Customer retention strategies
February 13, 2017 | Shares:

10 Customer Retention Strategies That Keep Customers Coming Back
10 min.

Retaining customers is the ultimate goal for any business. Whether online or offline, ensuring that customers are satisfied is critical for long-term success.

Improving customer retention may sound simple. In reality, however, the eCommerce world is full of competition.

Hundreds of thousands of similar companies are targeting the same customers that you’ve worked so hard to earn.

Worth of customer retention

As you can see in the above chart, the value of returning shoppers to your store is critical for long-term success.

Not only does a third of the overall money spent online come from returning customers, but they spend nearly 3 times more than one-time shoppers as well.

To stay relevant and keep your faithful customers happy, you have to know how to optimize your customer retention strategies.

If you already have a strong customer retention strategy, there are plenty of tiny tweaks to significantly improve customer retention.

Sometimes, however, starting from scratch or trying out new tactics can be the best way to get optimal results.

Here is a detailed guide for the 10 best customer retention strategies to keep your shoppers coming back time and time again.

What is customer retention?

Before we delve into the tactics and best practices of retention strategies for customers, let us first get a better understanding of what it actually means.

Customer retention rate is the metric of how well a company is able to keep the lifespan of an existing customer over a period of time.

Companies oftentimes fail to realize that it is much easier and cost effective to focus on keeping existing customers happy, rather than acquiring new ones.

Whether your company has a successful customer retention rate or not, there are always areas in which every eCommerce company could improve.

We take a closer look at some of the best strategies to keep those existing customers coming back for more.

Strategy #1: Develop smart customer retention techniques

Before you consider implementing any new ideas for improving customer retention, it’s a good idea to dive into your data and see which cohorts of customers are being retained and try and learn from it.

Let’s look at an example.

Let’s say that you find that customers who spend more than $50 in their first purchase get retained at a much higher rate than customers who purchase less than $50 in their first purchase.

This insight would tell you that if you can increase the size of the first order of customers, you will retain them at a higher rate. You could provide a coupon for first-time shoppers or improve your upsell offerings.

The “more than $50 in the first purchase” is an example of a cohort but don’t stop there: spend time diving into many different cohorts because every business is different and you never know what you may find.

By learning from who is currently being retained, you can develop improved customer retention strategies that allow you to work smarter, not harder.

Strategy #2: Engage and respond with customers

Most online businesses today have a number of channels for communicating with customers. Email, Twitter, Facebook and plain old telephone are the most common but the number of channels is growing all the time.

One of the easiest things that you can do to improve your customer retention tactics is adopting a policy in your company that no customer engagement is ignored, and a response is sent in as short a time frame as your resources allow.

If you don’t have a community manager who is actively monitoring social media, make sure the responsibility falls under whoever is responsible for Marketing and PR in your company.

Ensuring that your eCommerce business has an effective omnichannel strategy will go a long way in addressing all customers needs throughout social media.

Leverage these tools to improve your customer engagement strategies and reach a larger number of fans and existing customers.

Remember the mantra: no engagement left behind.

Strategy #3: Use content marketing to improve customer retention strategies

In this episode of Moz’s brilliant Whiteboard Friday video series, Rand Fishkin points out that we are biased towards the products and services to which we are exposed to.

When it comes to making a choice between different services or products, we usually go with the products and services which we have heard about from friends or stumbled across while browsing the web.

By ramping up your content marketing you not only reach a wider audience of potential customers but you will also remain at the top of mind of your existing customers who are then more likely to be retained.

Content advertising is a massive topic on its own, but I want to leave you with 3 actionable items that will help you put out higher quality content to improve your customer retention techniques today.

Experiment with longer, more actionable posts

The customer marketing landscape isn’t like it once was.

Simply producing content is no longer enough to cut through all the noise and bring in positive ROI. Adopt the mindset that every piece of content you produce needs to be a homerun.

The best way to do this is produce content which you, yourself would read and share with your friends. This is the best test.

List and how-to posts drive more shares and engagement than thought-leader posts, and if you are an expert in your niche, producing longer-form pieces with tons of action items shouldn’t be too difficult.

Invest in distribution

It doesn’t matter how good your content is if no one sees it.

Whether it be optimizing your content for SEO, or sending it to relevant bloggers, getting as many eyes on your content as possible creates a ton of traffic for your website.

Invest in finding the right marketing channels and spend the time to learn how to leverage the numerous free and paid ways to distribute your content

Listen to members of your niche

Spend time on Twitter, Google+ and other communities relevant to your niche to find commonly discussed topics that you can write about. Use the Skyscraper technique to propel your entire content marketing efforts to new heights.

Strategy #4:  Don’t be afraid of the phone

You’ve probably heard you should be doing things that don’t scale.

