Between tasks like PPC advertising, content marketing,, and similar strategies, merchants spend a considerable amount of time trying to bring new customers to their store.
While maintaining a steady flow of new customers is something that retailers should pursue, doing so at the cost of is not advisable.
The reason for this is that existing customers are going to be the driving force behind a brand’s growth. Therefore, improving customer retention rates is a massive opportunity for scaling an eCommerce brand.
For those who have somehow not stumbled across the data already, there is which found that increasing customer retention rates by a mere five percent can produce more than a 25 percent lift in profits.
Moreover, if a company’s eCommerce retention marketing strategies are done well, they could, thereby transforming mere customers into advocates who help to pull other consumers into the fold.
To help retailers turn this hope into a reality for their company, today, we will explore why businesses should focus more on eCommerce retention marketing, as well as some strategies that sellers can deploy.
Why eCommerce Retention Marketing Is Important
Let me count the ways.
The plain fact of the matter is that there are scores of benefits to adequately implemented eCommerce retention marketing strategies.
Some of the most prominent include:
It’s Easier to Sell to Returning Customers
Much of the driving force behind previously mentioned data that highlights the financial impact of reducing churn rates is that returning customers are far easier to sell to than prospective customers.
This fact is by:
“According to the book Marketing Metrics, businesses have a 60 to 70 percent chance of selling to an existing customer while the probability of selling to a new prospect is only 5 percent to 20 percent.”
Therefore, is far easier than getting customers to convert in the first place.
Increased Customer Lifetime Value
In a nutshell, customer lifetime value is a metric that highlights how much a customer is worth to a business over the lifetime of their relationship.
Naturally, increasing customer lifetime values directly correlates with an increase in eCommerce revenue.
Therefore, relying on a constant stream of one-time buyers is not a prescription for growth. Instead, by implementing eCommerce retention marketing strategies, sellers are effectively and enabling their business to expand.
Moreover, higher customer lifetime values signify that customers enjoy the brand, its products and user experience and want to continue doing business with the company.
Repeat Customers Cost Less and Spend More
Most folks who begin looking into eCommerce retention marketing strategies quickly learn that than it does to retain an existing one.
Therefore, once merchants spend the money necessary to, it is in the seller’s best interest to hang on to that customer for as long as possible.
Moreover, once a retailer convinces a customer to come back and make a second purchase, those individuals are likely to buy even more in the future, in part due to the trust that has been established between the company and the customer.
When looking at how much new customers spend versus how much repeat customers spent, research has shown that than first-time buyers, on average.
What this ultimately means is that eCommerce retention marketing provides retailers with a (relatively) inexpensive means of creating a sustainable source of revenue that allows the brand to increase its market share and digital footprint.
Customer Retention Stabilizes Revenue
When a brand has a devout following of customers, it gives the company a sense of security as the business can generate a reasonable idea of how much it will earn in a month.
Alternatively, when merchants are dependent upon constantly attracting new customers, profits can fluctuate drastically. At the same time, the business could suffer significantly if it is unable to attract as many customers as are needed for a given period of time.
But again, with loyal, existing customers, the business can create a relatively stable source of income while simultaneously reducing acquisition costs.
Loyal Customers Can Drive Customer Acquisition
Part of the reason that customers opt to make repeat purchases with a brand is that the company has become credible in the eyes of the shopper. The on-site experience was acceptable, the product worthy of the financial trade, the delivery process matched expectations and so forth.
Once customers come to trust a brand in this way, there is a good chance that they will not only purchase from the company again, but they could potentially become brand advocates as well.
In fact, it is quite likely that satisfied customers will inform their social circles about their interaction with a business, given that.
As Forbes details on the matter:
“While 30 percent of consumers who have had a negative customer experience say they would share it on social media or post a negative review online, nearly half (49 percent) of consumers who have had a positive customer experience say they would share it on social media or post a positive review online.”
As a result, shoppers who had a favorable experience with a company are informing others that the brand is likely worth their time and money, thereby helping to drive customer acquisition.
With this kind of word-of-mouth marketing, retailers are getting the best possible bang for their buck as the money spent on eCommerce retention marketing strategies not only serves to reduce churn rates but brings in new customers as well.
With the importance of customer retention outlined, let’s go ahead and turn our attention to how merchants can actualize this information by implementing retention tactics that work.
Five eCommerce Retention Marketing Tactics
Given the multitude of benefits that eCommerce retention marketing can provide for a brand, retailers will likely be happy to hear that there are a variety of tactics that they can utilize to achieve these goals.
Some of the most popular and influential of the bunch include:
1. Implement a Referral Program
As mentioned earlier, retention marketing often has the dual function of helping to acquire new customers in addition to retaining existing ones.
