The purchasing landscape continues to change, trending more and more towards digital purchasing — with retail eCommerce sales projected to reach close to $843 billion USD by the close of 2021. In 2020 there were an estimated 256 million digital buyers in the U.S. — according to data by Statista. Furthermore, the report projects that digital buyers will reach roughly 278 million by 2024.
Most online merchants are aware that they must prioritize their eCommerce marketing efforts to keep up with the economic trends of the digital marketplace. Online merchants are investing in mobile marketing, digital advertising, and in the optimization of their online storefronts to reach the digital buyer. Most of these efforts are made in the hopes of acquiring new customers.
The acquisition of new customers should always be a goal of any business looking to grow fast or meet short-term revenue goals (not to say it isn’t a long-term goal as well). However, customer retention is equally as important — and more cost-effective.
Customer Retention: What and Why
Simply put, customer retention involves all the strategies businesses use to retain existing customers; to increase the number of repeat customers. These strategies help businesses remain profitable and allow them to build brand loyalty, which has its own advantages.
Here are a few statistics on customer retention, taken from a survey conducted by Invesp:
- Businesses are likely to spend more attracting new customers then they are keeping the existing ones — 5x more.
- Nearly 44% of companies say that customer acquisition is their greater focus, compared to only 18% who say it is customer retention; 40% of companies say they are equally focused on both.
- Most companies, 89%, say customer experience is a key factor in customer retention and customer loyalty.
- Companies have a higher probability of selling to existing customers (60 – 70%) than selling to potential customers (5-20%).
- Existing customers are 50% more likely to try new products from a company they’ve bought from before.
- At 86%, paid search is the number one online marketing tactic for customer acquisition. Mobile messaging is the number one marketing tactic for customer retention — 58%.
The data is clear. Customer retention efforts are more than worthy of consideration. It often costs less in marketing efforts and the opportunity in revenue gains it affords while targeting existing customers.
Top 7 Customer Retention Tips
Most marketing campaigns aimed at customer retention focused on email, social media, and content marketing. Some focus more on mobile advertising. Many of these can be effective tactics when done right. Let’s look at seven of the top tips to help eCommerce businesses in their customer retention efforts.
#1 - Take customer feedback seriously
Most businesses understand the importance of customer feedback, but not all of them actually employ any means to actually acquire it regularly. Existing customers can provide critical information to make your business better.
This feedback can be gotten easily through short surveys, emphasis on short; even five questions are borderline excessive, no one likes surveys with miles of questions. This can be sent out through existing communication channels — email or linked text messages. Attaching incentives couldn’t hurt either.
Feedback information and questions should focus on the customer experience — ratings with optional comment boxes are always good. Questions could focus on:
- Shipping experience: Arrive on time, costs reasonable, etc.
- Website navigation: Easy to use, easy to find products
- Overall buying experience: From the landing page to checking out
#2 - Engage with them on social media
Social media cannot be ignored in the digital age. An eCommerce business without social media profiles should be an oxymoron. People are constantly on social media. Customers have made it a habit to follow businesses they’ve purchased from to keep up to date on new products, existing products, and events such as sales.
Online merchants looking to build a brand following, and brand loyalty, must engage with them where they are. Social media engagement does not always have to include expensive advertising campaigns (those have their place).
Engagement is simply engaging; answering questions, talking to, conversing with your customers on social media. That doesn’t mean using a dry chatbot conversation template; it means real people are having real conversations. Sometimes, it’s the little things that have the biggest impact. Talk to them.
#3 - Highlight brand loyalty
Closely tied with the tip above, customers enjoy sharing products and brands they love on social media. Take advantage of that. If a customer shares a (good) picture of themselves on social media using or wearing a product of yours and tags you, share it. Of course, permission must be granted first, but most are eager to allow it. Let their reach help your reach.
#4 - Don’t be stingy with promotional offers
Most people enjoy a good deal. Existing customers have already shown that they find some value in your product. Promotional offers and discounts are simply a way of saying, “Thank you.’ But throw them a curveball.
Many people expect promotional offers to come around during certain times of the year: Winter sales, Summer deals, Cyber Monday, birthday discounts, etc. That is fine. There are consumer spending statistics to back up those reasons.
But sometimes it's good just to surprise them. Reward them simply for being your customer — no special occasion besides that. It doesn’t have to be fancy. It could simply be an exclusive offer or discount for existing customers only. Make it timely, though – must use this offer by…
#5 - Loyalty for loyalty
In a similar vein as the promotional offers, customer loyalty programs are always a good idea for businesses to employ to retain existing customers — 70% of consumers are more likely to promote brands that have customer loyalty programs.
These loyalty and reward programs need not be complicated, though they depend on your business’s size and scope. Perks and discounts are among the most effective means to reward existing customers. These programs can be tiered; more rewards for customers who spend more, which in turn incentivizes the desire to spend more.
Another way to reward, without discount on products, is allowing existing customers to participate in the development of new products or designs — give their opinion. It is simple but effective. It can provide a sense of ownership and increase brand loyalty.
#6 - Know thy customer
This tip is simple — strive to care about the things they care about. Of course, you must first understand the scope of your own business and industry, and you must stay true to your brand, but people are loyal to brands that share their interests.
This could be corporate, social, or environmental responsibly. Showing you are committed to helping solve or advocate for important issues goes a long way with retaining customers — they do notice.
#7 - Don’t neglect SMS marketing
Text messaging marketing can be an effective tool for any business. Developing a strategy to use it can have a big impact on customer retention. Most, if not all, of your customers have already opted in to receiving communication from you—most expect it to come from email. But text message marketing and email marketing are not created equal. Text messages are an effective option where email falls short.
Most promotional emails marinate inside of inboxes for days, even weeks. Some remain unopened as they are thrown into the virtual trash can. Text messages are not so easily ignored. Check out some of these statistics from the Business 2 Community:
- The open rate for email has an average range of 28 – 33% for most customers. What does that mean? It means nearly 70% of emails are even opened — ignored or deleted.
- However, the average open rate for text messages is a staggering 99%. It is hard to ignore that text notification, isn’t it?
- The text message response rates among customers are roughly 45%, compared to 6% for email.
- The average click-through rate (CTR) for email 7%, compared to 36% for linked text messages.
SMS marketing cannot be ignored. If you are trying to reach existing customers, whether it’s for survey feedback or promotional offers, text messaging is an effective strategy.
An extra tip for SMS
In addition to its marketing value, SMS messaging can also be used to combat the abandoned cart issue, which most online merchants experience at some point. Cart abandonment is usually due to unanswered questions — questions about shipping, product descriptions, etc.
At LiveRecover, the abandoned cart is our specialty. We employ real-life people to contact and engage those abandoned cart customers through personalized text messages — to help retain the would-be customer and recover the sale. Contact LiveRecover to learn more about how you can integrate it on your eCommerce platform.