A common expression used by online sellers is “It is easier to sell to existing customers than it is to gain a new customer”. Obviously it’s different across industries and case studies, but the general consensus is that it costs between 5 and 25 times as much to acquire a new customer than it does to get an existing customer to buy from you again.
This is where retention marketing places it’s focus in ecommerce, engaging with existing customers in a way that they will come back and buy more from you, as opposed to acquisition marketing where the goal is to find new visitors and convert them into customers.
To get a better idea of how we can effectively do this, we can look at the inverse. If we study the top three reasons why customers become ex customers, we can then look at ways of tackling them...
You could wrap all these up into one generalisation to make it plain to see, customer service is key, not only during their initial service experience but also after, as you make them feel appreciated and reward their loyalty down the line.
Here is a selection of excellent little strategies you can implement to potentially see big changes in the lifetime value of your customer base…
Staying in touch with your customers after they’ve finished (for now) with your service is key to keeping them coming back.
In the old days this would have been done with ancient technologies such as brochures, leaflets and postcards. In these modern times, email is more effective, cheaper and easier.
Because of this, it is vital to build your email list. This is generally easy to do with ecommerce as submitting an email address is necessary in nearly all cases to complete the transaction. Just make sure you get the appropriate permissions for the emails you are going to send to stay above board.
To keep your company positioned at the front of people's minds, consider sending out information like the following…
Giving them a peak behind the curtain adds transparency to your workings and makes them feel like they know your company on a more personal level.
People love discounts and offering them out is a sure fire way to get people to come back and buy more. Especially if it is a special offer for past customers only, make them feel special with appreciation.
Maintain authority in your niche or industry by publishing and sharing relevant content with your existing customers. Remind them that you have your finger on the pulse and are not only a good source of products and services in the field, but that your website is also a reliable source of information.
As with all things in marketing, your best bet is to always make data driven decisions. By keeping track of the right metrics you can see where you are excelling, where you are falling behind and where you should focus your efforts. Some metrics to monitor are…
Your analytics should show you how many of your visitors have visited only one time and how many are repeat visitors. If you start to see your ‘Returning Visitor Rate’ decrease then it might be time to focus on that aspect of your marketing and likewise, if you see it going up then you know you are doing something right.
Sometimes referred to as CLV or LTV, this metric is essential to working out your target cost-per-acquisition because if you know how much one customer is worth in the long run then you know how much you are willing to spend to get another one. Even better, if you can increase this value then you can increase your profit per customer and/or how much you are willing to spend to acquire one. Customer lifetime value is definitely a Key Performance Indicator in ecommerce.
Pretty self explanatory, this is just what percentage of your customers have bought from you more than once. Increasing this number is basically the whole point of this article so you know this metric is vital.
One of the best ways to increase activity and checkout action on your ecommerce website is to make it as easy as possible for your prospective and returning customers to access and use your site.
It goes without saying in 2020 that you need a responsive website that works well on all screen sizes, but don’t forget the less obvious things like making sure your images are correctly sized and compressed enough. One of the biggest reasons people leave your site is frustration from the lack of loading speed.
Streamlining every aspect of the experience will help ensure that visitors don’t bounce just because their 4G signal isn’t working too well, or even worse, it is working well but your site is so clunky it takes ages to load anyway!
Ecommerce differs greatly from traditional shopping in the sense that you don’t get a hands on experience with the product before you get to buy. This can mean they don’t get to inspect the rigidity and build quality of your product or in the case of clothes, get to try it’s fit out properly first.
For this reason alone, it’s only fair that return policies are more relaxed than in store purchases. On top of that, you also have the fact that online returns generally have more obstacles than simply popping back into the store when you’re next in the area.
Returning a product should be as simple and as easy for your customers as possible and the conditions should be displayed prominently for buyers to see and appreciate.
Sometimes the best way to convert a prospect into a paying customer is to get them on to your mailing list prior to purchase so you can tease them into a transaction.
The best way to do this is with a ‘lead magnet’, an incentivising reason for them to sign up to your mailing list. Consider utilizing members only perks and discounts. Think of something that makes it worthwhile for them to submit their email address so that you can plant a lovely new seed that could blossom into a beautiful retail relationship.
Through the last decade we have seen an increase in customers' ethical expectations of the companies in which they do business with. As the population becomes more woke by the week, they expect that the businesses they hand over hard earned cash to will be ethical with it.
Obviously you should try to keep the company's moral compass from ever pointing the wrong way, but you should also let your mailing list know about any angelic actions you take. Support causes and causes that are relevant to your customer base so that they can relate and also feel like they are supporting the cause by making you their merchant of choice.
Try and be as environmentally friendly as possible, from product material choices to your behind the scenes running of the business. Installed a solar system at your office for example? Shoot out an email to your list to let them know that any purchases they make with you will be funding less pollution!
Now that I have given you a few suggestions as to how you can improve your customer experience and lifetime value of a visitor, it’s time for you to take action. So if you haven’t already, sort out a good email marketing system, come up with a few lead magnets and loyalty deals, show them that you care about them and what they care about, and most importantly, keep your eye on the average lifetime value of a visitor and experiment to find the most effective ways to get that number up!
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