It is very clear and obvious that every online store owner knows the value of every customer. Many online store owners follow a strategy that says getting an old customer to repeat the purchase is less expensive than finding new customers. It’s maybe effective for many businesses but it’s not a strategy to follow all time.
But the strategy we must always work on is to always turn new customers into repeat customers. And this is what definitely meaning of customer retention.
Firstly let’s define customer retention and its main role.
Customer retention is the collection of actions a business uses to increase the number of repeat customers and increase the profitability of each current customer. Customer retention also has a huge impact on the way a business is run.
Customer retention strategies let you easily create and derive more value and profits from your existing customer base in the cheapest way. You want to make sure that the customers you worked hard to get to stay with you, that they have a great customer experience, and that they continue to get value from your products. This is what customer retention can do.
And the question here is what are the benefits of customer retention and it is can be measured?
The answer is yes there are measurable benefits to know how much your customer retention is effective:
- Acquisition costs: Acquiring a new customer can cost up to five times the cost of maintaining an existing customer.
- Lifetime value: By connecting with your customers emotionally, you can see a customer’s life values four times greater than they would without that personal touch.
- User Experience: A strong customer experience can prevent up to 84% of customers from leaving something as simple as returning a product.
And you may ask yourself When to focus on customer retention?
When you decide to focus more on retention is completely affected by where your store is positioned in its lifecycle timeline. A newly started store is very different from a store that has been in operation for many years.
General guidance on your store’s lifecycle timeline.
1. Fresh started: When you’re just beginning your store, there’s one thing you must focus on, gaining customers and make all your efforts to meet their expectations. At this point, acquisition efforts should completely trump retention. Focus on tactics and plans that will help you grow your customer base.
2. Gaining Momentum: You now have clients and irregular sales. At this stage, you can begin offering retention items to encourage each customer to buy more and more from your brand. This can begin with email retention campaigns focused on supporting a previous customer to buy from you again.
3. Constant: You are not an e-commerce giant, but sales are growing. This is the point where you should start thinking about mixing in more retention with your acquisition efforts. You could consider starting a loyalty program.
4. Already Established: You are now an established e-commerce store and have customers of your own. A common problem for retailers of this size is finding ways to sustain and sustain growth. Retention strategy, its role at this point, can cause customers to buy more often which in turn increases their lifetime value. At this point, you need to be serious and careful about your retention experiences.
5.Fully Established: At this point, your store has passed the initial challenge. You’ve had many early successes and have a lot of processes and automation in place. Now is the time to put your focus on retention.
Approaches to increase customer retention.
Enhance your customer support.
Support systems help you communicate efficiently with your customers and provide them with all support they need. The support system can assist both pre-and post-sales by enabling you or a customer service representative to communicate clearly with the customer.
Start a customer loyalty program.
Loyalty programs sometimes are parallel to customer retention programs, both are an effective way to increase purchase rate because they motivate customers to purchase more often in order to earn valuable rewards.
Offer a discount or credit for encouraging them to return
Tailored discounts for your current customers.
Making tailored discounts for your customers for their next purchase after their first-time order is a great way to nudge them to come back as they feel they are special. As such, a discount can also be an effective way to bring back customers who haven’t purchased for a long time.
Customer base is the most effective way and approach to keep your business growing, so your customer base is your capital and the best asset your business has. So focus your time and energy on enhancing the experience for your customer and give them the feeling that your first goal is to delight them.