Customer Retention Strategies

The cost to get a customer is always on the rise, and attracting new customers is becoming increasingly difficult and costly.

Post-pandemic, consumer behavior has changed, creating new challenges and making the retention of old customers more necessary than ever.

Why is customer retention essential for local businesses. Because recurring revenue from customers can boost a local business's average yearly revenue up to 40%. Having a recurring, repeatable income stream from recurring customers allows you more allowance and efficiency when planning for growth not to mention allocating more time for yourself. 

What Is Customer Retention Rate?

Customer retention indicates how many customers remained loyal to your business over a period of time. It is generally expressed in terms of a customer retention rate (CRR) that is calculated by the following formula:

Customer retention rate = [(E — N) / B] * 100

B = Customers at the beginning of a time period

E = Customers at the end of the same time period

N = New customers added during the time period

Tips for Building a Great Customer Retention Strategy

Building a fail-safe customer retention strategy isn’t easy if you don’t know what’s out there and available to you to help you. Here are some time tested tips that we’ve seen work with local businesses.

Send Personalized Content to Customers

Personalization and consistency is the key to staying connected with your customers, and encouraging them to come back to see you. You need to build a personal connection with your customers through all the engagement channels at your disposal. The most intuitive platform then, is through email.

As of now, 53% of Gen Zers and 49% of millennials feel they get “too many” emails from brands. If you want to break away from that norm and cut through inbox noise, you need to harness the power of personalized emails.

In a personalized email, you tailor the messaging, timing, and targeting according to each recipient’s unique needs. This, in turn, helps attract more people to open their emails, and drive desired actions.

Want to know the best part? Your customers already have some level of trust in your  company. If you make them feel special through exclusive deals and tailored content, you can push them to repurchase more easily than random, first-time visitors.

And if you’re able to provide better services to them, you can slowly boost your ties with them and improve your marketing ROI (return on investment).

So, go ahead and add a personal touch to your emails.

But how? Some ideas for you to mix and match:

• Include the recipient’s name in the subject line, salutation, and body content.

• Send location-specific content (recommend nearby stores, local deals, etc.).

• Segment your subscribers as precisely as you can, and then create targeted messages for each segment.

Use behavioral data from subscribers to segment your email list so you can send them more personalized messages, such as a birthday email. 

Be sure to include a  CTA are focused on gauging user sentiment through customer support.

Even if you don't have an offer or birthday data, you can still send product demos and/or usage tips, with the aim of keeping them satisfied, engaged with, and loyal to your brand.

Such hyper-targeted emails are bound to improve customer engagement and retention. And even more than that, personalized emails also need to be perfectly timed to match a consumer’s moment of need.

For example, a customer who wish listed a product can convert quickly if they are sent an attractive discount coupon for that item. Similarly, a visitor who is spending a lot of time browsing one product category may purchase something if they get a friendly email with product recommendations from that category.

But how can you recognize opportune times for sending personalized emails? You can’t watch every customer’s movement through your site individually, but you can keep tabs on their actions as a segment. Based on that, you can create automated email workflows.

These are synced with your website, CRM system, and sales tools so that they can trigger automatically when a user performs a particular action (subscribes, completes the first transaction, abandons cart, confirms an order, requests a return, etc.).

By putting your email workflows on auto-pilot, you never miss a conversion opportunity, which is what a good customer retention strategy is all about.

Provide the Option of Creating Customer Accounts

Customer accounts can boost your customer retention strategy in a big way.

Customers get one-click access to their order histories, which allows them to make repeat purchases, request returns, and check order statuses, with ease. They can also quickly access their favorite products, special member discounts, and invoices.

The result? By taking the pain out of online shopping, you put customers instantly at ease. You encourage them to return to your store again after providing them with a pleasant shopping experience.

When used strategically, this tactic can streamline most of your ecommerce metrics from sales to churn rate and beyond.

However, there is a catch: creating a customer account may be considered quite a big commitment by first-time customers, who don’t want to divulge their details to a brand they’ve just met. If given the option, they would prefer to check out as guests rather than fill out detailed contact forms.

But since customer accounts have such an impact on your customer retention strategy, it would be a blunder to neglect them.

Provide Stellar Customer Support

You can’t retain customers if you don’t serve them efficiently before, during, and after the sale. Proactive customer support will fuel your ecommerce customer retention strategy in more ways than one.

Like what?

When you are available for your customers 24×7, you provide them with a great customer experience (CX), which fosters brand loyalty. Not only that, but customers are often willing to pay a premium of up to 16% in return for good CX.

If this sounds like a good thing, it’s because it is.

Sometimes, competent and prompt customer service is the only thing required to convert a dissatisfied, angry customer into a happy one.

You can make your ecommerce website a one-stop solution for all your customer needs by incorporating a chatbot or live chat software solution into it. Using this bot, you can teach new customers about correct product usage, solve queries about site navigation, provide shipping updates, and help with whatever else might come up on the fly.

As we’ve said before, old customers are like equity for a business. Among other things, giving them priority customer support can help cement their loyalty. One way of doing that is by pushing their service requests higher up in the queue using a ticket system.

This way, you enhance your customers’ overall shopping experience, which, in turn, boosts your customer retention strategy.

Harness the Power of Retargeting Ads

Your ecommerce customer retention strategy will get a big boost if you leverage retargeting ads correctly.

Retargeting ads promote products, deals, or services that a user recently browsed, shopped, or expressed interest in. They are more effective than regular ads that are prone to “banner blindness”—a human tendency to ignore banners unless they carry recognizable content.

Just like personalized emails, retargeting ads are also tailored to each user’s needs and interests, and that’s why they have an immense conversion potential.

To create retargeting ads that feed your customer retention strategy, you will have to:

• Use urgency to create FOMO (fear of missing out).

• Include compelling customer success stories in the ad copy.

• Show products that complement a customer’s recent purchase.

• Keep passive customers in the loop by reminding them of their past buys.

You can set up retargeting campaigns on Facebook and Google. Use it so you can convert window shoppers into paying customers with ease.

Ready to Create an Customer Retention Strategy?

As you can see, for local businesses, a customer retention strategy is non-negotiable.

If you’re still not inspired to formulate a customer retention strategy for your company, here’s a parting thought:

Not having a customer retention strategy means your brand misses out on major cost savings, referral traffic, repeat purchases, and other customer loyalty benefits.