11 Best Customer Retention Strategies for 2022
The value of a customer is greater when they are retained.
A final statement: “Acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one.” Some claim that acquiring new customers is five times more expensive than keeping existing ones, while others assert that keeping them is seven times more valuable.
The point is that customer retention is less expensive, more profitable, and in many ways simpler than customer acquisition, even if the exact figures are a little hazy.
In this piece, we respond to:
- What does customer retention mean?
- Why customer retention is important?
- What are some proven customer retention strategies?
- Which automation apps improve retention?
Shall we?
What is Customer Retention?
Making one-time buyers into repeat customers is known as customer retention, also known as client retention.
Retain is the root of the word “retention,” which is essentially just a fancy way of saying “keep.”
Thus, maintaining existing customers is the aim of customer retention.
The objectives and strategies for customer retention vary by industry; for example, a company selling high-end software will employ different tactics than an online retailer.
However, the goal is to deliver a level of quality and service that encourages repeat business-customer retention perfected-in all industries.
Why Is Customer Retention Important?
There are many other factors that make customer retention crucial, in addition to the fact that it is more expensive to find new ones than to keep existing customers.
So, not only is it less expensive to keep your customers, but it’s actually more profitable in the long run to keep them as well.
Happy customers are return customers, yes, but they also spread the word about you to their family and friends, and word-of-mouth marketing can increase sales by up to five times more than paid advertising.
Your happy customers’ trust in you will increase sales, cut down on your advertising expenses, and result in financial savings.
You want genuine, organic growth that secures future revenue, not to be that quicksand startup.
Benefits Of Adopting Customer Retention Strategies
The advantages of putting customer retention strategies into practice are as follows:
What Are Customer Retention Programs?
Programs for keeping customers are simply actions and strategies brands use to enhance the customer experience.
In addition to promoting the brand’s product or service, the goal of these programs is to get customers to make repeat purchases.
While there are many different types of customer retention programs, we’ll limit ourselves to strategies created specifically for owners of online stores like yours.
We will in this piece look at some strategies for keeping customers, which will encourage, enable, and inspire them to make additional purchases at your store.
How To Calculate Customer Retention
Your current customer retention rate-which indicates the proportion of customers who are sticking around-must be known and understood before you can begin developing a customer retention plan.
The following equation makes calculating your customer retention rate simple:
((Number of customers at the end of a period — Number of customers acquired during that period) / Number of customers at the beginning of the period) X 100 = Customer retention rate.
Let’s deconstruct it.
The time frame is entirely up to you; it could be monthly, quarterly, yearly, or whatever works best for you and your business.
Keep in mind that you must factor customer churn into your estimate of the total number of customers at the end of the period.
As an illustration, suppose you started out with 10,000 customers and by the end of the period, you had 13,000 customers. During that time, you added 5,500 new customers, but you also lost 2,500 due to churn.
The equation would appear as follows:
((13,000–5,500) / 10,000) X 100 = 75
75% of consumers remain with a company.
For a benchmark, it’s been reported that a 35 percent or higher retention rate in the ecommerce or SaaS industries means you’re doing really well.
How to Improve Customer Retention: 11 Best Practices and Strategies
Here are the top techniques for boosting your customer retention rate, including social media interaction, email marketing, and setting reasonable expectations.
Why competitor spy can improve customer retention? It seems there is no direct relationship between them.
Competitors are part of each company’s learning curve. Knowing who your competitors are, and what they are offering, can help you to make your products, services and marketing stand out.
Spy what strategies your competitors are doing right to retain customers and follow them, you will save your trial-and-error cost on both time and money.
Which kinds of information that can help boost customer retention you need to scrape from competitors? Here are some examples: you may need to know what marketing programs targeting existing customers they adopt; how they design and update their shop website, especially the parts to increase repeat purchase; and what Shopify apps they use to maintain relationships with exsiting customers, etc.
You can collect the abovementioned info one by one from Google, but it becomes much easier by using a competitor analysis tool SimplyTrends, which can make you highly effective in scaling your online business.
2. Set Realistic Expectations
The ability of your company to retain customers can be greatly impacted by setting realistic expectations, which is crucial if you want to increase your customer retention rate.
When it comes to shipping times, for instance, most online stores can’t compete with Amazon; however, you can do your best to keep your customers informed.
One of two things can happen if a customer orders something from you and has to wait a few weeks for it to arrive:
Creating this second scenario is important if the objective is to keep customers.
Simple customer retention strategies can be used to accomplish this in a variety of ways.
You can send emails to customers informing them that their order was received, processed, and that their item has shipped. You can have transparent shipping information on your website.
In the Shopify backend, you can easily alter the updates you send to your customers:
Of course, setting expectations extends far beyond shipping.
