Do you know that retaining an existing customer is five times cheaper than acquiring a new one? This is because you don’t have to spend time building new relationships when you already have one. Like relationships, maintaining a friendship with a best friend is more straightforward than starting from scratch. The same goes for customer retention.
Customer retention is essential for all businesses but is especially important for eCommerce organizations. After all, you don’t have the opportunity to connect with customers in person with an online business. The inability to build a face-to-face relationship can cause customer churn.
What is Retention?
Retention is how often your customers take a particular action. In the context of online selling, this action is placing an order with an eCommerce online store.
How Do You Calculate Your Customer Retention Rate?
Calculating your CRR is so easy:
- Consider how many customers you have at the end of a given period; it may include a week, month, or quarter.
- Subtract the number of new upcoming customers you’ve acquired over that time.
- Divide by the number of customers you had at the beginning of that period.
- Then, multiply that by one hundred.
Why Customer Retention Matters
No one wants to lose a single customer, but how important is a high customer retention rate?
According to Harvard Business Review, boarding a new customer is between 5x and 25x more expensive than keeping an existing one. And by handling a simple five percent increase in retention rates, you can increase profits by 25% to 95%.
This data makes a lot of sense. When you keep customers at a higher rate, you don’t have to spend nearly as many resources on sales or marketing, customer training (depending on the industry), and all other unprecedented costs.
Keeping customers healthy makes all aspects of running your business affordable and efficient – it’s a game-changer.
Things to Include in an Ecommerce Customer Retention Strategy
First, let’s be realistic, you recently complained about the ‘Amazon-effect,’ and customers are less engaged with the brand. If you have, you need to focus from the bottom up to determine where the friction points are with your online customers. Specifically, how your e-commerce website can disappoint customers. Some examples include:
- Difficult user experience
- Content doesn’t communicate with your customers effectively
- Product categories and merchandising aren’t clear
- Logistics, Shipping, and returns aren’t up to scratch
- You are not learning who your customers are and what they want
- Products themselves are not satisfactory, and your competitors’ products are outgunning you
- Payment methods aren’t flexible
Many people are reluctant to shop online because they are not receiving what they have ordered or are being cheated by some unscrupulous seller.
As a result, eCommerce companies struggle with low customer retention rates that can lead them to bankruptcy if they cannot turn things around quickly.
In the following article, we have outline 4 ways you can improve online customer retention for your eCommerce company so that you don’t find yourself in the red.
1. Make Sure Your Website Is Mobile-Friendly
Mobile devices are the most popular way to access the Internet today. So if you’re looking for your next big customer acquisition channel, focusing on mobile phones should be a top priority.
So how do you attract new customers to mobile phones? First, make sure your website is designed for mobile devices. Your visitors will appreciate this, and it will also increase their chances of purchasing on your website.
Also, consider SEO for mobile. Google is becoming increasingly mobile-friendly, and this will boost your ranking position: customers looking for products on their mobile devices will find you more easily.
If you haven’t already, focus on designing a mobile website first to attract new customers and improve customer retention.
2. Use a Proper Methodology
Well, the next thing is to use the right methodology. So the first thing to do is to build your recency, frequency, and monetary model. Run surveys to understand the pain points of each significant segment, like the highest recency, the ones who have the most significant lifetime value, and the highest frequency. And then to do the hygienic steps and treat the pain, you should do the delivery before doing the over delivery.
If you want to improve customer retention, you must know how much you can afford. So here’s another critical point, don’t stop until you’ve got 100s of ideas you like. So you brainstorm, and you squeeze all the opportunities. So don’t run for the first enthusiastic idea.
After that, you can execute and analyze your business’s impact, like how this affected the net promoter score or the retention or the lifetime value, and of course, you restart for from the surveys part.
3. Delight Customers
Going for the extra mile for customers is what keeps your brand in their minds. This is beyond a one-time effort. Grand, routine actions show customers that your company does so as more than pay to earn sales.
For example, you can add free samples to orders, go beyond your customer service, or include a free trial. Doing something that will surprise and captivate customers will motivate them to stay loyal to your business and refer their friends.
4. Provide Customer Service That Exceeds Expectations
Customer service is so vital that it has been said that 90% of your customers will give up if they encounter a significant problem while on the website.
Also, remember that many shoppers use their mobile devices to browse the Internet when they are in stores or walking around town. So if you haven’t already, invest in tools or services to help you quickly contact customer service issues on the go.
You might also consider building a live chat function on your website. Studies show that live chat has proven especially effective at reducing shopping cart abandonment and improving customer satisfaction.
Give your team members good training, equip them with the right resources (like video conferencing software designed to make it easier to solve common customer problems), and ensure they know you mean business about providing superior customer service.
In conclusion, it is possible to improve online customer retention rates. By using solutions like social media integration, A/B testing, and gamification, you can reach a loyal client base that will positively affect your business in the long run. If you want to get more hacks of higher customer retention, you can contact us. Our experts are here to help you. Call now!