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5 Ways to Master Customer Retention for Your Online Store
Take a moment to close your eyes and think back to February 2020. Life was normal. The Chiefs just won the Super Bowl, Parasite won the Academy Award for best picture, and COVID-19 was just a whisper. Not to mention ecommerce was following a steady, modest growth trend upwards. Just a few weeks later, everything was different. The last 12 months have been a shared experience nobody will ever forget.
While we could go on and on about all the bad things 2020 brought us (and there are probably plenty of blog posts that do just that), one bright spot in 2020 was the major influx of new ecommerce customers flooding online. Sure, it was mostly out of necessity, but the change in consumer behavior has changed the face of retail forever. We also saw the rise of the omnichannel customer experience. Now, merchants are using digital and physical strategies to make shopping as easy as possible. But now that you’ve gotten all these new people into your store, how can you keep them there?
Customer retention is the key to rapid growth and profitability. For one, keeping your customers is 5x more cost effective than acquiring new customers. And that delta will only continue to grow over the next few years. Already the cost of acquiring new customers has risen 50% over the last five years. Investing in retention now will help grow your bottom line more than just about any other activity. In fact, a 5% increase in retention on average results in a 25% increase in profits. If that’s not enough to convince you of the importance of retention, not much else will.
But the truth is that building customer loyalty doesn’t just start once the sale is made. It’s part of an ongoing process that begins before the customer even enters your funnel and ends far after they’ve made their purchase. What are the key steps to building a loyal customer base?
Pick a strategy, any strategy:
- Unite Loyalty Programs with Brand Values
- Flaunt Positive Customer Experiences
- Invest in the Purchase and Post-purchase Experiences
- Maintain Customer Engagement
- Leverage Loyal Customers
1. Unite Loyalty Programs with Your Brand Values
Retention is all about building a connection with your customers. Being creative and utilizing the tools at your disposal is the key to building that enduring relationship. But beyond just using different tools to set up your next great digital punch card, today’s consumers also appreciate when brands inject humanity into their loyalty strategy.
If you don’t have a loyalty program already, build one now. Show your customers that the relationship with your brand is two-sided—a bit of a “you scratch my back, I’ll scratch yours” approach—and that your company authentically cares about this relationship instead of just trying to siphon money from the customer.
When it comes to setting up customer loyalty programs, Yotpo is a great tool to get started with. It helps you build a flexible rewards structure, gives your customers a simple UI to interact with, and provides instant visibility into customer loyalty metrics.
On average, Yotpo customers see a 900% ROI with their loyalty programs. When building your program, come up with creative perks your loyal customers get access to. Aside from typical loyalty program perks like free shipping, shoppers were most interested in having early access to sales and new products.
Companies oftentimes see members of their loyalty program make up the lionshare of their revenue. In fact, Ulta reported that their loyalty members make up 95% of their revenue and spend on average more than $100 per year in their stores.
Once you’ve developed a robust structure, use your loyalty program to help customers engage with the causes they’re passionate about. Look for causes that resonate well with your customers that you can support.
According to Yotpo, 85% of customers say they’re more likely to be loyal to a brand that has values that align well with their own. You can capture potential customers’ attention by creating an emotional connection with them.
For example, Sephora allows customers to donate their Sephora reward points to the National Black Justice Coalition, which become cash donations. The result of a socially conscious rewards program will be emotionally involved customers who are not only loyal, but also help you do good at the same time. Customers with an emotional connection to a brand have a 306% higher lifetime value than normal customers.
2. Flaunt Positive Experiences from Existing Customers
What’s one of the first things you do when checking out a new product or brand? Instantly go to the reviews. In fact, 95% of consumers read reviews before purchasing, and what they discover can make or break a sale. In case you were wondering if feedback and reviews truly have an impact, according to Harvard Business Review, businesses see a 5-9% increase in revenue for every star increase on their reviews, and more than half of customers won’t consider buying from a business with fewer than 4 stars on their reviews.