One of the best ways to achieve these tandem benefits is to implement a referral program. Through such an implementation, retailers can incentivize their existing customer base to get their friends and family to shop with the company as well.
By providing a benefit for existing customers and new shoppers (such as dollars off coupons for both parties), merchants can successfully delight their current shoppers and immediately begin instilling loyalty in new customers.
2. Improve Customer Service
While only 30 percent of folks who have a bad experience with a brand will post about it online, the other 70 percent will just find another company with which to do business.
In fact, as far as customer service is concerned, a stunning. A detailed breakdown of this figure shows that:
- 27.9 percent would be extremely willing to switch companies
- 32.7 percent are very willing to find a new brand
- 35.5 percent say they are somewhat willing to leave for a competitor
Understanding this sentiment, it is critical for retailers to elevate their customer service to be absolutely top-notch.
There are a variety of tactics sellers can implement to achieve this aim, including:
- Send personalized replies
- Provide multiple means of contact (phone, email, live chat, social media, etc.)
- Turn unsatisfactory experiences into unforgettable moments
- and provide 24/7 support
- Actively ask for customer feedback
3. Introduce a Customer Loyalty Program
One of the most effective eCommerce retention marketing tactics is to implement a customer loyalty program.
In fact, there are. However, one of the most compelling is its impact on customer retention.
As far as the impact of these types of marketing efforts goes, a stunning say that they are more likely to remain with a brand that offers a loyalty program.
Part of the reason that customer loyalty programs are such an effective eCommerce retention marketing tactic is that they incentivize consumers to remain loyal to the company, providing perks like discounts, cashback offers, points that can be redeemed for a variety of things and a slew of other benefits.
Through this type of setup, consumers are getting the most bang for their buck, and retailers are, too.
4. Employ Personalization Strategies
eCommerce personalization tactics are a powerful force for helping to retain customers. After all, the more relevant a shopper’s on-site experience, emails, offers, and the like, the more likely they are to want to shop with a business.
Moreover, through the use of services, website implementations like personalized recommendations, wish list features, and other elements that help to tailor the experience to the individual, sellers can easily create curated shopping interactions that are likely to increase satisfaction, revenue, and retention.
5. Leverage Customer Feedback Surveys
Surveys can be a powerful tool for helping to enhance a business and retain customers long-term.
The fact of the matter is that hearing from customers directly provides sellers insight into how they feel about the company, its products, on-site shopping experience, marketing efforts, and the like.
If and when customers are given a chance to express themselves, they are likely to reveal their true feelings about a brand. If those consumers complain, this is excellent news as it provides retailers with a clear roadmap on how to improve operations and increase retention rates.
That said, obtaining customer feedback may require a bit of coaxing as not everyone is keen on spending time giving feedback as people lead busier lives than ever before.
Therefore, it is wise for merchants to incentivize providing feedback with offers of free shipping on a customer’s next order, a gift card, dollars off discount, or some other perk that is enticing enough to be worthy of the customer’s time and energy.
Important eCommerce Retention Marketing Metrics
While all of the previously discussed retention strategies have proven effective time and again, retailers will be unable to determine how well they are working with their particular audience if they do not know which metrics to measure.
That said, some of the most essential eCommerce retention marketing metrics that merchants should pay attention to include:
- Percentage of Returning Customers: Naturally, this is the percent of customers that return to buy after their initial purchase. This metric allows sellers to see how effective their retention marketing tactics are at getting customers to come back and buy.
- Purchase Frequency: This metric measures how often customers purchase from a retailer in a given period of time. In conjunction with the percentage of returning customers, retailers can see how many of their customers are coming back and how often. Through these insights, sellers will be able to target customer behavior patterns to optimize sales and increase average order values.
- Average Order Value: This is the sum of the value of all of the brand’s orders for a given timeframe, divided by the total number of orders placed in that period. This metric can help merchants to evaluate their online marketing performance and pricing.
Effective eCommerce retention marketing tactics are one of a retailer’s most effective tools in scaling their business.
While customer acquisition is a necessary pursuit, retention marketing is the driving force behind eCommerce growth and success. Through personalized campaigns such as segmented email blasts, retailers can cultivate increasingly relevant shopping experiences that inspire shoppers to come back time and again.
As a result, retailers are likely to see significant gains in their average order values, customer lifetime values and overall eCommerce revenue.
That said, understanding how to effectively segment customers and reach them with compelling messages that convert is a different story entirely. If your brand wants to ensure that its retention tactics are successfully supported through sophisticated personalized campaigns, reach out to.
Our team of professional eCommerce email marketers can help your company to produce tailored email campaigns that deliver the right messaging to the right people at the right time.