5 strategies to boost customer retention
There’s almost no better feeling than seeing a new customer place their first order with your store. Almost - how about that customer loving your brand, products, and experience so much that they place orders again and again?
With rising acquisition costs, retention is the backbone of any successful online business. 57% of customers spend more on brands they are loyal to, and those loyal customers are 50% more likely to try new products and spend 31% more than a new customer.
However it isn’t just a one-and-done kind of deal, a true retention strategy considers how to enhance the entire customer experience throughout from first order all the way through to their tenth order, even fiftieth order, and beyond.
Here are our top five tips for how you can improve your strategy, delight your customers, and drive retention.
#1 - Create an onboarding process using email and SMS
What you do with email and SMS to engage your customers will set the tone for your relationship whether it’s a new customer or a returning one. Many think of onboarding as something you only do for new customers, but in fact there are many opportunities to do that process over and over again.
Let’s start with new customers. Once they’ve placed their first order, put them into a welcome drip campaign that will send them a series of emails to introduce them to your story, ethos, and community. This will allow them to truly get to know your brand, and understand your values and products beyond just their transactional emails. This process can be automated using a workflow, where you can monitor metrics like open rates and tweak content as you learn more about what your customers engage with early on.
Then there are product onboarding emails, and these can be implemented for both new and existing customers. These are a series of emails triggered based on the first time a customer purchases a specific product. These emails will instead introduce the customer to the new product they’ve purchased. If you sell beauty products, it might be about routines or the best way to use it. If you sell apparel, then it could be how to care for a specific garment. These product onboarding emails can also help avoid customer support enquiries and returns. If a customer understands how to use or care for a product, they’re less likely to run into any issues.
You should also look to build on your email onboarding using SMS that encourages a customer to respond. This might simply be asking if they’re enjoying a product with a “yes or no” response, or even asking the customer if they have any questions about their order.
#2 - Develop a strong loyalty program
Incentives are a great way to bring customers coming back to your store. The go-to in ecommerce is usually discounts via email, as a sort of “we’re missing you!” or “thank you for your loyalty!”. However, there’s more to incentives than discounting. The average consumer actively engages with more than 6 loyalty programs at any one time, and 79% say being part of a loyalty program makes them more likely to continue doing business with a brand.
Loyalty programs allow you to do more with incentives, and test which work best for different customer segments. Customers who have placed a couple of orders may respond best to discounts, whereas customers who have placed many orders over a long period of time may prefer free products. Equally, you can control how large the incentive is depending on the customer’s AOV (Average Order Value) or CLV (Customer Lifetime Value).
To develop a truly strong and engaging loyalty program, you need to answer a few key questions:
- What system will you use? Tiers, points, etc?
- What rewards will you offer?
- How will you leverage personalization in your program?
- How will you promote your program?
- How will you encourage engagement with your program?
The more robust the answers to these questions, the better your program will be and the more your customers will engage with it.
#3 - Enhance your post-purchase experience
What happens after checkout impacts customers’ perception of your brand. They could have an amazing experience on your site, and getting to checkout, but if you don’t give them a top tier delivery experience then they’ll quickly forget everything that came beforehand. Investing in your post-purchase experience will benefit both acquisition and retention as new customers will love it and continue to use it over and over again.
Here are some straightforward ways to enhance your post-purchase experience, many of which can be part or fully automated.
Send more emails beyond transactional
Many brands only send basic emails after a completed purchase - order confirmation and dispatch notification. However, customers really appreciate more communication about their orders, especially around key times like the holidays or if they’re ordering for a specific occasion e.g. a birthday gift or something for themselves for school or going on vacation. Extra emails may include a “we’re preparing your order” notification, “your order is out for delivery”, and even a little bit of product education i.e. “Your order has arrived! Here are some FAQs about what you’ve got”.
