Creating a customer retention strategy may be an afterthought, and something that you think comes after building an impressive storefront or large customer base. The reality couldn't be further from the truth.
Returning customers are the foundations of most - maybe all - successful eCommerce businesses. High customer retention rates are a symptom of so many successful businesses - I bet you know someone who has a wardrobe full of the same of brand of clothing. I bet you know MULTIPLE people who do. It's probably Nike or Adidas or Gymshark isn't it? Whoever it is, it's a visual representation of customer loyalty, and if the big brands are doing it, then why aren't you?
Many people look at what they SHOULD be doing to retain their customers, but this is often stuff a healthy business should be doing anyway. Instead, we've compiled a list of the biggest eCommerce cardinal sins, and the things you should be looking to avoid if you're looking to cut your churn rate and drive your customer loyalty.
1. Dedicate all of your attention to new customers
It's all too easy to think that once you've got a customer on board, the job is done and you can move your marketing efforts elsewhere. It's all about the thrill of the chase, right? Wrong. Think about the relationship you have with your customers and imagine them as an apple tree (I promise this is going somewhere!)
It takes a long time and a lot of effort to nurture and grow a tree to the stage where it's ready to produce fruit for you - so from that point on, it makes sense to continue to nurture that apple tree. Sure, plant a few more, but you've already put in the hard work with this one. The first tree will regularly produce fruit for you, at a far quicker rate than the new ones you're growing.
If all of your marketing efforts are going into attracting new customers rather than nurturing the ones you already have, you're trading in a ripe (I promise I'll stop with the fruit analogies after this) customer for many people who may not even make it to the buyer stage. Once a customer has bought something with you, they're much likelier to stick around - so put your effort into making them feel as valued as possible, and encourage them to stick around.
If the fruit analogy isn't working for you, maybe the cold hard facts will convince you. There are a number of staggering statistics over the cost of acquisition of new customers, compared to the cost of keeping new ones happy.
Returning customers spend an average of 31% more than new leads, and a loyal customer is 50% more likely to purchase new products released by your store. You're also at least 40% more likely to make a sale to an existing customer than a prospect who has yet to convert. (all statistics from crazyegg.com)
There are plenty more statistics like this out there, but you get the picture; existing customers are your bread and butter, so make sure you're keeping them on the hook.
2. Lack of personalization options
Personalization is becoming increasingly important in eCommerce - merchants and stores operating in a competitive space are constantly looking for ways to stand out from the crowd, and there are multiple ways that personalization can help you forge a more meaningful relationship with your customers, as well as giving THEM more options at checkout.
The first reason personalization is essential is related to our first point. Once you have a customer on board, you don't want to lose them, so use everything in your arsenal to keep them happy. There is a lot of important data you'll have if a customer has made even one transaction, and all of this should go into personalizing your marketing efforts towards them.
Amazon pioneered this, and they're so successful that any eCommerce business worth their salt should be taking a leaf out of their book. Personalized marketing is a cornerstone of the Amazon customer retention strategy.
I recently purchased an Anker speaker for a friend's birthday. Scrolling down towards the checkout and I'm presented with a bundle that makes sense - the speaker, along with a case and a charging cable, and an option to add them all to my basket at once. Simple and sensible.
If your customer buys a t-shirt, send tailored recommendations with a list of products people who bought that t-shirt also bought. Create loyalty programs rewarding them for their purchases, making it feel as though they're building towards a reward. Send deals specifically to current customers and make a big deal that new customers aren't getting the same deals. Making your customer feel valued creates loyalty, and personalized marketing efforts are a great way to start driving that loyalty.
Personalization is also something that customers look for when they're actually making a purchase, but not in quite the same way. Giving a customer options to gift wrap or add a personalized gift message to their product are a surprisingly important clincher for potential buyers. Since Covid and the boom of eCommerce, many people will order gifts directly to the recipient, rather than ordering to themselves and taking care of the gift wrapping themselves.
Personalization makes people feel as though they are being seen for who they are, rather than just a sale or one of many. Whether that's you personalizing your recommendations or giving your customers better options for customizing gifts that they're buying, neglecting personalization is a cardinal sin in the eCommerce world of 2022.
3. Neglect your delivery experience
Similar to our first point, many eCommerce stores may view a sale as a win. As soon as someone passes through your checkout and has paid, it feels like a success. For the customer, however, the process is far from over. They still have the anticipation of waiting for the product to arrive, the delivery experience itself, the unboxing experience and potentially returns too.
Too many online stores are guilty of pumping too much money and marketing resources into their storefront, only for the a negative experience post-checkout to frustrate the customer. Slow delivery, poor variety of options and little-to-no updates throughout the process are all factors that will chip away at a customer's initial positive perception of your brand. If anything, a snazzy storefront followed by a subpar delivery process is only likely to frustrate your customer even more due to the chasm between their initial expectations and the post-purchase process.
