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According to a study from Adobe, in 2012 repeat shoppers made up just 8% of all site visitors in the US yet they accounted for nearly 41% of total online sales.
So bearing in mind the fact that it’s also cheaper to keep a customer than it is to attract a new one, businesses need to be working hard to keep shoppers satisfied and give them a reason to return.
With this in mind, I’ve rounded up 11 ways in which ecommerce retailers can improve customer retention.
The new Econsultancy/Monetate Realities of Online Personalisation Report found that 94% of businesses believe that personalisation ‘is critical to current and future success’.
Furthermore the research found that for two-thirds (66%) of client-side respondents, both improved business performance and customer experience are the main drivers for personalising the website experience.
Qubit CEO Graham Cooke said that online personalisation improves customer retention because it lets retailers build a personalised web experience around their customer’s behaviour.
By understanding your customers previous browsing and shopping behaviour you can improve retention by showing products they might have run out of or through a better understanding of their preferences. We're entering a really exciting period where you website can be your best sales person as they know everything about the people who walk into their shop.
Amazon is a prime example of how to personalise the web experience with product recommendations. It’s unlikely that any two people will see the same Amazon homepage as the content is tailored based on previous purchase behaviour.
For example, this is the page I see if I visit Amazon anonymously using Chrome’s incognito setting:
But if I visit with all the cookies firing as normal Amazon greets me by name and the recommendations change to reflect my previous behaviour:
A comScore survey published last year found that delivery and returns achieved the lowest satisfaction scores among various aspects of the online shopping experience.
The same survey found that more than half (55%) of respondents have abandoned a cart as shipping costs made the total purchase cost more than expected.
Looking at what information is important to shoppers at the checkout, 73% said they wanted to see free shipping options.
So clearly free delivery is hugely important factor for customer retention, which may outweigh the cost of covering the shipping costs.
It’s no coincidence that ASOS, which has always offered free shipping, is one of the world’s most successful ecommerce retailers.
Range of delivery options
Click-and-collect services have become increasingly popular in recent years, which is a symptomatic of the fact that customers expect to be able to stipulate when and where they want to receive their order.
Offering a range of delivery options puts more control in the hands of the customer, rather than forcing them to pick one option which may not be convenient.
It’s tough to beat Amazon’s range of delivery options, which allows customers to choose from one of seven methods.
This will help to ensure that they have an enjoyable shopping experience and encourage them to come back in future.
Hassle-free returns are very important to the customer experience as shoppers are unlikely to come back if they have a hard time returning unwanted goods.
In the same comScore study already mentioned, almost two-thirds (63%) of respondents said they look for the returns policy prior to making a purchase and 62% have returned a product bought online.
It also highlights the importance of convenience, as 62% of respondents expect to be given a returns label and 57% want an automatic refund.
Two-thirds (66%) of respondents cited having to pay for shipping as the biggest problem when returning goods.
Based on this data, the only real decision for retailers should be how they handle the free returns process.
Many ecommerce sites send free return envelope with all orders, while others such as Reiss require customers to call a courier and arrange a convenient time for the package to be collected.
Multichannel retailers should allow customers to return items bought online in any of their stores.
Speedy multichannel refunds
This is a personal gripe, though a pertinent one nonetheless. I recently ordered shoes online that ended up being the wrong size so I returned them to one of the retailer’s stores.
Multichannel returns are certainly an excellent service to offer customers, however as I had ordered the shoes online it took five days for the refund to enter my account because it had to be processed by the mail order team.
This lack of joined up thinking undermined the experience and I won’t use their ecommerce site again in future.
Beat customer expectations
Amazon already has extremely high standards for customer service and frequently comes out on top in consumer satisfaction surveys.
Much of this success is down to the fact that it always fulfils orders on time and generally beats its own estimated delivery date.
Give precise delivery times and don’t miss them
It’s very frustrating for customers to have to wait at home for a package, particularly when delivery windows often extend to several hours.
This problem is compounded when couriers then miss the delivery time and waste the customer’s time.
Allowing people to have items delivered to a work address is one obvious way around this issue, but there are also delivery services that help to negate this problem by texting customers on the shipping date to give a one-hour delivery window.
DPD provides this service for a number of ecommerce retailers, which ensures that the customer does not end up waiting around for hours on end. The courier also sends frequent email updates to keep the customer informed of the delivery and giving them the ability to alter the shipping date or request that the package be left with a neighbour.
Offer a loyalty scheme
Customer loyalty schemes are a fairly obvious way of attracting repeat purchases, however not all loyalty programmes are created equal.
It’s no good operating a scheme if it’s not clearly signposted on the site or if the benefits for customers aren’t obvious.
Pharmacist Boots operates an excellent multichannel loyalty scheme where points are rewarded for each purchase. The amount of points then required to buy products is clearly displayed on the website so customers are reminded of the value of staying loyal to the brand.
Without wishing to keep banging the same drum, Amazon Prime is another excellent loyalty scheme, though it isn’t a points-based system.
Instead customers can pay a flat annual fee to receive free, expedited delivery. Amazon already offers free delivery on orders over a certain value, so customers are really paying a premium for convenience.
But it has proven to be extremely effective. According to Time Magazine customers with a Prime subscription make $1,224 in Amazon purchases each year on average, compared with $505 for non-Prime customers.
Make them feel special
Offering loyal customers some kind of reward or exclusive content is an extremely powerful way of strengthening brand affinity.
This can be as little as responding to a tweet from a customer who has just received an order, or something as elaborate as creating an exclusive club for people who love the brand.
ASOS actually uses both these tactics and recently launched #AccessAllASOS which gives members exclusive access to news and events.
The details are a bit vague, but it’s just enough to pique the interest of loyal customers and encourage them to apply for membership.
ASOS has stopped accepting applications for this year, but customers can still fill in a form to tell the brand why they deserve to be awarded membership in 2014.
It’s a brilliant way of rewarding loyal customers and the exclusivity of it all encouraged a lot of social sharing when the membership packs were sent out earlier this month.
Offer excellent customer service
A study by Zendesk found that consumers rank quality (88%) and customer service (72%) as the two biggest drivers of loyalty.
The same study also shows that when forced to identify the best way that a company can build customer loyalty, the top requirement (34%) was to provide exceptional customer service 24/7.
It should be noted that Zendesk sells customer service software, but even so the findings are quite compelling.
The challenge for brands is to come up with a consistent multichannel approach to customer service, incorporating email, social and a call centre.
In a bid to reduce costs many companies make it extremely difficult for customers to actually speak to someone on the phone and instead force people to get in contact via email or a web form.
This is often not the preferred option and damages the overall customer experience, which is unlikely to breed customer loyalty.
Social media is an increasingly popular customer service channel and it’s common for brands to operate a Twitter feed dedicated to resolving customer queries.
Create a community
Creating a community around a product or brand gives customers a reason to return to the site and will have a huge impact on driving repeat sales.
Obviously this is no easy task and generally requires social to be built into the business model from the outset.
Naked Wines and Threadless are good case studies in this field, as both businesses have managed to build an engaged community of customers who return to the sites to socialise and contribute ideas.
If customers feel that they have a stake in the company and its ongoing success it will definitely keep coming back to make repeat purchases.
Naked Wines offers its members, known as Angels, discounts on all products and also offers them exclusive use of a mobile app.
Those Angels who are most active on the site are then given higher status within the community and are invited to special tasting events.
As a result each different wine on the website has a huge number of reviews and comments, which are known to be a huge driver of sales.
And for more information on this topic, check out our blog post on why loyal customers are key to online growth or book yourself onto our Creating Superior Customer Experiences Training Course...