Keeping a customer is so much cheaper than acquiring a new one- a discussion for eCommerce
Customer trust precedes loyalty. You must engage your customers first, provide them top-notch service, and make sure always to offer additional value with your products. These may seem easy, but the difference between brands that survive and those that don’t is consistency.
Businesses thrive because of their consumers. Loyal customers are essential in keeping your business relevant, and having a loyal following can set your brand apart.
Customer retention strategies are key in ensuring your existing customers stay and get even more value from you. You want them to continue coming back for great experiences, happy with how they were treated by the company as well as what was given out when it comes time for their next purchase!
Customer retention, by definition, is the process of continuously engaging your clients into purchasing your products. Having a high customer retention rate contributes to the overall growth and ROI of your business. It helps turn yours into a sustainable brand based on a long-term relationship with your consumers.
Customer retention rate is computed as the following:
Retention Rate = ((E-N)/S) x 100
Whereas E is the number of customers at the end of a specific period, N is the number of customers acquired during that specific period, and S is the number of customers at the start of a specific period.
Take note of this formula and ensure that your company’s customer retention rate remains at a high and healthy level. Remember, a high retention rate equals success, and the average retention rate for the Retail industry is at 63%. With eCommerce, there are new customer experience strategies around deliveries on a subscription basis that, of course, are focused on keeping customers another month. There is also plenty of data you collect and leverage to move the needle.
Customer Acquisition vs. Retention
In thinking about allocating resources and time, Shopify provides a useful timeline of your store’s potential investment levels, highlighting when you should focus on acquisition and when it’s wise to channel your marketing efforts on retention.
The first three stages highlight acquisition
Of course, these are the stages when you have just started your business, and you would need to focus on getting your first few clients. These stages are all about building and growing your customer base, bagging as many sales, and collecting as much customer data as you can. These early stages are when marketers usually use most of their budget in promoting and gaining traction for the brand. Choosing a niche and positioning yourself in the market starting from scratch would require many ad placements and social media visibility.
Take note that at this point, you are only starting to introduce your brand to the market, and you have no customer list yet. Your ad placements and content do not have a basis up to this point, so the goal would be to reach as many audiences as possible. Generalized types of content usually cost more, which is one of the common risks you would face in starting a business.
As customers start to notice your brand, you collect data from them, and then you use these to promote your products through follow-up campaigns further. At this point, the goal is to convince them to make a second purchase, or hopefully, with good customer service and engagement, get them to promote your brand online using their channels and social media accounts.
Once you notice your sales are on a consistent upward trajectory, this is when you should consider a more automated marketing approach and campaigns that would be more rewarding to your loyal customers. This is about giving back to your returning customers, and at the same time, hooking them into staying loyal to your brand because customers value brands that make them feel special and provide a sense of added value in their every purchase.
The last two stages are more about retention strategies
Some of the challenges for these stages are keeping your brand relevant and keeping your customers happy and engaged. Most eCommerce stores disappear as instantly as they become a hit, and this is because they fail to grow their brand along with their consumers. You keep your customers engaged by providing new products based on their needs, which means you need to predict their needs. When customers find a store they already trust and that offers amazing products, they tend to look within your store first and check if you have something else they need. They then turn to another brand once they find out you don’t.
The last stages mentioned by Shopify do not have to be as costly as the first three stages, but only if you use the right automation tools and strategies for maximized marketing campaigns. Your customer data would allow you to reach out to your customer through targeting and personalization effectively.
Guide loyalty campaigns with customer data
Today, one of the most efficient and powerful marketing tools is AI-enabled customer data platforms that turn customer data into unique profiles and customer segments. These segments get used to develop targeted content for the appropriate audience. VIEWN’s customer data platform uses advanced AI to analyze the volumes of data continuously gathered from all available channels. This analysis transforms the information into advanced segments and customer personas and then is used for targeted lists for cost-effective yet effective campaigns.
Automating customer experience doesn’t mean setting it and forgetting it, however. Keep a tab of your customer metrics and the changing needs, and understand what can move the needle from your customer data. Insights built from a CDP need to be actionable so you can keep those loyal customers happy.