If you operate an ecommerce brand, you probably already know that gaining new customers is only half the battle: The other challenge is holding on to your existing customers.
The average customer retention rate in D2C ecommerce — meaning the number of customers that place more than one order with your brand — is around 28%. So that means the average customer churn rate is 82%.
Every time a customer leaves after a single experience, you need to invest more into acquiring new customers, spending on advertising and cutting your profit margins with attractive promotions. It can cost a lot more to acquire new customers than it does to keep an existing customer: In fact, it’s anywhere from five to 25 times more expensive.
That’s why it’s important to put a strategy in place to cut customer churn so that you can grow customer loyalty and retention. Your loyal customers will help your business grow: Gartner found that 80% of a company’s revenue comes from just 20% of its customers.
Here are some best practices that can help.
Deliver a great customer experience
If you want to reduce customer churn, it’s important to deliver a flawless customer experience at every stage of the customer journey, from the first touch to the last.
To do this effectively, it’s important to provide a personalized customer journey that’s designed to maximize customer engagement at every touchpoint. For instance, if a customer has previously clicked on an ad for a pair of boots, you can use their customer behavior data to showcase customized promotions featuring similar types of shoes, or complementary clothing items that would pair well with those boots.
By building an omnichannel marketing strategy that uses different channels to engage them, including email, SMS messaging, push notifications, and social media advertising, you’ll be able to deliver customized marketing campaigns for each customer that are targeted to their unique preferences. By studying your customers’ behavior and seeing what they engage with, you can send them similar content that you know they’ll like.
It’s also important to take a great customer experience beyond marketing and into onboarding, customer support, and even the post-purchase cycle.
When a customer signs up for your mailing list, for example, you might send an onboarding campaign that collects their survey preferences so that you can send them personalized recommendations and promotions.
If a customer has questions about an item or order, you should provide them with numerous ways to get in touch – including live chat, phone, or email – if the situation requires live support.
For situations that don’t require specialized help, automation can help you boost productivity and solve customers’ problems more quickly.
Automate customer support and returns
By automating certain facets of customer support, such as order status requests and return requests, you’ll be able to empower customers to get the information they need and reach their goals faster.
For example, by using chatbots on your website, you’ll be able to provide your most frequently asked questions in a chat form, so customers can easily find the answers they need. You’ll also be able to quickly route them to the right webpage or department for additional support, using natural language processing to answer their questions.
You can automate the customer returns process by using a self-service returns portal like Loop. With Loop, customers will be able to click on a CTA to initiate a return or exchange request, with a menu that allows them to select a reason for why they’re returning an item. You’ll then be able to pull from your store’s real-time inventory to find a suitable replacement, such as offering the same product in the next size up if it was too small.
Loop also gives you the tools to incentivize exchanges over returns, by offering customers bonus credit for making an exchange that they can apply towards any product in your store. By encouraging customers to select an item for exchange, you’ll be able to reduce customer churn and retain revenue. Loop merchants typically retain about 40% of revenue by increasing customer retention through exchanges.
Get data insights on at-risk customers
By using a comprehensive CRM, you’ll be able to track metrics associated with customer behavior to understand when a particular customer is at risk of churning — also known as a customer churn analysis.
By uncovering data insights on why you’ve lost customers, you’ll be able to set up automated workflows that can help you do a better job with customer retention, such as offering a special promotion to customers who haven’t made a purchase recently, or even sending printed mailers to customers who haven’t opened your emails.
Incentivizing customer loyalty by generating special offers for lapsed customers, and delivering rewards to customers who continue buying from your store, will help you drive customer satisfaction and ensure that your existing customers continue helping you drive recurring revenue.
Focus on customer satisfaction throughout the customer lifecycle
By prioritizing the customer experience at every phase of their purchase journey, from their first interactions with your brand all the way through onboarding, and then into customer support and even the returns process, you’ll be able to demonstrate your brand values in a way that builds loyalty from new customers and helps you drive new customer acquisition.
Using technology, such as Loop’s automated returns management solution, to streamline customer support and automate common workflows will help you to meet customers’ goals more easily and quickly.
Want to learn more about using Loop to help you drive higher customer retention and lifetime revenue? Contact our team for a free demo.