customer retention

Customer Retention Best Practice Guide

1. Introduction Customer retention refers to the ability of an organisation to retain the same customer over a period of time. Companies that enjoy high levels of retention benefit from more reliable revenue streams and a high degree of brand equity. Although there is a strong business rationale for focusing on customer retention, many marketers […]

The virtues of re-engaging dormant customers

Companies spend a huge amount of time and money on customer acquisition.

And why shouldn’t they? After all, growing a business significantly is usually best accomplished by growing the number of people who pay for its products and services.

10 loyalty-building strategies for customer retention

Ongoing profit from a customer’s lifetime value is generally much higher than any one single transaction. 

However in order to achieve higher customer lifetime values (CLV) you need to have some strong customer retention strategies.

If you do this, you’ll also find that it’s much cheaper to retain a loyal customer than it is to constantly acquire new ones. 82% of companies asked in our Cross Channel Marketing report agree that customer retention is cheaper than acquisition.

Customer retention is a must for any business where its goals are for long-term success. Here are some of the ways that you can achieve this.

What is customer retention and why do you need it?

They came, they bought, they went away and never came back. 

You’ve driven a customer to your site with an effective paid search campaign, you’ve kept their attention with some beautifully persuasive design and a first class user experience. 

Then by making the checkout as hassle free as possible and by offering them free shipping and a terrific returns policy you’ve given them an exemplary ecommerce experience… Fantastic work! Now you can go home early and watch Adventure Time. 

But wait! How do you encourage your customers to come back? How do you use the goodwill fostered during that first experience into something even more meaningful?

Alright you don’t have to go off and buy a boat together, but it would be great if they popped their head round the door every so often in the future. After all retention costs far less than acquisition and achieving higher customer lifetime value makes your business a much stronger prospect for the future. 

11 ways to improve online customer retention

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.

Almost a quarter of businesses don’t carry out any relationship marketing: report

Loyal customers are extremely important for businesses as constantly attracting new shoppers and converting them into customers is a costly process.

In fact data from the new Econsultancy/Responsys Cross-Channel Marketing Report 2013 shows the value of building customer relationships, as 70% of respondents agreed that “it is cheaper to retain than acquire a customer.”

Similarly, nearly half (49%) agreed that “pound for pound, we achieve better ROI by investing in relationship over acquisition marketing”.

However businesses aren’t necessarily making a huge effort to retain their customers, as just 30% of companies say they are “very committed” to relationship marketing, with 22% conducting no relationship marketing at all.

How to foster loyalty with great customer service

Despite initial concerns, research shows that the exponential growth in online shopping has not killed off brand loyalty. In fact, good customer service is still one of the main driving factors for consumer spend.

With the cost of acquisition of new customers relatively high through search engines, affiliates or other channels, it pays to keep hold of the customers that you already have on your side, to encourage repeat visits, building for the lifetime value of that customer rather than taking a quick win.

You cannot buy loyalty in the true sense of the word, it has to be earned, but the good news is that there are a number of ways that you can foster it:

The end of channels: how digital experiences trump shiny objects

Digital tools now reach across companies (from sales to support) and across the entire customer experience. This span is making running digital channels as silos increasingly costly and difficult to scale.

Organizations that seek to rationalize operations, use data effectively, and personalize smart experiences for clients need alignment around a digital experience plan.

This is the first of a series of posts on why digital experience planning has become a strategic priority of a growing tribe of digital leaders.

Word-of-mouth: focus on the steak, not the sizzle

Is social media, and the data it produces, overvalued? As companies continue to struggle the ROI from their social initiatives, some are starting to suggest that social’s impact might have been overestimated.

But social media proponents say not so fast: social media is the digital channel for word-of-mouth, and although word-of-mouth has historically been hard to quantify, its importance is rarely questioned. Which raises an interesting question: instead of talking about social media, should we be talking about word-of-mouth?