As every ecommerce merchant knows, winning a customer over and encouraging them to make an initial purchase is only half the battle – the bigger win is when they come back a second, third, fourth, or fifth time.
Customer acquisition is expensive, and most brands won’t survive for long if they need to rely on an entirely new set of customers for each purchase cycle.
A Shopify survey found that a business in the health and beauty space will spend an average of $127 in marketing costs to acquire a new customer, for instance. If all that customer ever buys is a single tube of $20 lipstick, you’re coming out way behind.
The goal, then, is to ensure that you have enough loyal customers to make up for the ones who only try out your brand once. If that $20 customer is counterbalanced by a customer who spends $600 a year over a period of four years, your loyal customer will more than compensate for your losses on the one-time shopper.
So how do you encourage more of your customers to stick around and invest in your brand? Here are a few strategies for boosting customer retention.
- Create personalized marketing promotions for your customers
In order to encourage customers to buy from you again, it’s important to demonstrate that you understand what they’re looking for, with personalized messaging and offers that meet each customer’s unique needs. For example, if a customer purchased a lip gloss, you might send them a special promotion offering a buy two, get one free offer so that they can select even more colors from the same brand at a discounted price.
- Use the marketing channels that your customers prefer
Beyond personalizing the content, it’s important to customize the delivery method, too. When customers sign up for SMS messaging, don’t miss the chance to engage with them on that channel. If they use your app, you can also make the most of in-app messaging to showcase your latest offers. Or, if they follow your brand on social media, focus on delivering promotions to your social followers that will help them re-engage. Look beyond the inbox when it comes to connecting with your customers, and meet them wherever they are.
- Build content that educates and informs
If all you have to send your customers are sales emails, they’re going to get fatigued pretty quickly. Instead, supplement your promotional content with content marketing that provides value to your customers by giving them useful content that they’ll care about, without being sales-focused. For instance, if you have a brand focused on outdoors gear, you might develop a video series all about camping 101 – encouraging customers to learn more about new pursuits that they’re likely to use your products to explore.
- Give customers rewards and perks for remaining loyal
Developing a digital customer loyalty program is an ideal way to incentivize customers to stick around for the long haul. With a loyalty program, you can let customers earn points for every purchase, as well as actions such as sharing your posts on social media or watching videos on your site. The points can be redeemed for discounts, products, and other perks, so customers will be motivated to hit certain spending levels with your brand.
- Identify customers who are likely to churn, and win them back with special offers
By analyzing your CRM data to understand which customers are likely to churn, based on historical data, you’ll be able to create a segmented group of “at risk” customers who you’ll need to make a concerted effort to re-engage. You can identify customers who haven’t clicked on a link or visited your site within a certain time frame, and send them a high-value promotional discount to encourage them to make another purchase and re-engage with your brand.
- Transform returns into exchanges
One crucial part of the sales process is the post-purchase experience – especially if a customer decides not to keep a product they purchased from your brand. It’s important to give them a great returns experience, as 95% of shoppers say a positive returns experience would encourage them to buy from the retailer again.
Beyond making it a seamless experience, come up with opportunities to incentivize your customers to make an exchange, rather than requesting a refund – even if that means offering “bonus credit” that customers can put towards a new product from your brand. Remember, spending a little extra to retain a customer can help you preserve that customer relationship for life, making it well worth the cost.
Why customer retention matters
By improving your customer retention metrics, you’ll be able to gauge your brand’s sustainability and profitability more accurately, and can significantly lower your marketing costs.
When more customers stick around long term, you can cut your marketing spend, knowing that your loyal customers are likely to keep buying from you and referring your brand to friends and family members. And when you know you can rely on a certain portion of your customer base to continue buying at a predictable volume, you don’t need to worry so much about the uncertainties of how different marketing campaigns might perform, and can experiment so that you can optimize for the most successful efforts.
A high customer retention metric also means you have a high rate of customer satisfaction – a sign that you’re doing things right. By demonstrating that you value your customers and continuing to come up with personalized ways to engage them at every touchpoint, you’ll be able to boost your retention rates and see your profits grow.
Want to see how Loop can help boost customer retention? Check out a demo.