You’re just gonna let customers churn? Driving retention during a downturn.
Customer acquisition is one part of your challenge as a retailer – but the even bigger hurdle is customer retention.
How can you sustainably grow your business and get customers on board with your brand for the long haul, rather than just opportunistic purchases whenever you have a great deal?
In our recent webinar, Loop’s president, Aaron Schwartz, talked to leading ecommerce experts about what it takes to build a brand with legs, especially given the difficulties many brands are facing with a potential recession, data privacy issues, and the reduced ROI of third-party ad platforms.
The webinar featured these panelists:
Nik Sharma, Founder & CEO @ Sharma Brands
Kyle Hency, Co-Founder & Former CEO @ Chubbies
Yaw Aning, Co-Founder & CEO @ Malomo
Amanda Massello, Director, DTC Strategy @ The Stable
Aaron Schwartz, President @ Loop
Here’s a recap of some of the most compelling takeaways from the discussion:
Focus on retention, not profitability Hency recommends taking a long view of your business – don’t stress as much about your profit margins month to month; instead, focus on understanding your customer retention levels, and look for opportunities to grow them. The higher your customer retention is, the less you’ll need to invest over time in advertising, and the more sustainable your brand can be.
Capture your own zero-party data Massello states that customer acquisition has become more difficult because of changes in privacy and tracking capabilities, and it’s also become more expensive as a result. She recommends shifting the focus to capturing your own customer data (“zero party data”) through quizzes and guided selling via text messaging, chatbots, and other personalized communication strategies.
Segment your customers for better data insights Sharma says that another important factor of zero-party data is that “in six months you can look back and say, all our customers that have X in common, what’s their retention like as a whole, or how do they react to sales or, how do they, how do they compare with sales that are discount-focused versus giving 10% to charity?” By focusing on different user attributes, including channel of acquisition, demographics, online behavior, and others, you’ll be able to identify commonalities between users that will help you build customized messaging strategies to drive heightened engagement.
Gain insights from customer review data “I’m hearing a lot more of companies using product review data to support customer acquisition strategies, which is an uncommon thing to think about. What are customers actually saying about the product that might give insights into what their preferences are, what they care about, that you can extract and then put back into your marketing funnel?” says Aning.
Build a community around your brand Make sure that your company has a unique story and values that can help you engage customers and keep them invested in their journey with your brand. “There’s gotta be some reason or angle that people have to get excited about,” says Sharma. “It’s the brands that have built a great foundation, not just a product, that are around for the long haul.”
Focus on the top of the funnel In order to build online experiences that are compelling to your customers, it’s important to connect with them before they’re ready to buy. Sharma describes a launch strategy for a shower filter, Jolie Skin Co., in which customers are invited to get a free report on the water quality in their location. Even if the customer isn’t ready to buy then, the brand is able to capture these customers’ data so that they can market to them later when they’re running a promotion.
Expand into retail Many brands have found a more sustainable strategy by moving away from exclusively ecommerce sales and expanding into retail channels. “Retail unlocks a different type of scale, and unlocks a different type of consumer than the person that goes to your .com,” says Sharma. “We’re hearing from some brands who are already selling both online and in-store, with the volatility of paid media, some have chosen to keep their budgets flat or drop them and work more at revitalizing those retail relationships, because consumers are ready to leave their houses and shop in stores,” adds Massello.
Want more tips on how to build a sustainable sales strategy and reduce your customer churn? Book a demo.
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