Businesses and customers go hand in hand as the former offer products and services that the latter needs or desires. Customers are crucial to any business’s success. Hence, customer Retention is considered key to a viable business.

That being said, some companies consider customer Retention Strategies as a worthy investment. According to industry estimates, retaining customers is five to 25 times cheaper than acquiring new clients. Moreover, independent research has claimed that a 5% rise in customer retention rates can rack up 25% to 95% of additional profits.  (1)   

Regardless of whether you believe in these figures, it’s undeniable that customers are the lifeblood of every business. In this blog, you’ll find out what customer retention is and some strategies for Ecommerce Sites. 

What customer retention means 

Customer retention is a company’s ability to keep its customers long-term, despite various challenges. A business with high customer retention experience equates to a high number of repeat buyers for its products and services. (2)

The company must employ a set of traditional and eCommerce marketing activities to entice buyers to avail of the same or more offerings. Businesses must also work hard to provide customers with the best customer service and ease of transaction. Thus, when clients experience excellent service, they expect more from your products and services. (2)    

Five customer retention strategies for online sites

To measure the efficacy of your customer retention campaign, there are three key metrics that you need to focus on. These include repeat customer rate, purchase frequency, and average order value. (2)  

Once you’ve set up these metrics, you’re ready to implement your customer retention campaign using the following methods. 

1. Strive to improve customer experience

Apart from providing the best products at reasonable prices, work towards providing the best customer experience. Study your acquisition processes, from product searches to purchasing and payment methods. Since the pandemic, most transactions have shifted online, so make sure all your processes are intuitive. In addition, there was an increase of 30% of consumers who opt for tap-to-pay transactions as it is a more convenient and safer way of shopping. (3)

2. Build customer trust 

Customer retention takes time and involves building trust. And as reliability is crucial in trust-building, make sure to deliver consistent products and services that provide add-on value. This approach also includes providing your customers with relevant information through blogs, webinars, and white papers. 

Don’t oversell and deliver what you promise. For instance, if you claim your product to be organic, make sure it follows the guidelines set by regulatory agencies. If you can afford it, conduct customer surveys or launch a study to determine client satisfaction and product efficacy to support your claims. You can then use the results in your digital marketing strategies.

3. Make customer service efficien

Improving customer service, such as response time, can help enhance customer satisfaction and likely influence a client’s purchasing decision. Thus, prompt responses using chatbots or keeping an agent ready to answer concerns positively impact your brand. In addition, making shipping processes efficient prevent customers from waiting. Making shipment tracking available to clients holds the same effect. (4)   

Moreover, train your staff to handle customer complaints professionally. Incidents like shipping the wrong item, broken products, and dissatisfactory service happen even to the most established companies. Being able to take them well is one of the keys to enhancing customer loyalty. It can even help businesses earn clients’ trust and turn a negative review into a positive one. 

4. Launch a customer rewards program

One of the most effective ways to retain customers is to provide them with incentives, discounts, and promotions for their loyalty. You can choose from any of these suggestions: 

• Special offers that come in the form of percentage discounts
• Discount codes that are sent via email for future and limited time purchases
• A loyalty card that earns them points for every purchase 
• Referral discounts for loyal customers who ask a friend to purchase your product (5)

These strategies aim to keep your current customers buying from your business while convincing their network to do the same. According to a study, loyalty club members are likely to spend up to 18% more than non-members. Referral discounts, for instance, can also help you generate sales. (5) (6) 

5. Optimize client data

Your customer relationship management (CRM) software provides your business with crucial information about individual clients. With CRM, you can track client behavior, preferences, and transaction history. These data types can offer eCommerce sites a wealth of information about their clients. 

The software can help you customize sales pitches such as upselling, cross-selling, and personalizing communication to make a compelling sales campaign. Some e-Commerce sites may provide data sets that may be less individualized but can still be used for the same purpose.

The bottom line 

Customer retention strategies for eCommerce sites aren’t too different from those operating physical stores. The key is to provide customer-centric solutions by offering impeccable customer service and support, launching a rewards system, and gathering valuable data.

These methods can help businesses build better client connections that encourage client loyalty, making your business viable.  

References

• The Value of Keeping the Right Customers”, Source:https://hbr.org/2014/10/the-value-of-keeping-the-right-customers
• Customer Retention 101: Grow Your Business by Selling More to Current Customers”, Source: https://www.shopify.com/blog/customer-retention-strategies
• Digital payments soared during the pandemic and are here to stay”, Source: https://www.cnbc.com/2021/08/17/digital-payments-soared-during-the-pandemic-and-are-here-to-stay.html
• 12 Actionable Strategies to Improve Customer Satisfaction in 2022”, Source: https://www.revechat.com/blog/improve-customer-satisfaction/#:~:text=Response%20time%20is%20an%20important%20component%20to%20increase,does%20live%20chat%20help%20businesses%20increase%20customer%20satisfaction%3F
• 7 Ways to Improve E-Commerce Customer Retention”, Source: https://www.uschamber.com/co/grow/sales/improving-ecommerce-customer-retention
• How to Evaluate Loyalty Program’s Value Proposition”, Source:https://helplama.com/evaluate-loyalty-programs-value-proposition/#:~:text=In%20fact%2C%20research%20shows%20that%20loyalty%20program%20members,%E2%80%98wallet%E2%80%99%20with%20the%20help%20of%20a%20loyalty%20program.