Offer real-time tracking
Not knowing where your order is can be a frustrating experience. Even if the fault lies with the courier and not the store itself, customers will still view that as part of their brand experience. Some couriers have complicated tracking instructions, others don’t give a lot of detail, and this can cause confusion for customers especially if you use multiple couriers to offer different services. Offer them your own fully branded tracking experience to provide consistency across orders, and real-time information so they can be assured their order is on the way.
Be creative with packaging
One big way to differentiate your experience from that of a larger retailer or marketplace is by giving your customers a memorable unboxing experience. Between custom packaging, branded inner packing materials, handwritten thank you notes, and more, you can do so much to enhance the customer experience from the moment the order arrives on their doorstep.
Follow up on experience
If you don’t ask customers about their experience, how do you know what you’re doing right? Feedback is essential to being able to improve and build on your customer experience. It’s also a great way to show customers that you care about their opinions, and demonstrate to them that you want to continually make changes to make their next experience even better.
It doesn’t take a lot of effort to make the post-purchase experience memorable, and the rewards you’ll see with retention will be worth it.
#4 - Use subscriptions to provide the ultimate convenience
Subscription commerce has fast become a huge opportunity for merchants looking to boost retention and engage their customers in a meaningful way. Offering your products as a recurring delivery option or as a curated box can be of great benefit to both your store and your customers.
On the merchant side, you’ll have a relatively predictable, steady stream of monthly recurring revenue from your subscribers as well as a highly engaged base of loyal customers. These customers will be more likely to try new products and spend more when they look to buy outside of their subscription. For customers, subscriptions can be a highly convenient way to receive products which they use regularly, or as a fun surprise to enjoy at home. Especially if it’s a product they use frequently, adding the convenience of a subscription will enhance their overall impression of your store.
That being said, that positive impression will rely on the subscription management experience. In order to maintain retention in subscriptions, you need to delight customers by doing the following:
Provide easy, straightforward account management
Give your customers a really clear dashboard from which they can manage their subscription account. Let them see upcoming deliveries, what they need to do to change them, where they can update details etc. The easier the management, the better the experience.
Offer flexibility in subscription options
Customers’ needs change over time - one month they may want to skip a delivery, the next they may want to add some products to their order as a one-off. Giving them the flexibility to tailor their subscription to their needs is vital.
Maintain excellent order communication
Your customers have a lot going on in their lives, and a subscription may not be at the front of their mind. That’s why it’s important to maintain a high level of communication, especially when a subscription is about to renew. Send texts and email to let them know their delivery is due and where they make changes. This will save any frustrations, and improve your relationship with subscribers.
These are all simple to implement, and will have a big impact on subscriber retention in the long term.
#5 - Use data to tailor your strategy to each customer
Personalization is big in ecommerce - 89% of digital businesses currently invest in it, and for good reason. Personalized content can reduce acquisition costs by as much as 50%, and it’s becoming the standard expectation for customers. 66% of customers expect brands to understand their individual needs and preferences, and 74% feel frustrated when site content isn’t tailored. Almost half will also turn to Amazon if they feel that a brand’s site isn’t providing them with relevant recommendations.
Luckily, you have access to a wealth of first party data from your store and owned marketing channels (email and SMS). You can leverage this data to provide the tailored experience your customers expect across their entire journey. This may come in the form of on-site product recommendations, adding them to specific email flows based on shopping behaviors, or even tailoring the kind of rewards they get from your loyalty program. You can segment based on factors such as demographics, geography, browsing or purchase history, loyalty program engagement, gift purchasing and more. Go a step further and conduct A/B testing within these different segments to determine the most effective messaging and content for each customer.
The more granular you can get, the better your personalization strategy will be and the more engaged your customers will be. This will lead to stronger relationships, improved experiences, and ultimately better retention rates.
Customers these days have a huge selection of stores they can shop with both online and in person. It can be tricky to earn their loyalty, but the reward of doing so is huge for your store’s continued success. By delivering additional value through subscriptions, better communication, loyalty programs and more, you can offer them a truly unmatched experience that will bring in those repeat purchases for years to come.