Many online retailers focus large percentages of their marketing spend on acquiring new customers, and in an age when the eCommerce sphere is so competitive, it’s easy to understand why.
But what about those customers who already know, trust and love your products? Doesn’t it make sense to focus more on those? Our friends at Loyalty Lion have kindly shared their top tips on how to retain existing customers and explained why you should focus your efforts on doing so…
With an estimated 1.8 billion people purchasing goods online, you may be wondering why there aren’t enough customers to go around. Unfortunately, the truth is that the ecommerce industry also grows by 13% annually – that’s 13% more competition to fend off each and every year. And, with retail behemoths such as Amazon taking up more and more of the market share, getting your brand in front of new customers can be a struggle.
As a result, many retailers fall into the costly acquisition trap. They feel like they need to spend more just to get more eyes on their brand. But with only 9% of digital adverts being viewed for more than a second, clearly, these strategies aren’t quite hitting the mark.
But what if you were to turn your attention to the customers you already have? All in all, it costs five times less to retain an existing customer than it does to acquire a new one. Plus, these customers have a higher lifetime value. Research from LoyaltyLion shows that the top 53% of a store’s revenue comes from just 20% of its customers. These customers already know and trust your brand and are happy to spend their hard-earned cash with you. So what can you do to keep this 20% returning?
Encourage people to do more than just spend money
Retention strategies should give your customers more substance beyond spending. A loyalty program can help you establish an emotional connection that shows you care about your customers beyond securing their next purchase. You can offer rewards for non-transactional activities – such as creating an account or site visits – to show your customers they mean more to you than just the cash they spend.
You could also show them that you care by staying in touch after they’ve converted. Send loyalty emails post-purchase that show product recommendations. This could be an item related to their first purchase, or something they showed intent to buy. By serving up relevant, personalised content, they’ll be more excited by what you have to offer and will be encouraged to return to spend with you.
You could also use these emails as an opportunity to build rapport with your customers. Say ‘thank you’ for their purchases and ask them for feedback on your service. This shows you care about what the customer has to say, and that you’re keen to take it on board. When customers feel like they’ve had a hand at making a difference, they’ll be more likely to return to see the positive changes.
Create a community
According to one study, by 2020, the customer experience will overtake price or product as the main brand differentiator. To keep your customers returning, you’ll need to think of smart ways to differentiate the shopping experience you serve up.
65% of customers buy on the basis of their beliefs and will be loyal to a brand that meets their emotional needs. A loyalty program allows you to build a community of like-minded shoppers that share similar values. Annmarie Skincare, for example, use their loyalty program to communicate what their brand stands for and to foster a sense of community. By naming it the “Honest. Wild. Beautiful. Tribe”, customers can easily see the three values the store lives by. The word “Tribe” also makes shoppers feel like they belong to something bigger.
TheCHIVE gamified its blog to reward customers for community-based, on-site activities – such as photo uploads, scoring and social sharing. They leveraged their loyalty program to create a customer experience that their community are excited by and want to return to. As a result, they now attribute 6% of their annual revenue to their loyalty strategy.
Build up social proof
One big blocker that may be stopping customers from completing a purchase is trust. They may not believe the integrity of your sales messages and imagery as they haven’t bought from you before. As it turns out, your existing and happy customers could be a way to build bonds with a curious shopper base and dispel any doubts they may have.
Use your loyalty program to reward these retained customers for leaving product reviews or referring friends to your site. As a result, new shoppers will have a bank of social proof to draw from when making their purchasing decisions.
Also, customers who are referred by friends or family are four times more likely to complete a purchase than shoppers acquired through other means. They also spend 200% more as they’re more predisposed to trust your brand. They know that the person who referred them personally had a good experience with your store and they expect to receive the same.
With the fight for new customers getting fierce, it’s important to think of new ways to use what you already have – an active and engaged customer base. By implementing some of these retention strategies today, you’ll establish customer loyalty for the long-term.
LoyaltyLion is a data-driven loyalty and engagement platform trusted by thousands of ecommerce brands worldwide. Merchants use LoyaltyLion when they want a fully customised loyalty program that is proven to increase customer engagement, retention and spend. Stores using LoyaltyLion typically generate at least $15 for every $1 they spend on the platform.