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Cecilia Beard
Senior Content Writer @ Yotpo
September 19th, 2022

8 Secrets to Drive Customer Retention

Customer retention just got easier — and more effective.

Table Of Contents

Brands across the board are feeling the effects of supply chain delays, rising customer acquisition costs, and looming recession fears. On top of these macro trends, shoppers are readily switching from one brand to the next and paid social and search costs hitting all-time highs. To mitigate risk during this uncertainty, businesses are re-evaluating their marketing strategies to put retention efforts first and establish long-term loyalty among their shoppers.

But, today’s consumers want more for their repeat business. Shoppers have high expectations, but meeting them pays off in dividends. Selling to an existing customer is up to 14x more likely than selling a new one.

To get your brand up to speed, we’ve compiled eight secrets to drive customer retention.

1. Build long-lasting consumer trust with social proof

Compiling customer reviews is more than an acquisition play; it should be the first step in your retention strategy. Collecting and highlighting reviews and visual user-generated content (VUGC) across customer touchpoints engages shoppers immediately, establishes trust, and puts them on track to becoming repeat customers.

Yotpo’s research found that 94% of purchases are for products with 4- or 5-star reviews, which shows how much trust consumers put in the word of their fellow shoppers. How do you get more positive reviews? Offer points to your happy loyalty program members in exchange for their feedback. User-generated content (UGC), like written reviews, photos and videos, boosts brand trust and, ultimately, sales.

2. Encourage loyalty program sign-ups

Loyalty programs empower brands to motivate desirable customer actions, like repeat purchases, social media follows, subscription sign-ups, and so many more. And, a loyalty program offers clear value to high-value shoppers. According to Yotpo’s State of Brand Loyalty 2022, loyalty programs make over 60% of shoppers more loyal to a brand.

“Loyalty programs make consumer experiences better. They create community, offer exclusive perks, and provide a direct line of communication between a brand and its customers,” says Paul Gray, Product Marketing Lead at Shopify. Accenture reports that customers who belong to loyalty programs generate between 12-18% more incremental revenue growth per year than those who do not participate.

Promotion is the first step. Make sure shoppers know about your program and encourage sign-ups with exclusive offers, like double-point campaigns. Promotion can take many forms, including SMS, email, social media, and banner ads. Increased promotion leads to increased engagement and CLTV down the line.

These promotional messages should clearly explain how the program works and what benefits customers can expect from joining, like exclusive access to sales, free shipping, and VIP-only offers.

3. Treat VIP customers like actual VIPs

After shoppers join your loyalty program, they expect VIP treatment, like perks, points for purchase, discounts, gifts, and, most importantly, personalized experiences. You wouldn’t treat repeat customers like one-time shoppers, and this rings even truer among your loyalty members. According to McKinsey, 71% of customers expect personalization, and 76% get frustrated when they don’t find it.

Keep customers coming back by offering curated, VIP experiences at every touchpoint. Whether you’re sending a loyalty update over email or texting with a VIP shopper, recognizing these shoppers and treating them accordingly is crucial. Delivering VIP-level experiences starts with sharing data across your tech stack, like SMS marketing and customer help desk solutions, and creating a unified view of shoppers.

SMS marketing provides the perfect channel to connect with customers and elevate their shopping experience. You can send updates about customers’ loyalty profiles, offer bespoke product recommendations, and communicate about ongoing orders.

Customer support should be equally tailored. Customer support agents must recognize customers and deliver experiences throughout their purchase cycle. “Consumers don’t reach out to a brand to tell them that they’re doing an amazing job; they’re reaching out because they have an issue or would like to raise something. My team really looks at every conversation as an opportunity to create an advocate,” says Jade Cameron, Head of Customer Support at LSKD.

Whether your support team is speaking to a VIP loyalty member or texting product recommendations to a first-time customer, they should:

  • Act on customer data quickly
  • Treat shoppers as a person rather than a segment
  • Maintain on-brand, tailored support throughout customers’ shopping experiences

4. Let shoppers know what good you’re doing

In today’s eCommerce landscape, corporate social responsibility sells. So whether you’re a sustainable brand selling refillable products or a body-positive underwear brand, customers want to know your brand values and how you’re working toward fulfilling them. In our State of Brand Loyalty 2022 report, over 84% of global respondents said they are more inclined to buy from a brand whose values align with their own.

