Online retail businesses spend significant time and resources acquiring new customers. A well-run online store needs its share of new shoppers, but that doesn’t mean you should neglect the ones already spending money with you. Customer loyalty is necessary for building a brand and improving revenue, and you need a retention strategy to build and nurture these all-important relationships. With that in mind, this guide has all you need to know about increasing customer retention for your retail store.
What is customer retention?
Customer retention refers to a company’s ability to turn customers into repeat buyers and prevent them from switching to a competitor. Often, keeping current customers is just as important as finding new ones. With a smart customer retention plan, you can encourage one-time payment shoppers to return to your store. An online retailer with high retention rates is doing something right and is likely to be executing a marketing and sales strategy that resonates with audiences.
The importance of retaining customers
Not only can previous buyers become regular customers at your online store with higher lifetime values, but they also help with acquiring new shoppers. People who already buy from you are ideal brand ambassadors because a large proportion of their network share the same interests and backgrounds. Word-of-mouth is one of the best ways to attract new customers, and having a strong following can do some of the marketing work for you.
How to increase customer retention
So how do you increase customer retention? Fortunately, there are several actions you can take to foster relationships and give shoppers more reasons to visit your store on multiple occasions. Below are some of the best-performing methods for boosting customer retention for your online store.
Create a customer loyalty program
Loyalty programs offer a clever way to give customers reasons to return and shop again. Incentivise them with a loyalty program that issues points for purchases which can be exchanged for discounted prices or free products. Loyalty programs are based on customer spending, meaning there’s a high chance of driving up average order values.
Show your values
Sometimes demonstrating your core values is enough to get shoppers on board and use your online store regularly. According to GWI, 46% of consumers want to use eco-friendly brands, while 44% like them to be socially responsible. Around 28% like brands that support charities. If your business is environmentally friendly, then show it. If you support charities, let people know. Ultimately, these causes should be for the right reasons, but there’s no harm in informing customers of the good work you’re doing to improve the planet and people’s lives.
Build a community
Advances in technology and the internet have given way to better communication. Consequently, customers expect more than a faceless A to B transaction; they want to feel like they’re part of the brand. One way to convey inclusion involves building a community and giving people a reason to use your store. Stage events that encourage real-life customer interactions, have a presence on social media and champion high spenders at your store by featuring them in your business’s marketing.
Make your customer service five-star
How quickly do you respond to queries from customers? How easy is it for people to get contact details for you? Excellent customer service goes a long way to building brand loyalty and retaining shoppers. Plus, they will usually be happy to promote your excellent services to the world, whether on social media or online reviews. Taking a proactive approach to customer service and going above and beyond will help your online store stand out. Be quick when responding, don’t be afraid to ask for feedback and admit to mistakes if they happen.
Don’t forget about the after-sale
Think about a customer’s shopping lifecycle with your brand, including after they’ve completed a purchase. Continue communication once they’ve bought a product, letting them know you’re invested in them. The real relationship starts with customers after the checkout, so implement push notifications and send post-purchase emails to keep the conversation going and show shoppers that you value their custom.
Offer flexibility at checkout
A key part of keeping customers happy involves giving them what they want, especially when paying for products and services. A growing number of consumers now expect more flexibility at the checkout regarding how they pay. Gone are the days of offering a debit and credit card option and perhaps PayPal. Now, shoppers want alternative spending methods that help them be more responsible with their money. Explore additional avenues, such as buy now, pay later and digital credit. Shoppers will appreciate the flexibility and are more likely to shop again with a store offering their favoured payment methods.
There is no doubt that you should continue securing new customers to shop at your online store. But that doesn't mean you can't simultaneously focus on retaining previous customers and turn them into an essential part of your community that champions the brand and always comes back to shop with your store.