We’d hate to be repetitive, but we’ll keep saying it until we don't have to: it costs way less to make your current customers buy more than it is to get new customers to make a purchase. Especially in eCommerce, customer retention is no joke. If it wasn’t a crucial part of your strategy in 2022, 2023 is the perfect time to begin. Here are 7 of our tried and true strategies for customer retention that you could incorporate into your plan today.
What is Customer Retention?
Before we go into best customer retention practices, let’s talk more about what it is. Customer Retention is a metric that businesses use to measure customer loyalty and track overall success. It’s about ensuring customers repeatedly come back for more and preventing losing customers (also referred to as churned customers) to bring out the most value possible from them. This is achieved by providing exceptional customer experiences to ensure they don't defect to a competitor, remain loyal to the brand, and boost their satisfaction rates.
How do I calculate my Customer Retention Rate (CRR)?
How do I calculate my Customer Retention Rate (CRR)?
To know your business’s customer retention rate - CRR for short - divide the total number of customers from new customers by the number of customers acquired at the beginning of the period.
(Total # of Customers at the end of the Period - New Customers Acquired)/(Customers at the Start of the Period = Customer Retention Rate)
Our Favorite Customer Retention Strategies For 2023
1. Prioritize Collecting Customer Feedback
First things first, make sure your customers create an account. With an account, it’s easier for customers to access previous orders and pre-filled shipping information. The best way to get customers to do this is by giving them a “create an account” option after they’ve made their first order.
To continue collecting data, there are tons of ethical, effective, and legal ways to do so. At the top of our mind, you can use surveys, transaction history, heat maps, behavior analytics tools, social media, and more. Look for both qualitative data to receive personal (and ultra-valuable!) data from your customers such as complaints and feedback, and quantitative data for numeric metrics, such as site traffic, transaction data, and sales records.
For an exceptional customer retention strategy, you need exceptional customer-centric approaches. With the proper data collection techniques, we bet no one will know you customers better than you do!
2. Build a Killer Customer Support System
A sound customer support system will allow customers to trust and rely on your brands more freely - a key factor for customer retention. Make sure you're able to provide help in the right places, whether a live chat or help desk tool or via social media. Make sure you’re actively listening to your customers and solving all their problems and that they’re using your product in a way that helps them achieve success. People love to feel heard and understood, and your customer support/service system should be doing just that. Make sure the interactions feel (and are) as personalized and human as possible through a well-trained and experienced customer success team.
3. Start a Customer Loyalty Program
Brand loyalty programs are a cool way to motivate customers to purchase more to earn valuable rewards they could use later. It’s psychology in the simplest way possible.
Of course, it’s essential to ensure you're not losing customers, but it's also just as important to focus on your loyal customers. Customer loyalty and retention programs reward customers for their loyalty and keep them happy and motivated to keep them returning.
One form of customer loyalty programs is to implement point-based programs that give customers points after making a purchase. When they reach a certain amount of points, they can redeem points to receive free products or discounts exclusive to your business. If you're wondering if they really work, we answered it for you.
4. Start a Referral Program
When customers refer their friends or family, they get rewarded with a discount code - motivating them to send out more and more referrals, making you win more and more customers.
For many businesses, referral marketing is a sales-driving tactic. It not only helps drive brand awareness and sales, but could also boost brand loyalty.
According to the Boston Consulting Group (BCG), consumers trust word-of-mouth more than paid advertising. In fact, they find referral marketing to be “2-to-10 times more reliable.”
For businesses that offer referral marketing programs and run referral campaigns, leads from referrals came with a 30% higher conversion rate than those generated from other channels such as paid ads.
If that sounds interesting, check out our blog on Referral Marketing Best Practices.
5. Make it personal
Brands with personalized shopping experiences make 40% more revenue than brand that don’t. This means personalized product recommendations based on purchase or search history, customized experiences using collected data, and tailored product education. No two customers have the exact same characteristics and tailored fits are always better than one-size-fits-all solutions.
According to Evergage, 99% of marketers say personalization helps advance customer relationships. You want to make sure your offering solves the customer's problems, naturally making them feel more understood and building a better relationship between your business and the customer.
A great way to personalize experience is by segmenting customers first. Through segmentation, you're categorizing customers based on psychographic, demographic, geographic, and behavioral analytics.
6. Provide Delightful Experiences
This means going above and beyond. Cool ways to delight customers include great customer service and follow-up, aesthetic packaging, sharing personal stories, and offering promotions and discounts.
Customer expectations are higher than ever, and if you want to keep your customers, you need to fulfill or go beyond these expectations. Make sure you’re able to commit to what you promise your customers and make sure not to overpromise if you’re unsure. Customers feel delighted when their experiences are beyond expectations - just think of when you received a package earlier than expected or when you not only offered a refund but a perosnalized promocode as well as an apology.
7. If you're not using email, this is your sign to start
An engaging email strategy is a great way to connect with customers before and after an initial purchase and make sure your brand remains memorable to them even if they don’t open your online store anymore. A great way to get started on email marketing is with follow-up emails after their first email that thank them for their purchase and collects feedback for later.
You can also start a business newsletter as a simple and inexpensive way of retaining customers, with email automation to send brand updates and offers to all of your customers at once to make sure you're always in touch.
These are our favorite tips for 2023 to help you and your business master customer retention in strategy 2023. We know it can get stressful, but we believe in you. Now that you're ready to kickstart your 2023 customer retention strategy, make sure to keep an eye on our blog for more insights and tips for 2023!
