In an e-commerce world loaded with competitors everywhere, the real business value lies in retaining the customer who decided to choose you. If finding and obtaining new customers is important to you, now is a good time to learn customer retention strategies that work and why returning shoppers are critical to your company’s success.
The first step to increasing customer retention is determining why your customers or clients are leaving in the first place.
Now, here’s three of the most important metrics that will help you with building a retention strategy:
A. Repeat customer rate – measures the percentage of customers willing to make another purchase from you. To calculate, get data from a specific time frame (entire year or month).
Divide: 1. Number of customers with more than one purchase by the 2. Number of unique customers (# of Customers That Purchased More Than Once / # Unique Customers)
Source: Shopify
B. Purchase frequency – shows you how often customers are coming back to buy from your store. Using again a time frame, divide your 1. Total number of orders by the 2. Number of unique customers. (# of Orders Placed / # Unique Customers)
C. Average Order Value (AOV) – refers to the amount of money a customer spends in your store on each transaction. Divide your 1. Yearly revenue by the 2. Number of orders your store processed (Total Revenue Earned / # Orders Placed).
Source: Shopify
Purchase Frequency x Average Order Value = Customer Value (how much each customer is actually worth)
According to KPMG, customer retention was cited as the biggest revenue driver:
Source: Superoffice
Customer Retention Tactics: 13 Ways to Build Customer Loyalty
1. Deliver a peak customer experience
A great customer experience is driven by a customer-focused culture. Providing a pleasant buying experience can be as simple as offering an easy way to pay. be responsive and attentive to your customers’ needs and inquiries. Simple actions makes repeats and referrals much more likely.
2. Determine the cause of quality issues to improve customer service
A bad experience with a customer service representative is the top reason customers will go to your competitors. Make sure to give the right level of service and information by designing support systems for effective communication.
Having a live chat or phone support for example can turn a query into a sale or a complaint into a resolution. Using a Customer Service Virtual Assistant for customer retention calls can help you with this continuous improvement.
3. Empower the most under-utilized assets—your employees!
Customer retention begins on the inside of the organization because it is felt by the customers on the outside. Truly engaged workers are your brand advocates who create customer loyalty. Businesses that treat their staff with respect, support, and appreciation will have a workforce that will take good care of the patrons.
4. Organize client lists and relationships
One of the ways to retain customers is by organizing your customer relations list. This is to ensure you’re constantly following up with them and encouraging them to purchase again through the use of newsletters, mailing, and networking.
5. Start an email marketing campaign
Speaking of client relationships, email marketing is the core part of your retention toolkit. Emails give you the opportunity to engage with your customers before and after sales. You can start by sending them a thank you email a week after their first purchase. Then, you can move on to recommending related products or asking for customer reviews.
6. Offer a discount or free item
Giving promos, special offers, and discounts can be an effective way to lead back customers that haven’t bought from you in a while. Surprise and delight them with a freebie, provide a better service, come in at a lower cost, and simply do more than they were expecting.
7. Find new and unique ways to create partnerships with customers
Make customers a part of your internal strategies such as getting their ideas, suggestions, and feedback on ways to improve their experience. Create forums or group chats for customer participation like customer advisory teams. An upbeat Social Media manager can help you design campaigns and invite target customers to participate in these online activities
8. Work hard and be quick to resolve issues
Not every product or paid service satisfies customers every single day. Accept that when the customer’s expectations haven’t been met, you must work hard to resolve the issues to their satisfaction. They will remember this and they will feel like their transactions are safe with you next time. Thus, turning difficult situations into opportunities to earn your customer’s trust.
Customers see fast, friendly, and consistent service as the gold standard. Click To Tweet9. Staying in contact post sale transactions
Best practices for keeping your ideal clients include collecting customer data and staying on their radar after sales. You can send your customers coupons or company newsletters so they remember they purchased from you and get them to come back.
10. Create a customer loyalty / VIP program
A lot of online retail shops now are using ‘rewards points’ as a way to motivate customers to purchase more often. When they see how easy it is to earn valuable points, they’ll be excited log in to your store to do it again.
Additionally, you can create a list of your most profitable customers so you can reward them separately. Let them know about the perks and incentives so they feel more special.
11. Smooth transaction through optional customer accounts
Provide the option to create a user account / log in after the first order has been placed. This will ease the customers buying process since they can review items on the cart, previous orders, and use pre-filled shipping information upon checking out.
12. Treat your customers/clients as individuals
Learning how to keep customers coming back can teach you one thing: Reaching out and treating your clients/customers on a personal level makes all the difference. Each one of them have different needs and wants and it is your duty to make an effort to get to know them more.
13. Hire the right customer service support
The “right” contact representatives are those with the perfect combination of knowledge, skills, personality and experience. As part of the applicant screening process, you can include a validated personality test to find the right match for your business. With this, customer satisfaction and transaction accuracy can be both improved.
Customer retention is a by-product of excellent customer service and experience. Be a reliable resource for your customers and offer a unique edge to give them a reason to want to come back.
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Reference:
www.superoffice.com
www.yotpo.com
www.ngdata.com
www.shopify.com
