Acquiring new customers is ultimately more costly than retaining existing customers and this is why you need to focus on creating an ultimate customer retention strategy.
Technological advances have led to increased competition online for user’s attention; from competitor websites, to comparison websites and booming social media channels. More and more companies are not only unable to grow existing customer base, but are also fighting to keep the customers they have.
If you are looking into ways to retain your existing customer base, then look no further. Included in today’s post is the Ultimate Customer Retention Strategy for eCommerce.
Customer retention is extracting as much value from a customer, boosting something called lifetime value. Lifetime value is exactly what it sounds – it is the value that each customer brings to your business or a prediction of the net profit attributed to the entire future relationship with that customer.
If you paid a lot of money to acquire customers (through advertising, social media marketing, affiliate program) and then you lose them, then all of that effort was for nothing. According to the Harvard Business School increasing customer retention rates by just 5 percent can increase your revenue by between 25 and 95 percent. If your retention rate is low it should become your immediate priority.
How do you increase your customer retention rate? Here is a short guide.
- Social media retargeting
- VIP or loyalty programs
- Cart abandonment campaigns
1. Social Media Retargeting
Custom audiences on Facebook allow e-commerce marketers to target their existing customers and anyone that visits their site. All you need is to install the Facebook Pixel and you will be able to track every person that visits your site and add them to your Facebook audience automatically.
Then you can create highly targeted campaigns to target your site visitors, to receive multiple impressions per person and increase your sales.
One brand, in particular, is using social media retargeting for this purpose. eClincher is a social media management tool that uses Twitter ads to remind customers to come back and use the software. They are able to receive impressions for half a cent each! Social media advertising is still very cheap so definitely consider it for your business to compliment your email strategy!
That’s a creative campaign. What do you mean to read that? Read what? If you already know about eClincher and are familiar with their founder you will definitely want to click on that link.
2. Create a VIP or Loyalty program
Creating a VIP or loyalty program is a great way to build an online community and increase your brand loyalty. There are several ways that you can do this.
- Special discounts
- Early bird access to new products
- Exclusive events, webinars, meetups
- Rewards for referring friends
Here is a great example from Sephora. I like the line “addicted to beauty”, that’s creative. Also, the email keeps it mysterious, it’s not a generic discount, it’s not a list of products. It’s a Pandora’s box that opens to a loyalty program. “Join the club” – wow that’s enticing.
This is probably the most effective way to increase your customer retention rate. Send out an email every time a customer abandons their shopping cart in haste. Make it fun, don’t go with the generic “we missed you”.
Below is a great example of cart abandonment email from Asos. It reads “don’t forget about me..” with the call to action button text being “get me”. This is completely on brand for Asos and makes customers engage with the email and go back to shopping for their favorite clothes.
On average, the cost of losing a customer is $245, according to KISSmetrics. That’s expensive! Think about how many items that amount equals.
Our ultimate customer retention strategy allows you to put in effort and money to retain them. Time to boost repeat purchases, provide an excellent customer and brand experience.
The three most effective ways to do that is through social media retargeting, creating a loyalty or VIP program, and crafting excellent cart abandonment emails.
If you use these three techniques correctly you will see your traffic and purchases sky rocket.