The Secret for eCommerce Success Revealed: Customer Retention
In the world of digital marketing for eCommerce, we work tirelessly to strategize and align our marketing efforts amongst different channels, in order to funnel the user along the purchasing journey, all the way to a final purchase.
Successful eCommerce sales funnels are usually long and typically look like one of the following examples:
We spend so much time, effort and money engaging new users at different stages along the sales funnel.
We set up targeted ad campaigns on Facebook, Google Search and the GDN, optimize for the perfect website pop-up offer to attract email newsletter sign ups, remarket to these users with additional promotional offers on multiple channels and try to engage them on Social Media as well.
Yet, all too often, once the purchase has been registered, we simply forget about this individual and move all of our efforts to acquiring the next potential customer.
Successful eCommerce Business Are “Great” at Maximizing Customer Lifetime Value
One thing that businesses who succeed at eCommerce share in common is that they all put a significant amount of resources and value towards customer retention.
In these organizations, the efforts to increase the Lifetime Value of their customers, becomes parallel, if not greater, than their focus on driving new customers into the sales funnel.
Why is this? The reason is simple – studies have shown that Returning Customers are 60-70% more likely to make a purchase than a New Customer.
According to the Harvard Business School, “increasing customer retention rates by 5 percent increases profits by 25 percent to 95 percent.”
Three Simple Ways to Increase Customer Retention
1. Coupon for a Future Purchase – send your customer a “money off” coupon, valid on future purchases made within the next 60 days. This can be sent either on the e-receipt or via a follow up email. A significant amount of your customers will now find additional items that they are interested in purchasing now that they have received your “gift.”
2. Referral Program – encourage your customers to share a coupon with their friends. If the friend makes a purchase, each party receives a mutual discount. This is a simple way to turn your satisfied customers into free marketers and ambassadors of your brand.
3. Remarket to Previous Customers – For a fashion brand, the rolling out of a New Collection is the perfect time to remarket to your previous customers, perhaps, even offering them access to an Exclusive Pre-sale. For a grocery business, constant remarketing might be wise. Know your product and make sure that you stay in touch with your customers at the right time intervals.
Of course, there will always be churn and customer retention will never be 100%.
It is, therefore, imperative that an eCommerce business continues to acquire new customers and these marketing efforts should never cease.
At the same time, however, it is critical that every organization conduct a deep and thorough analysis to ensure that they have a proper system in place to maximize customer retention efforts and increase the lifetime value of their valued customers.