5 Useful Tips to Boost Customer Retention
There is a significant difference in cost between retaining your customers and attracting new ones. Generally, attracting new customers is much more expensive than holding on to those you already have. Dedicating your efforts to building a loyal customer base will strongly benefit your conversion rate. A rise of 5% in customer retention for physical stores “produces more than 25% increase in profits”, as explained in Loyalty: A Prescription of Cutting Costs by Reichheld and Detrick, and customer retention is at least as powerful when applied to online stores. Therefore, knowing how to create loyalty campaigns is crucial to helping your business thrive. Here, we will see which strategies are useful on the web.
#1 Build customer loyalty programs
There are similarities between a loyalty program for physical stores and for online stores. Both rest on the same foundation: tempting your customers with (targeted) incentives to boost your sales. Special privileges, discounts, and exclusive offers are great examples of how to reach your objectives.
When you run a campaign for your business, you first need to know and understand your target market. Simply put, make sure you offer incentives which are relevant to your audience; e.g. offering a discount on make-up to a male customer will not be as effective as offering this discount to a female customer who regularly buys make-up in your online shop.
#2 Offer excellent products
This strategy directly follows from the Loyalty Business Model (1994) implemented by Kaj Storbacka, Tore Strandvik, and Christian Grönroos. Simply put, the theory is that every satisfied customer can potentially become a loyal one. Therefore, it stands to reason that if the user experience exceeds your customer’s expectations, you have the opportunity to turn the user into a loyal buyer. Additionally, a loyal customer can ultimately become your brand advocate and recommend your online shop to their friends, resulting in even more customers.
#3 Go the extra mile by providing additional services
Have you ever waited for a delivery, hoping it will arrive on time? The time between completing a payment and receiving an order is a time of anticipation for your customer. Reassure your customer by including a ‘track & trace’ service and reliable support (by phone and email). By offering dependable service you will increase your customer trust, resulting in customer loyalty.
#4 Make your client feel special
If you make a customer feel appreciated, he/she can ultimately become a loyal customer (maybe even a lifelong customer). Small gestures – offering a special discount on their birthday, sending a personal ‘thank you’ card after a purchase, or special/personalized (holiday) discounts – can make all the difference.
#5 interact with your clients
Depending on your target audience, you can communicate with your customers using email, social media (twitter, Facebook), etc. Choose your means of communicating with your customers wisely and consider the desired effect. For example, you may use email marketing for promotional offers or to announce new arrivals in your online shop. If, however, you want to interact with your customers and reach new potential customers, social media is a better option. Interacting with potential customers by using several channels allows you to grow your network and create a loyal customer base.