Most conversations about e-commerce marketing revolve around customer acquisition techniques, like paid search and paid social.
But customer retention is equally important to the success of your e-commerce store.
Why customer retention is crucial for e-commerce?
There’s a bunch of reasons, but here are the two most important.
Lower cost per conversion
On average, retaining a customer is five times cheaper than acquiring a new one.
So, a product that costs around $50 to acquire a customer through efforts like paid ads, would, on average, only cost $10 for a repeat purchase of that same product.
Your existing customers are already in your owned audience channels, so you don’t have to use costly methods to get them to make another purchase.
Instead, email and SMS marketing usually do the trick here.
You can focus more on growth efforts
New customers are… new.
They’re not familiar with your product, and don’t have much experience dealing with your brand in the first place.
Old customers? They’ve probably referred your brand to their friends and have a whole lot to say about your brand.
This directly translates into being able to focus on more growth efforts. For example:
- When you want feedback. You can simply reach out to your existing customer base, specifically the ones who have purchased upwards of two times.
- When you want to start a loyalty or referral program. Your existing customers are likely going to spearhead this mission.
The truth is you can’t neglect customer retention efforts when trying to grow your e-commerce store.
Most e-commerce businesses can’t stay profitable without returning customers. So make sure you’re investing as much in retention as you are in acquisition.
Customer retention strategy #1: Email and SMS
Here are three ways you can use these platforms to keep your customers coming back.
Strategy 1: “Thank you” email
When is your customer’s dopamine at an all-time high? When they first make a purchase, of course.
They’re looking out for emails from you, and they’re more likely to be responsive to them, too.
In the thank you email, send them a discount code or free product with their next purchase.
Strategy 2: Send recommendations
On email or SMS, send recommendations to products on your website that you think they’d like.
You have to make sure your recommendations are actually things that would interest them, of course, so segment your audience based on their interests, or based on a quiz they filled out.
Then, include a discount code in the email in case they want to buy your recommendation. It’ll help push them over the edge.
Strategy 3: Build anticipation
The best part about email and SMS marketing is that they’re low-cost, especially when compared to other marketing channels like paid social and paid search.
Take advantage of this by building anticipation around new launches or sale periods that your e-commerce store is having.
Then, on launch day, you may already have a list of interested customers waiting to make a purchase.
To sum it all up, customer retention is all about using creative ways to keep your existing customer base strong. What better way to contact them than via email and SMS?
Customer retention strategy #2: Loyalty programs
Now let’s talk about how to set-up your loyalty program for success, and use it to keep your customers coming back.
Step 1: Make onboarding easy
Whether you’re using a software plugin that sets your loyalty program up for you, or you’re creating one yourself, onboarding has to be simple.
The quicker customers can join, the sooner they’ll start earning rewards.
Step 2: Create a clear point system
Nothing frustrates people more than an unclear loyalty program that they don’t know how to use.
Make your point system obvious.
Pro tip: Send them an email explaining everything once they’ve onboarded.
Step 3: Emphasize exclusivity
Offer exclusive member-only sales, products, or even events.
You want your customers to feel like they’re a part of something.
And, as always, encourage them to refer their friends to the program—and give them generous points incentives to do this.
And don’t forget to keep sending those email and SMS reminders that keep them engaged.
Customer retention strategy #3: Customer success
Out of all the strategies for customer retention, the most important one is customer satisfaction.
You can create all the loyalty programs and email flows in the world… but your customers won’t come back if they didn’t have a good experience with you.
Here are some small but effective ways your customers can feel more taken care of by your brand.
Strategy #1: Be there when needed.
- Use various channels: You want to meet your customers where they are, which means you need to be available on email, live chat, and social media.
- Answer quickly: The faster, the better. You want to solve their problems as soon as they have them.
- Follow up with them: Check in with customers post-resolution. You want to make sure their issue is resolved, and that they can reach out to you when they need to.
Strategy #2: Show your appreciation
A member of The Crew once ordered jewellery from a store she had bought from before.
When she opened her package, there was an extra piece inside, and a letter thanking her for coming back and buying more.
And now, she buys almost exclusively from that jewellery shop.
The most important thing of all
You want to help them when they’re in need, and show them little acts of appreciation for their business.
Oh, and don’t forget to have a well-written FAQ page that they can browse themselves when they need help.
You don’t want to force them to speak to you if the answer is common and simple.
Bottom line
Customer retention is underrated revenue channels that is worth putting effort in.
Now go and retain those customers!