One of the many unscalable things you can do to really create an impact with your customers is to get on a call with them.

Not only will you generate useful feedback that you can use to improve your business, but you will also stand out to customers by showing that you really care about their needs. These are powerful tools that very few companies are implementing.

In order to do this in an organized way, try sending emails out to a bunch of your customers and include a link to a calendar synced booking page.

Strategy #5: Give loyal customers special perks

People like to feel special and be part of exclusive clubs.

Invite-only services, fraternities and job titles are all part of this psychological game we play with ourselves, and it is something you should consider leveraging in your business.

Rewards club improve customer retention

Setting up an exclusive VIP club takes time and money but will help differentiate you from your competition and if done well, will bring you positive returns by increasing customer loyalty. To set up your exclusive VIP club, follow these steps:

Reach out to high performing customers

Add valued return customers to the program in order to get it off the ground. Make sure you inform the customers via email and provide them with some kind of giveaway, coupon or something of significant value. You want to welcome them to the exclusive club and educate them on the future benefits of being in the program.

Be in contact with customers on the rise

Start adding other customers which have shown potential, but aren’t quite among the highest performers just yet.

Have a dedicated VIP page

Advertise the club on its own page. The idea is to market it to everyone but only select customers get the benefits of being in the club.

Keep it exclusive

Don’t wear yourself thin and invite too many people to the club. The idea is to keep it small but highly engaged.

Track Progress

Track customers in the program and see how their buying habits change as a result of the program

Personalize the process

Once the club is a nice size you can start sending them customized, personal emails with product updates, company news, special promotions, and other things your top tier customers would like to know.

For examples of companies with their own VIP and loyalty programs check out the posts listed below:

  1. 5 loyalty program examples from the fashion industry
  2. 7 customer loyalty programs that actually add value
  3. The Craziest Examples of Brand Loyalty

Strategy #6: Go the extra mile for your customers

Seth Godin is one of the most well-known, influential marketers of his generation. He has written a variety of best-selling books, including Purple Cow. The focal point of Purple Cow is that in order to be remarkable in today’s world with all its distractions, you need to stand out.

The easiest way for you as a business owner to stand out is by going the extra mile as often as you can. In fact, it should become a mantra within your business that every employee adopts and works towards.

Here are some tips to go the extra mile:

  • Write a letter to thank each of your customers for making their first purchase.
  • Follow your customers on social media (Twitter is the best for this) and engage in their conversations. Your aim should be to provide help in any way you can.
  • Record all customer feedback, complaints, and social media communication and use this information for engagement opportunities. An example of this would be if a customer provided great feedback on a product and you took that feedback and used it to improve the product. After the change is implemented you could reach out to the customer and thank them and show them that their feedback was used to improve a part of the business.
  • If you see cases where customers are referring their friends or mentioning you on social media, go out of your way to thank them. Be personal and thank them each in a unique way.
  • Leverage your VIP/loyalty program and thank customers who have impressed you either from a sales or word-of-mouth marketing perspective.
  • If you are traveling in a city where you have a lot of customers, invite a few of them out for lunch or for drinks.
  • Follow up with all complaints, even if they are resolved quickly. Showing that you care and want to make sure everything is taken care of is going that extra mile.

Customer retention tactic: resolve the complaint

Strategy #7: Use target marketing to your advantage

There are some amazing email and marketing services out there which allow you to use the information you know on your customers to target them with personal and optimized marketing campaigns.

I highly recommend you check email marketing services if you consider email an important channel for communicating with your customers. Below is a list of some of the cool things you can do:

  • Send a specific newsletter to all your customers who haven’t made a purchase in the last 30 days.
  • Send an email to a customer who abandons their shopping cart.
  • Send an email recommending similar products 5 minutes after someone buys a specific product.
  • Send different newsletters to users in different countries in their own language.
  • Provide coupons and special discounts in your emails to users who are part of your VIP club.
  • Send a drip campaign of useful content and/or instructions on how to maximize the enjoyment a customer can get from your product or service.

Strategy #8: Improve customer experience

There are numerous components to improve your customer retention strategy throughout the consumer decision-making process. From when they land on your site for the first time, to when they first experience your product or service, each of these impact how much customers want to come back and interact with you again.

Customer experience pyramid

Below is a comprehensive list of all the different components of your customer experience. You should take one area at a time and spend time on improving it. This should be an ongoing process which never ends.