Investing in your delivery process is absolutely imperative to retain newly converted customers, and there are plenty of positive steps you can take to ensure your post-checkout process is consistent with the quality of the earlier steps of your buyer journey:
- Streamline your fulfilment and shipping process to get orders to your customers quickly - sometimes a potential customer will drop you in favour of a competitor because they'll offer a single day quicker delivery time. Choose your carriers wisely and look out for apps that can streamline your shipping process to get things moving as quickly and efficiently as possible.
- Make sure your customers have visibility over the journey of their order. Send email or text notifications to tell them what stage their delivery is at - this helps them feel more secure over the order's progress, and also builds anticipation towards its arrival. Just make sure it's worth it when it arrives!
- Make your returns process as easy as possible. If a customer wants to return an item, there are plenty of innocuous reasons why this could be the case - it doesn't mean it's the end of the road. They may just want to change the size or colour, or want a slightly different style. DON'T look at it as a potential lost sale. DO look at it as an opportunity to show them how efficient your returns policy is, encouraging them to try different items and know they'll be able to cycle through until they find something perfect. The more comfortable they are making returns, the more they'll order, the more likely they are to find something they love and want to keep!
4. Ignore customer feedback
There are plenty of ways to measure feedback from your customers at different stages of the customer journey. Pop-ups on your storefront can be used to ask customers about their experience during the buying process, and post-purchase emails are a great point to try and capitalize on the honeymoon period when the product has arrived - ask if the product met their expectations, and if it did, direct them towards your Trustpilot profile, or wherever you are most keen to collect reviews.
Unfortunately, this feedback won't always be 100%. Even the most successful and well-reviewed businesses will have the occasional negative review, and most will have a few more than that. It's easy to see negative reviews as the end of the road, but it doesn't have to be that way. If you can demonstrate customer feedback being put into practice, you may salvage the unhappy customer and make them just as valuable an asset as satisfied customers.
Responding to reviews is an absolute must - make sure your customer service team are well-versed on the importance of responding to reviews. It's important for both positive and negative reviews to receive considered responses, showing your appreciation for satisfied customers but also engaging with disgruntled. 79% of consumers who shared complaints about poor customer experience online had their complaints ignored, according to Nextiva's 2022 research. Your customer service team's response to these complaints could be the difference between a churned customer, and one who is salvaged at the last minute.
5. Underestimate your environmental and ethical responsibility
In years gone by, it may have been easy enough to run a business without having to worry about sustainable packaging, ethically sourced materials, carbon footprint and all that jazz. But the consumer consciousness is rapidly shifting - a 2020 survey by McKinsey found that 66% of respondents consider sustainability an important factor when purchasing from a brand - and this rose to 75% amongst millennials. In 2022, it's likely these figures will be even higher, and are only going to continue to trend upwards.
And it isn't just enough to DO all the right things - you need to let your customer KNOW that you are. In the competitive eCommerce landscape of 2022, if any of your competitors are viewed as being 'greener' than you it's likely they are poaching some existing and potential customers. Here's a few examples of initiatives you can take to improve your business' sustainability and ethics, and how to keep your concerned customers happy:
- If you're using recyclable packaging, make it super obvious to the customer. Perhaps even leave a note in with an order, letting that everything you're using is biodegradable. Alternatively, if you aren't using recyclable packaging yet...look to make it available as soon as possible.
- If applicable to your business, try to use locally-sourced materials and products. Supporting small businesses helps give back to your community and also offers something unique and likeable to your customers - win-win!
- Give your customers the option to deliver to a shared pickup location rather than directly to their house - by allowing a delivery driver to cut down on locations they have to visit, this can cut the carbon footprint of a delivery by up to 90%!
- Have a page on your website or storefront dedicated to outlining the steps you're taking to ensure you're staying ethical and eco-friendly. It doesn't have to be anything too flashy, but will make a great impression on environmentally conscious consumers.
- Go paperless as much as you can: whether that's eliminating needless paper and packaging from the physical product and delivery, or cutting down on wasteful use of paper in the warehouse.
Retention retention retention
We're not promising that, by following these tips, your customer retention rate will rocket overnight. But if you're serious about increasing your customer retention, make sure your marketing efforts and customer experience are fully coordinated. Shifting your focus away from customer acquisition and honing in on customer retention could be a masterstroke, but ONLY if you make sure you aren't making any of the mistakes we've listed.
If you want to learn a little more about how Shiptheory can help keep your customers happy with efficient shipping, check out the Shiptheory homepage to learn a little bit more about us.