Customer retention is extremely important for online store owners because it can have a significant impact on the success of their business. Here are some key reasons why customer retention is crucial:
- Repeat customers are more profitable: Acquiring new customers can be expensive, as it often involves advertising and marketing costs. On the other hand, retaining existing customers is typically much cheaper. Additionally, repeat customers tend to spend more and are more likely to purchase high-value products or services.
- Increased customer lifetime value: A loyal customer is likely to continue buying from a business over time, which can significantly increase their lifetime value. This means that each customer becomes more valuable to the business the longer they continue to make purchases.
- Boosts word-of-mouth marketing: Satisfied customers are more likely to recommend a business to others, which can help to attract new customers without the need for costly marketing campaigns.
- Builds brand reputation and credibility: When customers have a positive experience with a business, they are more likely to trust and recommend the brand. This can help to establish the business as a credible and reputable company, which can attract new customers and increase sales.
- Helps to identify areas for improvement: Retaining customers also provides an opportunity to receive feedback and identify areas where the business can improve. This can help to refine products and services, improve customer service, and enhance the overall customer experience.
Remember it is much easier and more efficient to retain existing customers than to recruit new ones, which has to do with financial and management resources.
Every brand or store should set up, not only a proper marketing plan, but alongside it, or as part of it, a plan for retaining existing customers.
Here are some measures and components that should be included in the business plan of every business:
- Customer profile map – Invest your resources in creating an interaction / visits / shopping map for each customer in the past year. The map will provide you with graphic information such as when the customer visits your store, how often he comes, how often he buys, what he usually buys, how much he spends. For the next step, fill in the gaps (the periods without interaction) with complementary products (i.e., night treatment face cream for those who bought day treatment face cream) or any other content that generates added value relevant to the customer’s interests.
That is called Interaction Gaps Offerings -Suggestions and content based on an in-depth knowledge map is the most basic and efficient move for customer retention and data leverage.
- E-mail-based retention marketing which is continuous and focused on tailor-made content for the customer. The e-mail should be focused on content rather than on sale offers. Personal emails should be sent rather frequently but no more than once or twice a month.
- VIP Program – Let customers feel special. A feeling of exclusivity results in high level of attention and allows to bridge interaction gaps effectively.
- Control tools – One of the most important things for customers is their sense of control (of their spending and opportunities). Develop a utility tool that will be available to customers which provides them with a sense of control. This could be a calculator, an expense management tool or a bot which they could also use for any question or advice.
- Cross Platform Presence – As part of getting to know your customers, find out in which digital arenas they are active and be there together with them and for them. Let them know that you live in those same arenas. Cross-platform presence is a prerequisite for long-term relationships with potential customers and consumers.
- Fill in the interaction gaps with short-term offers and offers for group purchases.
- Offer your customers a reward plan for becoming brand promoters. People who share your content and promotions and initiate talk about your store or brand are entitled to rewards and personal benefits. Keep in mind that people are more attentive to content and suggestions from their friends than those coming from the store or brand.
Your path to success relies on two main axes – customer acquisition and retention. Two axes for which it is worthwhile to prepare continuous and measurable work plans.
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