Every serious retailer knows how crucial it is to get customers repeat buying.
And the evidence backs it up:
- Harvard Business Review found it costs up to 25 times more to acquire a new customer than it does to sell to an existing one.
- Accenture claim that 43% of customers spend more money with brands they're loyal to.
- And a Dun & Bradstreet PDF claims that companies see an average of 65% of their business coming from existing customers.
All meaning that working to retain your customers really does pay off.
So here are three ecommerce retention tactics you can put into place now in order to start maximising customer value.
1. Create a loyalty program
Creating a loyalty program can help:
- Improve brand differentiation.
- Find and communicate with your best customers.
- Collect a wealth of valuable data.
But most importantly: it helps retain customers.
A loyalty program gives your customers a solid reason to keep purchasing from you. In fact, loyalty program members buy 5-20% more frequently than non-members.
There are a number of different structures to a loyalty program, and plenty of ways to be creative with it. These are the three most popular types:
1. Basic points system
The basic points system is one of the most commonly used programs, where customers earn a certain amount of points for money spent. So the more they spend, the more they get back.
But simplicity is critical here, and the structure must be easy to understand - both for the customer and your own team.
Debenhams is an example of a store that do this well, with their 'Beauty Club'. By keeping it clear and simple they offer three points for every £1 spent, and when the customer reaches 500 points, they get a £5 voucher:
This is really simple to implement and understand. And works particularly well for retailers who have customers making frequent, smaller purchases.
2. Tiered points system
This is similar to the basic points system, but has been customised so that there are a number of tiers that customers can reach.
The value of this system is that you can offer better rewards to your most valuable customers. By slightly gamifying the points system, customers must pass milestones which encourage customers to buy more.
Marvel offers customers a chance to prove how much of a fan they are by encouraging them to climb different tiers that come with its own status:
Points are awarded for completing activities like reading articles, engaging on social and listening to podcasts. With rewards offered as people climb as well as the possibility of being known as an official 'true believer'.
3. Up front fee reward program
An up front fee loyalty program is where customers pay an upfront fee to receive set benefits.
This program attracts your very best customers, and its success is based on a brand really knowing their customers. With it working best for businesses that thrive on highly frequent, repeat purchases.
It may not be for every customer, and only a small percentage may interact with it. But this small customer base is an important one.
Often this can be a flat fee for free shipping over a period of time. For example, ASOS offer customers free next day shipping all year round for just $19 in the US and £9.95 in the UK:
Other companies, like GameStop offer customers the option to pay a set fee to level up instantly to 'level three' of their tiered program:
2. Personalise your customer experience
Customers are increasingly insistent on expecting a great deal of personalisation, and brands are still struggling to give this experience to each singular customer.
Using someone's name on an email these days is not enough. In fact, this procedure only encourages 8% of consumers to engage with a brand.
Doing this right is a massive plus for customer retention. With Forbes claiming 44% of customers would repeat purchase after a personalised shopping experience.
There are a multitude of ways to personalise your customers' experience. Here are a couple of the best:
1. Pop up shops
One of the very best ways to personalise your customers' shopping experience is to bring your store to them - turning your faceless online operation into an in-person interaction.
Pop up stores are growing in popularity, helping stores build stronger relationships with their customers while offering a special and memorable experience.
The people visiting your store will often be your most loyal. So it's a great opportunity to focus on retention - and encourage them to move from being loyal customers into brand advocates.
Shopify Plus is an ecommerce solution that makes this easily attainable for their customers. In fact, they recently teamed up with Kylie Cosmetics to launch a store in Los Angeles:
25,000 people turned up - a pop up so successful for Kylie Cosmetics that seven more events have followed.
The cosmetic brand demonstrated how they gave customers a reason to visit by creating two exclusive lip products that would only be available to purchase during the two week pop up.
Another great example is BarkShop with their BarkShop Live pop ups. They fitted customers' dogs with vests monitoring movement so they had a better idea of which toys their dogs preferred:
Barkshop are a great example of a company that used a pop up store as an opportunity to try new things and be creative with their customer base. All while capturing lots of data and using the store as an experiment before opening something more permanent.
2. Thank you notes
On a much smaller scale, writing a personalised thank you note is an effective way to show customers that you appreciate their business. Not many businesses do this today, so it's a great way to stand out from your competition and have them coming back for more.
Pet brand Chewy are an example of a company that do this exceptionally well, going above and beyond for their customers:
xSearch Chewy on social media and you'll see a mass of delighted customers who have received a special message from the company on different occasions. Not only can you see that these customers have been loyal to Chewy for some time, but it's also a great look for their brand.
Part of the reason this isn't done more often is the scalability of having to write one for every single customer - but this doesn't have to be the case. Set goals for yourself to send a set amount of notes each month, or just send them to your most valued customers.
3. Optimise your processes
A key part of ensuring your customers keep coming back is to make sure you can consistently deliver on their basic expectations.
Thank you notes or a great loyalty program mean nothing if:
- Delivery is unreliable or late.
- You oversell products that are actually out of stock.
- Orders are missing items, or contain incorrect ones.
- Returns are a nightmare.
These and a whole host of other similar operational issues can simply destroy your brand reputation. These are a few things that customers will come back for:
Shipping is a critical part of ecommerce success. And if yours isn't fast and reliable then expect to fall behind the competition.
Poor, slow, delayed or inconsistent shipping will ruin any customer's experience, and make them seriously reconsider shopping with you again. In fact, a Metapack study found that 96% of shoppers said a positive delivery experience would encourage them to shop with a retailer again.
Here's a few tips on how to get it right:
- Set customer expectations. Don't promise next day if you simply can't follow through. And make sure to clearly communicate order cut off deadlines for specific delivery timeframes.
- Get your warehouse in order. Make sure you're actually processing orders efficiently each day by using effective picking systems and warehouse management.
- Use a reliable 3PL. If you want to completely avoid managing a warehouse and shipping then ensure you use a quality 3PL. An experienced company that aren't going to damage your brand with poor service.
- Quality shipping software. Shipping hundreds of orders a day from multiple sales channels can be time consuming. So a quality shipping software that allows you to ship in bulk and all from one place can be a lifesaver.
No fuss returns
According to a TrueShip study, over 60% of customers look at a returns policy before making a purchasing decision. So it's clearly an important topic for a lot of people.
A simple and transparent returns policy helps to:
- Create trust amongst your customers.
- Overcome unavoidable barriers, like people not being able to try on clothes.
- Encourage shoppers to make purchases they wouldn't have if returning was difficult.
- Collect valuable data - based on what's being returned and how often.
All meaning customers are much more likely to make that purchase, and then enjoy their experience so much they'll come back over and over.
Investing in a good order management system is critical to stay on top of the operational side of managing returns. Make sure whatever you use gives tight control of what's going in and out, while allowing you to quickly add returned items back into inventory and available for sale again.
All in all, there are a number of strategies you can use for retaining customers.
But it's all built on a foundational mindset of simply wanting to provide the best experience possible for every single person interacting with your business. The kind of experience that makes them want to stick around.
So try out the ideas in this post and let us know how you get on in the comments below.
Guest Post from our partner, Veeqo
Matt Warren is the Founder and CEO of Veeqo - a complete management platform helping retail brands sell and ship products everywhere by automating all their processes. See first hand how Veeqo can help you master operations and rapidly grow your retail business by booking a product demo today.