Modern e-commerce should focus on customer retention more than customer acquisition: 5 of the very best customer retention strategies

In the year 2015 if you own an e-commerce business and a majority of your marketing budget revolves around customer acquisition then you need a little more than a wake-up call – you need a shake-up call.

Consider the losses

• On an average a non-returning customer, also known as a lapsed customer, costs your business a whopping $243 USD
• Also, the cost of acquisition per customer is almost 7 times the cost of retention per customer
• The probability of landing a sale with a new customer is 5 – 20%

Consider the gains

• The probability of landing a sale with an existing customer is 60 – 70%
• Gaining the loyalty of just 5% more customers leads to an increased average profit per customer in the 25% – 100% range

All of these stats beckon that a seismic shift in the way modern e-commerce brands treat customer retention is the need of the hour.

Now that we have touched upon the importance of focusing on customer retention let us explore the 5 best customer retention strategies e-commerce brands can leverage upon to build lasting and profitable relationships with customers.

Use an easy and self-effacing account creation strategy

This one actually serves as a dual-benefit strategy. If done well this can serve as both: a customer retention as well as a customer acquisition strategy. Customer accounts can prove extremely useful in improving the overall shopping experience of a returning customer. An account can be used to provide the returning customer with pre-filled information, thereby making their shopping experience fast and efficient.

For a new customer the strategy that could work best is allowing a first time customer to shop using a guest account and giving them the option of creating an account after the shopping process is over and done with. This makes creating an account seem like an added incentive to the customer rather than a bad pre-shopping experience.

Use social media to your advantage

If you are an online business it goes without saying that using social media efficiently is an important strategy to consider and implement. Engage with your customers on social media and let them know that you value their commitment and feedback.

Social media provides an amazing live feedback strategy that empowers not just the customers to voice their concerns and grievances, but also the brands to listen to their audience and improve upon their services thanks to real-time customer feedback. This is why Social Listening is slowly becoming a phenomenon brands cannot ignore.

Create engaging customer loyalty programs

Customer accounts can also be used for the purposes of rewarding customers through loyalty programs. Loyalty programs should be used to reward repeat customers and give them enough incentive to keep coming back to avail future services.

There are a number of ways you can reward a repeat customer. Offering a discount on one of their future purchases or sending a gift voucher across after a customer has completed a certain number of orders are some of the easier ways of rewarding a customer for their loyalty to your brand.

Ensure that you have a top-notch, dynamic e-mail marketing strategy in place

E-mails continue to be one of the most effective online marketing strategies and one cannot deny their effectiveness as a customer retention strategy. Essentially your e-mail marketing strategy should revolve around increasing purchase behavior metrics, most important of which is the customer lifetime value.

It is always a good idea to use different forms of e-mail communication that act as potential call-to-action messages slowly nudging customers towards making a potential buy. Here are a few examples of such types of e-mail communication:

• Anniversary e-mails
• Post-purchase e-mails
• Reminder e-mails
• Product specific newsletters
• Offer-based / discount-based e-mails

Use win-back messages to bring back lapsed customers

E-commerce brands must realize that their business model lacks an essential customer retention tactic – customer interaction. When a customer shops in a physical store instead of an online store their purchase behavior is greatly influenced by the interaction they have with a salesperson. The only way to simulate this interaction in an online buying experience is through polite enquiries and friendly gestures expressed through e-mails and social media. If a customer has not shopped at your e-commerce website for a while send him/her a carefully crafted win-back message. A “We miss you! Do visit us whenever you have the time.” message goes a long way in scoring a connect with a customer’s psyche.

In the ever changing world of e-commerce customer-focused strategies such as customer retention play a key role in making a potential buyer come back for more. Digital marketers and customer service ninjas ought to take cognizance of this opportunity and convince their e-commerce bosses to make ample room for customer retention strategies in their marketing budgets.