There is always work you can do to increase customer retention and create a positive customer experience:

  • Design of your site (color scheme, layout, emphasis of each element, fonts, styles etc)
  • Device compatibility (is your site mobile and tablet friendly?)
  • Loading time of your site
  • Navigation options
  • Size and usage of images
  • Copy
  • Purchasing funnel
  • Customer service communication (includes follow-up, professionalism and meeting expectations)
  • Packaging of your product
  • Usability of the product or service (does it do what is advertised and expected from the customer)
  • Shipping time and delivery (does it get to the customer when it should)
  • Quality and relevancy of your marketing communication
  • Transparency (are you hiding certain fees or not sharing the entire truth with your customers?)

Strategy #9: Share testimonials with the world

Storytelling has always been a great way to market because people can relate to it. A story isn’t a sales pitch, but rather people telling relatable stories.

Testimonials and case studies will make it easy for you to tell your story in a way which can be easily absorbed by existing and potential customers. I recommend setting up a dedicated testimonials and case studies sections on your site.

Case studies are also great content pieces for your blog. I also recommend not calling this section case studies but rather “customer stories” or a softer, less B2B phrase.

Yotpo specializes in helping business owners generate tons of user-generated content in the form of customer reviews and testimonials. To find out more how Yotpo’s Mail After Purchase and site review emails automate content generation check out this guide.

Beardbrand understands the importance of customer retention strategy

Check out the list below to see how UGC can be utilized in multiple areas of your eCommerce business:

What can you do with user-generated content?

1. Push them to social media to drive traffic back to your site – Yotpo’s social push feature makes this easy and it can even be automated.

2. Show your ratings & reviews on their corresponding product pages or across your entire site in a floating widget – Yotpo’s on-site widgets have you covered.

3. When a customer writes a meaty review, reach out to them personally and ask the customer if they would be willing to answer a few questions for you over email so you could feature their story with your product on their blog.

4. Analyze your reviews on a monthly basis and record trends that you find. This will help you identify pain points in your business and certain insights which can make a massive difference to your business.

Social proof is a solid customer retention solution

Feature certain reviews or customer photos on your conversion pages in order to show social proof which will help you increase eCommerce sales.

Learn more on how to increase retention for your business

Strategy #10: Create Meetups and offline events

Nothing can replace actually meeting your customers face-to-face.

As a business owner, you will be able to strengthen bonds, increase customer trust and get useful feedback that would otherwise be lost.

Pinterest is one of the most well-known social networks in the world today and boasts a massive active user base of over 40 million.

As impressive as Pinterest is today, they started out like everyone else, with a small, dedicated fan base that they had to grow, one individual at a time.

One of the most useful tactics Pinterest used to build a customer community were meetups. Meetups were set up at local boutiques where fans of the service would gather and have conversations about the different creative projects they were working on.

Whatever your niche, your marketing strategy should consider setting up a local meetup where both fans of your brand can come together and engage with each other.

Tips for a successful Meetup:

  • Invite experts in your niche to participate and give short presentations to the participants
  • Use a service like Meetup.com for all the registration and invitation based infrastructure.
  • Provide snacks and drinks.
  • Don’t oversell your service at the events. The fact that you are hosting is enough to get your name out, and if you are providing constant value the event will do wonders for your eCommerce branding anyway.
  • Make the event a recurring experience so that people can know when the next one will happen, and it can even turn into a routine for your most loyal customers.
  • Try and find a venue that will host it every time so people don’t have to find out how to get to the new location each time.
  • Make sure all the sound and other logistics are organized way ahead of time.

Conclusion

The ten techniques I covered are only some of the many different things you can do to improve your customer retention.

If you are feeling a bit overwhelmed from all this information, I recommend picking just one from the list and spend a week working on it.

This will give you momentum and allow you to start building a retention plan with these tips being the base of your plan.

Justin Butlion
Justin Butlion,
Justin Butlion is the Director of Business Performance at Yotpo.
  • Love some of the points covered, Justin! I agree with you on the use of social proof to drive customer retention. Here’s my take on the topic, with a few more ideas included – http://www.marketsideviews.com/20-smart-ways-to-drive-repeat-business/

    • Thanks for the kind words Priya. I checked out your list which is comprehensive. I especially like list posts which have a lot of references to scientific studies. Do you have any favorite tools for personalized email marketing? My tool of choice is Vero.

  • Thanks for the kind words Priya. I checked out your list which is comprehensive. I especially like list posts which have a lot of references to scientific studies. Do you have any favorite tools for personalized email marketing?

  • Some great ways to retain customers. Another way to retain customers would be by delivering personalised experiences. In a recent study it was found that 89% customers were willing to provide retailers with personal information in leiu of targeted content.

    Businesses have turned to beacon technology to create personalised experiences for their customers. It was found in a recent study that in 2016, 85% retailers will be adopting beacon technology and generate $44 million from beacon messaging. Here are some of the ways in which businesses can create personalised experiences for it’s customers – http://encircle.io/industries

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