Setting clear expectations is a fundamental but crucial step forward and will go a long way when you’re trying to increase your customer retention rates. Make sure your product descriptions are accurate and that there aren’t any unexpected fees that appear at checkout.
3. Create a Loyalty Program
Your customer retention strategy should include a customer loyalty program, which rewards your clients by providing them with reasons to do business with you again.
The core of this customer retention strategy is to treat your customers like royalty once they sign up for your loyalty program by hooking them up with offers, such as exclusive discounts and early access to new products.
The Sephora program called Beauty Insider, which grants access to discounts and gifts without actually having to spend any money, is one of the best examples of a customer retention strategy based on this strategy.
Even before they opt in, you can provide benefits akin to a loyalty program, such as a discount code for each customer in their order confirmation email.
Instead of requiring them to sign up for anything, just give them the discount right away.
Customer loyalty and retention will be greatly enhanced if you continue to provide value to your customers after they have made a purchase without any hidden agendas.
To increase customer retention, Shopify lets you personalize your order confirmation emails and create discount codes.
4. Pay Attention to Questions
You know how sometimes it’s difficult to catch your own typos and you need a second pair of eyes to edit?
The same thing can happen with your store: You created the customer journey, you created the product pages, you determined the prices, in other words, you know everything about your store because you created it.
Because of this, we frequently are unable to identify our mistakes, at least not to the same degree as our clients.
A great customer retention strategy is to pay attention to questions about your store.
For instance, if someone asks you a question that you assumed was obvious, that’s your cue that it might not be so obvious after all.
A second possibility is that you didn’t explain something loudly or clearly enough if they asked a question that you had already answered.
Your customer retention will be higher if you can make your customers feel at ease enough to ask questions.
Additionally, feedback is a gift, as they say.
So pay attention to those inquiries and keep in mind that if one person asks it, perhaps others will as well.
Additionally, listening is a great way to increase customer retention because you will have a much better chance of solving any issues if you are aware of them.
5. Pay Attention to Complaints
Customer satisfaction determines whether a customer will stay with a business.
Why would your customers return for a second visit if they are dissatisfied with the service you offer?
As a result, every complaint you receive serves as a brief customer satisfaction survey. As a result, you should use complaints to increase your customer retention rates.
In essence, if you receive a complaint, don’t ignore it; instead, address it as soon as you can and make sure you meet your customer’s needs.
Put a Contact page on your website, bury your email address in the footer, and make sure you’re accessible on social media as additional steps you could take to make it easier for customers to file complaints.
Improve the experience for the following customer by learning from their complaints.
There are few better ways to stay top of mind than interacting with customers on social media, as you can’t retain customers if they forget about you.
Put social media buttons in your footer, on your checkout page, and on your contact page if social media is going to be a part of your customer retention strategy, which it should be! There’s a reason Shopify makes adding social media components to your store so simple:
When customers praise your store on social media, thank them for the kind words and then spread the word to the rest of your followers. This is a great customer retention strategy.
A great way to create buzz about your social channels is to announce new products, deals, and other updates on social media. Take a look at this email from the online bra retailer Harper Wilde for an example.
(Check out the social media apps on the Shopify App Store for details and links.) There are many apps you can use to automate and optimize your social media engagement, and developing a social media marketing plan is fairly simple.
Even your social media buttons can be added to emails.
With Facebook and Instagram, for example, you can create target audiences based on pages that customers visited — like, say, a “Thank you” page after making a purchase — or on certain events, which can help with customer retention.
For the most part, online store owners’ targeting on Facebook when it comes to customer acquisition is based on speculation at first.
They are educated guesses, at least, based on the locations, age ranges, interests, and gender.
However, the element of guesswork is eliminated when you use social media to target previous customers.
Social targeting is a useful tool for your customer retention strategy because you are aware that the people who were exposed to these advertisements made purchases from your website.
Try this strategy out, and if you can produce some results, we’re confident you’ll realize how important customer retention is.
8. Use Email
Even emails that aren’t specifically aimed at keeping customers can help with customer retention.
Every email, including the order confirmation, the shipment-sent confirmation, and the follow-up thank you, can play a role in setting expectations, which was a topic we covered earlier.
These are fantastic chances for you to communicate with customers, set expectations, and raise your customer retention rate.
You can segment your audience once they sign up for emails from you, for instance based on the particular products they bought, how much they spent, whether they used a discount code, and so forth.
Even though it appears that email usage is declining, at least among some demographics, this may not be a bad thing for your customer retention strategy.
Emails might become less bothersome as people continue to move their personal communication to platforms like iMessage, Facebook Messenger, Snapchat, and WhatsApp because they won’t be competing for space with messages from friends and family.
As a result, your emails will have a better chance of assisting you in achieving your objectives and, if done properly, will enable you to increase client loyalty and retention.
9. Market to Your Customer’s Interests
One thing is always clear when discussing customer retention: Your marketing materials must be in line with the interests of your target audience.