It’s important to communicate these goals — and achievements — to shoppers. For example, let customers know how many pounds of carbon they sequestered by choosing slower shipping times or how much they raised by donating their loyalty points to charitable organizations. These mission-focused values resonate with shoppers long after their initial purchase.

Plae, a specialty footwear brand for kids, allows shoppers to donate their accrued loyalty points to a cause. Shoppers can donate up to 4500 points, equivalent to $45, to Plae’s current recipient, Race4Good. As a result, customers feel empowered to contribute directly to a cause they stand behind. These efforts have resulted in 26% higher CLTV among loyalty members and a 2.7x higher repeat purchase rate.

5. Start a conversation over text

In our current climate, personalized communication is critical, especially as supply chain delays, the holiday shopping season, and order anxieties loom. To handle these issues with care and ensure customers return, embrace SMS as an engagement channel. Texting empowers brands to communicate quickly and transparently with customers. For example, easily ping customers about their order statuses, loyalty points, exclusive offers, or customer service cases.

SMS is essential for building trust and keeping customers coming back, especially with BFCM on the horizon. More than 47% of consumers have said that receiving a text about their loyalty points or rewards would encourage them to make a purchase.

6. Build an authentic community

We’ve entered the era of the brand experience. Consumers buy based on values, emotional connections, and trust — brands have to be so much more than a store to earn shoppers’ repeat purchases. Sprout Social recently surveyed more than one thousand consumers to better understand their desire for greater connections with brands via social media. They found that when brands create, participate in, and even host relevant conversations online, 44% of consumers say they feel more connected to them.

More D2C businesses than ever are creating a genuine community for their customers, whether they’re using Discord, a loyalty program, social media, or an ambassador program.

Princess Polly, a beloved Gen Z fashion brand, creates community through their loyalty program. The brand’s VIP members are rewarded with experiences, including access to its private Facebook Insider group. Made up of highly engaged customers, the group allows Princess Polly to tap into shoppers’ feedback in real-time and create an authentic sense of belonging.

Customers are delighted by the opportunity to interact directly with their favorite brands. “It’s been a dream come true for our customers,” said Kim Zorn, Head of Performance at Princess Polly. “They get really excited over the exclusivity and we’re able to communicate better with them knowing what they want.”

7. Offer experiences that set you apart

Brands of the future won’t win on price alone. Today’s consumers crave unique experiences that make brands a destination, not just a transaction. In fact, according to Shopify’s The Future of Retail Report: Trends for 2022, 32% of consumers say they’re likely to engage with in-store experiential moments. But, this holds true for online channels too, as shoppers continue to adopt omnichannel shopping habits. According to Forbes, Instagram shopping and even live stream shopping events continue to draw in customers.

To keep customers engaged and coming back, brands should offer customers unique experiences that truly set them apart from competitors.

Outdoor Voices invites loyalty members to participate in Recreationalist events across the U.S. These community- and customer-centered happenings range from participating in a race cheer section to attending a yoga class to “plogging,” or jogging and picking up litter. Attendees not only get to engage with brand in a truly unique way but also earn loyalty points for later purchases.

8. Suggest a subscription

Encourage shoppers who buy replenishable purchases — skincare, beauty products, food and beverages — to sign up for subscriptions, especially those who leave good reviews. Because you have a 60% to 70% chance of selling to an existing customer, versus a 5% to 20% chance of selling to a prospective customer, subscriptions encourage recurring revenue and customer retention. Not sure where to start? Offer loyalty points to your happiest customers to incentivize subscription sign-ups.

Jill & Ally, a fashion and lifestyle brand co-founded by Jill Zarin of “The Real Housewives of New York City” and her daughter Ally Shapiro, launched The Crystal Candle Club to establish a recurring customer base for one of their newest products. In tandem with other Yotpo solutions, the brand is seeing a 20% higher average order value (AOV) among Club subscribers than one-time purchases.

Brands can also SMS campaigns to educate high-intent customers about the benefits of signing up for subscriptions.

Ready to take your retention strategy to the next level? Let’s chat.

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