Getting customers to make their first purchase from your store is struggle enough, but attempting to keep those customers as repeat or lifelong customers is an even bigger battle.
Customer retention is an issue that I’m sure every retailer is familiar with. There are millions of brands, stores, and websites out on the market today that can “steal” your customers now, so proper customer retention is crucial. By definition, customer retention is when a company makes attempts to prevent customers from defecting to alternative companies. Successful customer retention starts with the very first interaction and continues throughout the entire lifetime of the relationship. Customer loyalty is highly focused on building and maintaining a relationship.
Obviously, both customer retention and customer acquisition are crucial to growing your business and revenue; many companies tend to spend more of their marketing budget on acquisition, and it’s oftentimes more cost-effective to retain a customer than to acquire a new one altogether. When selling to current customers, you won’t need to spend the time and money attracting, educating, and converting new customers. According to Bain & Co. increasing customer retention rates by as little as 5% can increase profits by 25%-95%.
Now that we know how important and cost-effective customer retention is, let’s walk through some of the best strategies for ecommerce businesses…
Make Repeat Purchases Easy
Once a customer makes their initial purchase, there is a 27% chance of them returning to your store. If you can get that customer to come back for a second or third purchase, there is a 54% chance of them making another purchase. To encourage repeat purchases, make it simple for customers to check out again and again. You could do this by keeping their payment information and shipping address linked with their login information or with their browser cookies. However you choose to do this, just be sure to make it as simple as possible! If customers have to jump through hoops to make their second purchase, this can be a deterrent for them.
(via The Sweet Tooth blog)
Are you having some trouble receiving repeat purchases? Another way to entice customers to make their second purchase would be by offering a discount code or store credit to them!
Implement a (Good) Rewards Program
The point of a rewards program is to reward customers for being loyal to your company, which is exactly what you want, right? Try offering an enticing rewards program that will make your customers continue to purchase from you; make sure that it’s worth their wild! Please don’t have a loyalty program where you require your customers to spend $1,000 just to get $5 off their next order or something similarly crazy. Personally, I have seen a few programs that have pretty ridiculous reward tiers and it’s almost insulting as a customer. Why would I be intrigued and loyal to a company who has a rewards program that takes 5 years to accrue any benefits? (I’m being sarcastic here but you know what I mean!) We, as customers, want to know that the companies we are purchasing from care about our business and about us as people. A generous loyalty program will help get your customers to stay with you and feel cherished.
If you are interested in a rewards program and don’t know where to start, head over to The Sweet Tooth’s blog. They specialize in loyalty programs and have an abundance of knowledge and case studies on this topic!
Offer a Gracious Return Policy
One of the most frustrating things as a customer is dealing with a company who has a strict return policy. I understand it’s a hassle for some retailers to accept returns, but making your customer pay for their return shipping and charging a restocking fee can be a huge deterrent. Having a generous return policy can help with initial conversion rates and customer retention. When a shopper knows they have the opportunity to return a product if it doesn’t meet their expectations, it builds a trusting relationship that will result in customer retention.
In my opinion, Nordstrom has one of the most amazing return policies, and they have never let me down! I suggest doing what they are doing if you have the means to. I bought a pair of relatively expensive boots there, wore them twice and ended up hating them. I contacted Nordstrom with the hopes that they would accept this return (even after being worn!) and thankfully they did. Such a generous return policy will leave me, and the millions of loyal customers they have, purchasing from them again and again.
Provide Great Customer Service & Support
Having great customer service and support is always a good tactic to be implementing on your ecommerce site. It helps with customer acquisition and retention, an increase in sales, and decrease in returns. Since potential customers don’t have the convenience of being able to see products in person, they may have questions for you! Make sure you have customer support that is readily available for shoppers.
Amazing customer service and support will be extra important during the holiday season! Your holiday shoppers will be a little different than your everyday customers; they will be on a mission to get perfect presents for their loved ones rather than leisurely browsing your website. With speedy and helpful customer service, you will be able to assist them in the chaos of the holiday season.
Olark is a great system that lets you instantly chat with your customers while they are browsing on your website. It is the perfect way to provide great customer service and support! They have amazing features and insights that will help you better understand your customers as well, so be sure to check them out if you are in the market for an online chat system.
Like any successful relationship, you need to stay connected and keep in touch. Make sure you are interacting with your customers periodically, but don’t over do it because then it becomes spammy. Sending out recurring emails about promotions, exciting things happening at your company, or new products will help build a relationship with your customers, all while marketing your brand to them.
Try to keep in touch on social media as well! Social media is all about building relationships; the customers who like or follow you on your social media accounts are probably your most loyal customers. These are the people who want to hear more about your company, about new products and about the promotions that you have going on. Keeping in contact with your customers via social media will not only keep your brand on their minds but will also build your relationship with them.
Of course, retailers should never stop aiming to acquire new customers, but also make sure that some of your time and budget are going towards customer retention! Remember that attracting a new customer can be five times as expensive as retaining an existing customer. With the holidays quickly approaching, you’ll be getting mass amounts of traffic to your website and an abundance of new customers. This is a great time to implement some of these customer retention strategies!