Why?
Sending your current customers emails that have nothing to do with the things that initially attracted them to your business is not going to help you increase your customer retention rate.
Or, if you’re considering experimenting with new content on your social media channels, it’s critical to consider whether the new content you want to post will endanger the current relationship with your followers.
When it comes to customer retention strategies, sticking with what your customers know, not what you know, is generally a good policy to stick with. These are risks that you may need to take on your entrepreneurial journey, but make sure they’re calculated risks.
10. Engage in Social Responsibility
High customer retention rates, as we’ve previously mentioned, depend on your customers being happy with their overall shopping experience as well as the products they’ve purchased from you.
Cost, quality, communication, and other factors fall under this category.
This is where social responsibility can have an impact; however, you can also make customers feel good by letting them know they are doing good.
Numerous online stores excel at integrating social responsibility into their operations and informing customers about it. Social responsibility is defined as actions that assist those in need.
You may be familiar with Patagonia, the outdoor clothing company, which runs a number of initiatives that give their customers the impression that they are making a difference just by supporting the brand. These initiatives include Worn Wear for clothing repair and recycling, Patagonia Action Works for assisting grassroots activists, and environmental grants.
It’s much simpler for your customers to support you if they perceive your brand as one that is contributing to the greater good. Talk about increasing brand loyalty while increasing retention.
Since every item your customers purchase will support a worthy cause, you are in fact providing them with an incentive that goes far beyond dependable shipping.
11. Be Honest
Our last customer retention tactic is a straightforward one that you’ve probably learned your entire life.
Simply put, be sincere.
Although it may seem a little hazy at first, many people have already experienced being burned by businesses.
People are now quick to lose trust in businesses, whether it be because of subpar goods, murky return policies, unknowable fees, or something else.
Therefore, be sure to give your customers an honest shopping experience.
Be clear about which shipping company you’re going to use, provide fair prices for your goods and shipping costs, and don’t forget to include your tracking numbers.
Nothing will make your customers more skeptical than an unjustified high price tag, so don’t try to increase your prices too much at first.
Overall, one of the best ways for businesses of all sizes to increase customer retention rates is to treat your customers as you would like to be treated.
Customer Retention Tools
Okay, so maybe apps can’t help with all ten of our suggestions for keeping customers.
You must manage those customer retention strategies on your own because, for instance, there is no app for social responsibility or for setting clear expectations.
Here are some apps that could improve your customer retention strategy despite the fact that much of the tedious work can be automated.
(Note: This list is just a sampling of the many, many apps available; there are much, much more.)
Customer Relationship Management Software
Bobile: You can promote sales, offer loyalty programs, give special offers, get feedback, and use many other features with Bobile to interact with your customers autonomously and help you build a relationship with them so that you don’t have to spend the time doing it yourself.
Qualtrics: With Qualtrics’ customer churn and retention software, you can track and address every step of the customer journey, even predict churn.
Zoho: Managing email campaigns, making predictions based on trends, and automating recurring tasks are all things that Zoho, intelligent software that learns as you use it, can do.
Apps for loyalty programs
S Loyalty: Launching a branded loyalty program is made easy with S Loyalty, and you can pick the benefits you want to give your customers, such as price reductions or free shipping.
Smile.io: Smile.io offers loyalty points, promotes word-of-mouth advertising with a referral program, and has a rewards structure to make your most valuable customers feel special.
Retentio: Retentio offers a variety of tools to aid in customer retention, including discounts that are automatically applied to customers’ baskets and a coupon on the thank you page.
Instagram Shop: Instagram Shop specializes in shoppable Instagram posts, enabling customers to purchase goods that are displayed in your Instagram feed.
Auto Post: Products that you’ve recently added to your store’s inventory can be included in the posts that Auto Post automatically creates about them.
Kudobuzz: Your customers’ social media reviews on Instagram, Facebook, Twitter, and other platforms can be collected and displayed by Kudobuzz.
Email apps
Spin-a-Sale: By launching a pop-up resembling a game as customers leave your website and offering a discount in exchange for their email address, Spin-a-Sale is a creative way to build your email list. They benefit from the discount, and you benefit from a larger list of subscribers.
**Happy Email: **30 minutes after their first purchase, Happy Email automatically sends thank-you messages to new customers.
Summary: How to Retain Customers in 2022
Many e-commerce business owners concentrate on luring in new clients, but while you do need new clients, nurturing your current base is just as crucial.
The people who already know your brand and will appreciate that you’re focusing on them even after they’ve made a purchase will appreciate it if you spend some time and money on building relationships with past customers, rather than allocating all of your marketing budget toward acquiring new ones.
Here are the top 11 customer retention strategies you can use to keep customers coming back, and you might even get repeat business.
Originally published at https://www.simplyshop.app on September 2, 2022.
