Ask any entrepreneur if they would do just about anything to retain customers. The answer would be a resounding, “Yes!” After all, customer retention yields several benefits. Statistics show that the possibility of selling to a returning customer can reach up to 70 percent. Moreover, almost 80 percent of business revenue will come from these customers whereas new customers might provide around 20-30 percent.
The best part about customer retention is that once you have recurring customers in the loop, they’ll share valuable input to improve or launch new products. In other words, customer retention is one metric that no entrepreneur should ever overlook.
Considering the value of retaining customers, here are seven highly effective strategies that’ll help you achieve strong customer retention rates.
1. Deploy smart customer retention techniques
Thanks to the rising popularity of e-commerce apparel stores, for example, buying clothes online has become popular.
Naturally, a satisfied customer will, not only return, he/she will also help market your products via word of mouth. However, there are proven tactics that can turn the returning customer guessing game into a strategic opportunity.
Research which customer segments are the likeliest to retain customers based on average order value (AOV). For instance, customers who spend $50 or more on their first purchase can be enticed to become recurring customers. This can be achieved by providing product recommendations, upselling or cross-selling complementary products, setting order minimums for a discount, offering a customer loyalty program, and bundling products or creating service packages.
Create a versatile and flexible retention strategy that can be used to attract customers in various market segments.
2. Use money saving incentives to boost retention
To improve customer retention, learn what customers look for when making online purchases. For many, online shopping is about convenience and savings (comparing and accessing better prices).
Most customers will always prefer e-commerce stores that meet their expectations and help them save money. To ensure savings they look for coupons, promo codes blogs, and marketplaces, and discount websites, like Overstock.com, ClothingRIC for apparel, to redeem the best offers.
Meanwhile, if you have a loyalty program, use discounts to reward loyal customers. “For example, when a customer spends a certain amount on your site, you can offer them a discount code on their next order as a thank you. One report shows that 76% of customers want personalized offers based on their purchase history.”
3. Develop a customer loyalty program
Acquiring a new customer is not an easy task, and it’s much easier to retain one. When you’ve invested in creating an exceptional customer experience, why not give customers a reason to keep coming back?
A quality customer loyalty program has clear goals and accompanying strategies. Customers flock to these types of programs when they’re executed correctly. Research shows the US alone has 3.3 billion loyalty program memberships and the average US household has 29 loyalty program memberships.
“After building a relationship, customer spend grows alongside trust. Eventually, loyal customers spend 67% more than new ones,” according to CMO magazine.
This is where a dynamic customer loyalty program can help. Simply put, a customer loyalty program offers promotions, prices, and exclusive products in exchange for repeat purchases. Research the best customer loyalty software for your business and test which works best.
For example, TapMango’s customer retention and acquisition platform will let you build your own branded rewards program. While Yotpo helps e-commerce brands collect customer reviews, photos, and Q&A from a single platform to increase boost loyalty and increase traffic, social proof, and sales. Also, online tools like Fivestars create a digital rewards program that gives customers points and gifts for their purchases. Then the app builds a set of automatically sent campaigns to welcome new customers, celebrate their birthdays, and bring back those who haven’t visited recently.
4. Send personalized retention emails
Email continues to be a profitable marketing channel for businesses large and small. Studies suggest “81% of SMBs still rely on email as their primary customer acquisition channel, and 80% for retention.”
Retention emails can include abandoned cart reminders, promotional offers, feature announcements, expiring trial notifications, etc. Using personalized and automated emails (and SMS marketing) to retain customers can encourage communication, reduce churn, and increase repeat purchase behavior.
5. Simplify online registration and checkout
There is no denying the fact that most customers find online registration burdensome. This is why it’s smart to offer a “Guest Checkout” feature and improve online registration overall.
Every e-commerce store owner should prioritize site registration over guest checkout when possible. If you want to increase customer registrations, it’s important to realize that “web shoppers aren’t looking to start a meaningful long-term relationship with the company that they have just decided to purchase from for the first time. Instead, when they decide to make the purchase, they want to get from shopping basket to the order confirmation page as quickly and efficiently as possible, without worrying about whether they will start to get bombarded with offers after purchasing.”
Start with a one-page registration form that is easy to complete. Make registration as interesting and painless as possible. Provide visible on-site links to “Create an account” and list value-driven benefits. Registrations are key to relationship building, which can improve customer retention rates over time.
6. Reduce shopping cart abandonment
Shopping cart abandonment is a common challenge faced within the e-commerce industry. “69.57% is the average documented online shopping cart abandonment rate,” according to Baymard Institute.
People abandon online shopping carts for a variety of reasons. Thankfully there are proven tactics that can decrease the likelihood of incomplete purchasing behavior.
Reduce cart abandonment by adding a progress indicator on the checkout page, provide standard payment options, deploy push notifications on-site, and use automated marketing software to trigger abandoned cart emails. Encourage purchase with a small incentive (e.g., 10-15% off for a limited time).
7. Leverage customer feedback
Once a customer makes a purchase, encourage their feedback on the overall shopping experience or key areas of their journey. The goal is to understand how well you’re meeting customer expectations.
Add a customer survey call to action on the “Thank you” or “Order Confirmation” page. Meanwhile, include a strong call-to-action in all emails related to order fulfillment and shipping. Keep the customer survey short, sweet, and to the point. Offer incentives for survey completion.
Retaining customers is essential to long-term growth, not to mention––it’s often cheaper. Consider these strategies as you look to build long-term relationships with customers.
Charles Crawford is the co-founder of Crawford and O’Brien. Charles has been studying internet marketing, web design, and tech startups for years, and he has been successful with multiple business ventures, including affiliate marketing.