In our ebook “The Ultimate Guide to Customer Retention”, I go over in great detail how you can go about setting up your very own customer retention strategy. The book goes over all the steps in great detail, and provides a ton of insight, but it also can be a lot to digest. Which has lead a few of you to reach out to me.
You have asked me to put together something that really simplifies customer retention. The guide is great but some people are looking for the “Coles Notes” or “Retention for Dummies.” That prompted me to put this simple 5 step process to retention together.
5 Steps to Retain a Customer
Before I get into the specifics of the 5 steps I should explain what the overall goal is when retaining a customer. To retain a customer you need to provide an experience that blows the customer away, keeps you top of mind, and gets you into discussions with their friends.
The 5 steps here are the most basic things you can do to retain a customer. You should look to be doing these steps at the minimum if you wish to take advantage of the profitability of repeat customers. Without further ado let’s get into the 5 steps to retain a customer.
There used to be a time when shipping an order promptly and for a competitive price was enough to keep your ecommerce store at the top of its game. Those days are unfortunately gone. You need a way to get customer excited about your store when they place their very first order.
How you wow your customers on day one is up to you, but I have seen a few things work really well:
- A handwritten thank you note
- Ship samples of other products with their order
- Easy returns and exchanges
- A website that has a look and feel that truly reflects your brand
A handwritten note is proven effective as Richard Lazzazera proves in this Shopify blog post. We love to see a store put in the extra effort to win our business and something handwritten goes a long way.
Including samples works in a similar way to hand written thank yous. As consumer we love to see that a store is trying its best to keep us happy, we also love getting things for free (even if they are small samples).
A company known as Hanz De Fuko really wowed me when they not only sent me samples of other products that I could try but also cards that detailed how to use the samples they had sent.
Easy returns and exchanges have been wowing customers on Zappos for years and a good looking website is now considered a must since 46% of visitors will assess your credibility based on looks alone according to Stanford.
Whatever you do to wow your customers be sure that you are doing it better than your competitors!
Sometimes we just need a nudge in the right direction. Online shoppers are no different. Maybe a shopper really needs what you are selling but just haven’t been reminded of the need recently. This is why email marketing is so important in ecommerce.
Across the globe marketers are rating email marketing as the most effective marketing channel while also being the easiest to implement. While it is easy to implement it is not easy to master.
You must consider a few things like:
- Email frequency
- Voice and Tone
- Subject Lines
I won’t pretend to be an expert on email marketing. If you want to get the best and most recent facts on email marketing I would check out the MailChimp blog.
But I do know about retention! If you want to use your email marketing to retain a customer you need to get them to 1) subscribe to email communication and 2) accept an offer. One of the best ways to get accomplish both these goals is by pairing your email marketing with loyalty marketing.
At the very least follow up a customer order with an email marketing campaign that keeps your customer up to date with any promotions and events your store might be running.
Think of a few reasons you love your local coffee shop. You likely show them loyalty because they know your order, or know your name, and even a little bit about who you are as a person. This personalized experience is how a local coffee shop retains a customer. But this becomes a little more difficult online.
Personalization online may seem impossible because your customer is behind a screen 1,000 miles away. But personalization is possible online and can be done to varying degrees. You can invest in an all out personalization system like what Amazon uses to recommend products.
Clearly I have been doing a lot of reading lately!
But you can even keep personalization as simple as using a customer’s first name whenever you communicate with them. There is one thing that everyone responds to and that is there own name.
Be sure to utilize some level of personalization if you are looking to retain customers more frequently.
No one wants to do business with someone they don’t know. That is why more than a few people are still afraid to shop online. If you want to retain more customers you should focus on making your site feel human and being open with your customers.
Being open to me means allowing them to communicate with you in a free and easy way. This allows shoppers to voice concerns and even give you some positive feedback from time to time.
Tools like Olark or Zopim make this type of communication easy and I would definitely recommend a live chat tool to boost your store’s customer retention efforts.
If you are truly serious about retaining customers you need to get serious about the retention tools you use. Would you expect customers to find your store without investing in any acquisition channels like social or Adwords? I don’t think so.
To retain customers effectively you need to invest in the retention tools to reach your goals. The problem is the average ecommerce store is not investing in these tools.
Customer retention is an effective marketing strategy, repeat customers represent 41% of the average store’s revenue yet stores only devote 19% of their budgets to it. If you really want to retain customers you need to invest in the proper retention tools.
Obviously my favorite retention tool is a customer loyalty program (since I work here at Smile.io). A loyalty program is a fantastic way to accomplish a ton of retention goals with a single retention tool. I have even put together a simple loyalty program assessment that will show you if a loyalty program make sense for your store’s individual needs.