Everyone knows that it's cheaper to retain a customer than acquire one, but most companies still focus their efforts on acquisition. It's important to not overlook the art of customer retention if you want your ecommerce business to be a sustainable one.
Unfortunately, customers generally aren't very loyal (unless you're Warby Parker). It takes a lot of nurturing to turn your newly acquired customers into brand advocates. Luckily, creating a strong customer retention strategy is fairly straightforward, and beefing up your current strategy can be accomplished in a few simple steps. Focusing on three key areas can help you either improve your current strategy, or give you a great start on creating a new one.
Email
Sending targeted follow up emails is a crucial step in retaining a customer that many companies often overlook. The concept is simple: after a customer makes their first purchase, you send a targeted follow-up email to re-engage with them.
This first email should be sent right after the purchase, when your customers are highly interested in your business (they did just make a purchase, after all). If there is something about your business you would like to tell them about, this is the perfect time to do so. Suggest similar products to purchase, share your latest blog post, or even offer a discount code for their next purchase. The key here is to keep them interested in your company while they're still "hot".
It can also be very effective to send abandoned cart emails to recover lost potential sales. Maybe the customer got distracted and didn't complete their purchase, changed their mind, or ran into difficulties checking out. The reason doesn't really matter, as long as you are sending out at least one abandoned cart recovery email.
75.3% of the top 500 ecommerce companies using abandoned cart nurturing send recovery emails within an hour of cart abandonment. 50% of those customers who buy from these emails do so within an hour of abandoning their carts. (source) Proving that timing is everything in your email marketing strategy.
Customer Engagement
High customer engagement levels are crucial to improving your customer retention rates. One of the best - and often overlooked - ways to build your customer engagement is through the only physical interaction your customers often have with your brand: the unboxing experience. (source)
Packaging used to be only a necessity of ecommerce. But now, it has become an opportunity for you to meet (and surpass) your customer's expectations.
The chances that packing an axe in a wooden box with real wood shavings is actually necessary is pretty low. You could probably get away with a more cost-effective solution. But the chances that your customers will remember your brand for the unique packaging and share an image of the product on social media are extremely high! User-generated content on social media drives more traffic to your brand and increases visibility and "social proof".
For even more ideas on how to increase your customer engagement, check out Bevel and Birchbox: They're doing customer engagement right.
Customer Service
The last, and arguably most important, way you can increase your customer retention rate is to provide exceptional customer service. A happy customer is more likely to return than an unsatisfied customer.
If Amazon is the company that pops into your head when we say customer service, good! Although they are a massive internet retailer, their customer service is impeccable. Even though you may not be the ecommerce powerhouse that Amazon is, you can still provide their level of customer service.
Customer service interactions are nearly four times more likely to lead to disloyalty than loyalty, so using a tool like Groove, Help Scout, or Zendesk is a great way to keep tabs on all your customer service requests and be sure every customer is taken care of. For more insight on how you can make your customer service department rival Amazon, check out this great post on competing with large brands by Alex Turnbull of Groove.
Putting It All Together
While these three areas are a great starting point, there is so much more in the world of customer retention. If none of these feel right for your business (or if you're already doing them), do your research and find out what you can do to drive up this metric. With 82% of companies saying it's cheaper to retain a customer than acquire one, you can't afford not to.