make them part of your story and share your progress with them, show the length you are going to in order to satisfy your consumers, and never cease to remind them that they are the reason behind your success. Look for new and personal ways to reassure them that everything you do is meant to make their life easier.
3. Leverage the power of good storytelling to foster emotional connections between your brand and your customers. Trust and emotions are the primary drivers for a buying decision. Make sure you’ve got your people engaged on both of these levels.