Beginners Guide to Customer Retention Strategies. If you own a B2C company, you understand how difficult it is to gain new clients, with the cost of acquisition continuing to rise. You’ve probably heard this before but finding new clients is more expensive than getting current customers to make a repeat purchase.
Retaining a client costs 5X less than acquiring a new one for many businesses, especially in the crowded eCommerce, where the cost of clicks and conversions seems to be rising all the time. As a result, client retention is critical to the growth of your eCommerce business.
But when was the last time you searched for ways to re-engage consumers and encourage them to return? If you haven’t built a consistent customer retention plan, now is a perfect moment to start. So let’s have a look at where to begin.
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What’s the Difference Between Customer Retention and Custom Attraction?
Many companies make the mistake of over investing in client attraction. True, if you don’t attract new clients, your company may go out of business, but on the other hand, attracting customers is not the key to business growth.
Of course, generating new leads is essential, but your primary focus should be retaining existing clients. Because according to various studies, current customers account for 68% of all purchases.
Don’t rely on gimmicky customer retention strategies which get consumers to your website, complete a purchase, and then go — with no intention of returning. Instead, business owners should never underestimate the value of a devoted consumer base. According to Brandongaille, 12 – 15% of consumers are devoted to a single merchant, yet they account for 55 – 70% of sales.
Customer retention is the act of engaging current consumers and persuading them to return to your brand properties to shop or continue using your services. Customer attraction or acquisition focuses on obtaining new customers (leads), whereas customer retention produces income from current customers.
Customer loyalty is also relative in this equation which refers to your consumers’ willingness to continue purchasing. Loyalty programs encourage them to increase the client lifetime value (CLV). When properly designed and implemented, it raises revenue and, more significantly, improves client retention rates.
What Are the Benefits of Client Retention Strategies?
Customer retention provides several advantages for your online business.
- A better ROI: research reveals that a 5% improvement in customer retention may raise revenue by 25% to 95%, depending on the industry, product, and other factors.
- Savings: Customer retention is typically less expensive than new customer acquisition. A high customer retention rate translates into a more excellent client lifetime value and cheaper customer acquisition expenses.
- Positive Word-of-Mouth: Loyal consumers are more inclined to recommend your company to their friends and relatives.
- Stay Competitive in the Marketplace: There are dozens of new businesses for every consumer demand, with more appearing every day. E-commerce is a multi-trillion-dollar sector, only the best players can outperform the competition, and retention is key to being elite.
But your customer retention rate won’t increase on its own, so it’s crucial to invest the time, energy and money into the following digital marketing tips and trips so you can start optimising your business and putting your customers at the heart of your organisation today.
5 Requirements for A Successful Client Retention Strategy
Before adopting a client retention plan, you must first put the following in place.
- Investigate what your consumers want and don’t want. Analyze your current marketing strategy current and previous campaigns, and create judgments based on the results.
- Incorporate previous customer feedback. Before you begin, make sure you include your customers’ input into your product/service. Digging into the customer’s historical data, previous surveys, and so on would be an excellent approach to guarantee this.
- Examine the elements that might influence repeat purchases. For example, investigate your customers’ data and activity on your platform (website/app). For example, is it recently acquired consumers eager to transact for the first time? Or the repeat buyers? Analyse product preferences, transaction history, buy frequency, and behaviour parameters to encourage repeat purchases from existing consumers.
- Remove the obstacles to growth. Getting rid of barriers is an essential step in ensuring the success of your client retention activities. Minor but important issues, such as your web page loading slowly, poor customer reviews, a lack of the necessary technology to perform your campaigns, and so on, must be addressed before creating and implementing client retention methods.
- Determine what else you can provide to your clients. Do you offer things that complement what your consumers have already purchased? For example, is it possible for your company to upgrade its customers? Is it possible that your consumer may demand a different product to enhance their product consumption experience? Make a list of all potential upsell and cross-sell possibilities.
Now, let’s look at some tried-and-true client retention tactics that can help you boost your retention rate from existing customers.
Strategy #1: Reward Your Devoted Consumers
Customers that return to your platform and buy your product or service several times without researching other possibilities on the internet are the most crucial cohort to increase your retention game. These are your brand evangelists, with whom you should maintain frequent communication and make them feel appreciated.
Here are some methods you may use to reward your loyal customers:
- Incentivise your devoted consumers.
- Provide special discounts for birthdays and anniversaries.
- Commemorate the buyer-brand anniversary
- Request and reward product reviews in the app store.
Strategy #2: Target Your Inactive Customers and Encourage them To Come Back
Examine your user data and the purchasing history of your inactive clients. Identify the trends and take action on the reasons why consumers became drowsy and never returned to your site. Re-engaging with inactive clients increases their chances of purchasing from your platform again because they were previously customers.
Here are some campaign ideas for reactivation:
- Campaigns for birthdays
- Discounts on special occasions
- The most recent app updates
- We miss your campaigns with topical material
Strategy #3: Create A Social Networking Community
Building a social media community is a two-pronged system that helps keep customers connected with your company while also acting as word-of-mouth when people discuss your brand on social media. Here are a few suggestions for growing your social media community:
- Utilise user-generated content
- Request customers to share their experiences on social media.
- Run Twitter and Instagram competitions.
- Begin a trend, filter or challenge and invite others to join in.
Strategy #4: Utilise Automation Tools to Optimise Your Workflows
Since there are so many processes that must be done daily to keep your brand fresh in the minds of your customers, it takes time to monitor and control your consumers informed manually
Automation allows you to interact more effectively and quickly, while manually engaging clients will result in a higher conversion rate. Automation is the process of having part of your processes performed automatically by the software and allowing your business to sit back and relax while the software re-engages your consumers.
Do you offer to send helpful email newsletters to your clients twice a week, as well as SMS to new customers? If so, explain to me how you’ll perform all the tasks without automation.
If you’re ready to take your customer relationship management to the next level, standardise your processes with marketing automation tools, and you will be able to deliver on the promises you make to consumers.
You can manage your customer relationships, drip-feed education emails, plan promotional emails, SMS messages, and event notifications using automation.
Strategy #5: Make Use of Consumer Feedback to Optimize Your After-Sales
The customer journey does not end at the point of purchase, and neither should your CRO metrics. Do you keep track of NPS ratings? Do you send out product review requests or solicit feedback on product delivery? Your consumers will be pleased to buy from you again if these optimised procedures.
Surveys are effective instruments for increasing consumer involvement. However, surveys may appear to be tedious, yet people enjoy them. “The average response rate for email surveys is 24.8 per cent,” according to Fluid Survey University. In addition, there are various advantages to using email surveys.
Hearing directly from consumers to learn how they feel about your products and services is a terrific approach to strengthening the existing bonds. In essence, it may aid you in the creation of compelling, personalised content for client retention.
Customers share their thoughts and sentiments about your brand when they can express themselves. First, determine which areas they are dissatisfied with and why; changing those areas may help turn things around. Their input is all you need to progress from a poor or average company to a renowned brand. Remember that you may re-engage a consumer who is on the verge of abandoning your business via feedback.
I hope this comprehensive guide to customer retention strategies – from a Leading Digital Marketing Agency in Sydney – helps you develop a more successful digital marketing campaign with some creative ideas on how to increase your profits and brand without wasting too much capital on trialling and testing.