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The process of acquiring a consumer and turning them into a customer consists of three main parts: grabbing their attention, selling your product and experience to them, and getting them to return to your store.

Each of these parts have different requirements for success, but retaining the customer might be the most complex.

It's tricky because there are so many other options customers have when shopping online, but the results are worth the effort.

According to Bain & Co, increasing customer retention rates by just 5% can increase profitability anywhere between 25%-95%.

The problem at hand is how you can stand out to the customers in 2016. The online browsing experience for the shopper can be summed up in one word: loud.

The average consumer is exposed to thousands of advertisements a day, so how are you going to make sure your retargeting sticks out?

The good news is that your name will stick out thanks to prior familiarity, but you have to get more unique in this day and age.

The average email only goes so far, and you have to provide some real benefits to your loyalty program if you want to keep customers coming back.

Here are three ways you can retain your customers in 2016:

1. Dynamic product ads

Facebook recently introduced dynamic product ads. Dynamic product ads are basically making sure you're only promoting products relevant to your customer's shopping patterns.

That way you don't have to build unique ads for every product. Instead, it uses one ad and swaps out the specific name and picture of the relevant product.

It does this by using combining a few factors. The first is your entire product catalog, the second is a Facebook pixel on your site, and the third is a template you build for Facebook to display on its site.

It works across multiple channels (desktop and mobile), and gives you the opportunity to connect with your shoppers even more on social media thanks to personalization and specific targeting tactics.

The program has worked well for The Honest Company. It cited a 34% increase in click through rate as one of the big benefits.

And the reason why it works so well is simple: Facebook has over a billion users, and dynamic ads narrow that audience down to those who are relevant, saving you money and improving your ad's targeting. 

2. Points through loyalty

Have you ever been so happy with a customer making a purchase on your site that you decided to give them some kind of reward?

That's what the folks at Fitzula had in mind when it was developing a loyalty program for its shoppers. There are plenty of cool loyalty programs out there, like Amazon's Prime, but Fitzula's has great benefits in a different way. 

The way Fitzula's loyalty program works is that you earn one point for every $1 you spend on the site. After acquiring a certain number of points, you can cash them in on a future store discount (ten points = $1 discount).

This way, shoppers are incentivized to continue shopping on Fitzula to earn discounts and great deals.

All it takes is a minute of your time to sign up for the program that is absolutely free.

The points can also be applied to shipping costs, appeasing customers who are looking to save some money on delivery.

This way you can move beyond simple emails in discounts and allow the consumer to claim their points and in the way that appeals most to them psychologically.

3. Consider messaging apps 

Did you know that 2.5bn people have at least one messaging app?

These apps such as WeChat or WhatsApp have garnered a lot of attention, but haven't been widely used as a medium to advertise - until now.

Chinese retailer TMall began to use WeChat to give shoppers the ability to browse its merchandise directly from the app.

They redirected shoppers to their store within the app on Singles Day, and saw 52% of their traffic actually come from it.

On an average day it is not that high, but it illustrates that the app was a useful platform to connect with shoppers.

In China, WeChat acts as a portal to much more than just messaging. It offers entertainment, payments, information and more, so other retailers would have to get creative. 

Offering your username on each app at the time of signing up for loyalty programs gives you the ability to reach the shopper directly on their phone.

Retailers have used text messaging to stay in touch with shoppers, but messaging apps are less invasive, and can warrant a higher response rate.

Messaging discount codes can lead to higher open rates and more, just make sure your site is optimized for mobile browsing. 

In order to keep customers returning to their stores, retailers have to find new ways to stick out from all the noise shoppers are exposed to daily.

As consumers grow to expect more personalized shopping experiences, it's time for retailers to actually provide it to them.

These strategies are new and daring, but they should be considered by every retailer in 2016.

Retailers have to push the envelope further to build effective retention strategies, and these tactics can be the best ways to build loyalty to your customer base.

For more on this topic, read:

Arie Shpanya

Published 19 February, 2016 by Arie Shpanya

Arie is the founder and executive chairman of Wiser and a contributor to Econsultancy.

50 more posts from this author

Comments (1)

Jenna Ochoa

Jenna Ochoa, Director of Marketing at Blue Stout

Hi Arie,

Thanks for this post! I'm very interested to see how brands will move into using chat apps and if that will be adopted here in the U.S.

Have you seen any brands using geo-fencing personalization techniques to increase retention rates? We wrote about DICK's sporting goods who has taken that strategy on and is doing very well with it. You can read about it here: http://bluestout.com/blog/grow-your-ecommerce-revenue-5x/#personalization

Are there any examples of U.S. companies using chat apps?

6 months ago

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