Positive reviews aren’t the only thing that can impact your bottom line. Negative reviews can be a huge hindrance to your growth since it’s been found that angry customers will share their frustrations with 9-15 people, spreading their bad experience far and wide.
At the same time, many customers actively seek out negative reviews to provide more context and insight into the product and actually get suspicious when negative reviews are sparse or nonexistent. Having a balanced, honest view of what your product is—as well as what it isn’t—will help build trust with your customers.
And once your store, products, or services have lassoed a few 5-star reviews, that’s just the tip of the iceberg. It’s not enough to have a few good reviews sitting idly on your site for the rest of time. You need to maintain them, grow them, and display them, taking into consideration things like customers generally won’t consider reviews relevant if they’re older than 3 months.
Set up automated campaigns to solicit a stream of fresh reviews from customers that had a good experience with your product. Removing tedious manual emails and messaging, Yotpo helps seamlessly collect reviews from your customer on site and via email, as well as helps you easily incentivize those reviews or respond to questions and concerns quickly.
Respond to each and every review, if possible—yes, even the good ones. Monitor and manage all of the pages where customers could be reviewing your company as it’s a lot easier for potential customers to find negative, unmonitored reviews than you’d think.
Finally, it’s time to flaunt it. Display positive reviews on your site to help potential customers know what they’re getting. We’re talkin’ home page, product pages, checkout pages—every touch point that a potential customer could notice and get that extra jolt of confidence. Yotpo is a great tool to help effectively display reviews. Yotpo uses dynamic AI technology to select the best reviews to show off, which also means you never have to sweat unsavory remarks being front and center on your website.
To wrap it up, when building out your review program:
- Do monitor and cultivate reviews on every platform possible.
- Don’t be afraid of a few bad reviews. The nuance helps provide your customers with a better picture of your business.
- Do respond to every review—positive or negative.
- Do display your reviews wherever you can. Home page, product page, checkout, and beyond!
3. Invest in the Purchase and Post-purchase Experiences
So, your customers trust you, they’ve browsed your site, and they plopped some stuff into their cart. Shopping is going swimmingly, but the checkout process is where you’ll lose the majority of your customers. In fact, most shoppers don’t even make it past the first step of entering some basic details in the checkout process. Cart abandonment is one of the single biggest issues facing ecommerce merchants. The average abandonment rate is 70%, which equates to a lot of potential revenue. Luckily, there are a plethora of tools out there to provide a better experience that won’t just help close the deal, but will have customers returning again and again.
Bolt, for example, lowers the barrier for checkout to a single click instead of a painful process of re-entering the same personal information on every new site. Other tools like Klaviyo or Privy allow you to email customers who abandoned before purchasing. Test a variety of tools to fuel re-engagement and find the mix that pulls your customers back in the best.
While your customers are checking out, use all available options to reassure them that they’ve made a great choice with their purchase. Use strategically placed reviews within the checkout process and give your shoppers peace of mind for their orders by enabling Route. It covers loss, theft, and damage, and it’s an easy benefit to add to your checkout process. Best of all, it doesn’t cost you, dear merchant, a single cent.
Once your customers have made their purchase, your job doesn’t stop. The time between purchase and delivery (also known as the post-purchase experience) can make or break any loyalty you might have already accrued with this customer. Shoppers have become accustomed to the Amazon experience—that is, timely updates and easy order resolution.
Unfortunately, the non-Amazon ecommerce experience has lagged behind and struggles to provide customers with the visibility and transparency they desire.
Ninety-three percent of consumers want full transparency on their deliveries at all times and 47% of shoppers say they won’t order from brands with poor delivery visibility. But with Route enabled on your site, your customers get access to a post-purchase experience that beats even Amazon Prime.
Real-time package tracking updates with visual tracking are a game-changer for your customers. And if Route package protection is enabled, any issues with the shipment, whether that be loss, damage, or theft, are covered by Route. If your customer has an issue with an order, they can easily file a claim with Route for a refund or reorder.
Nearly half of all claims are automatically resolved using Route’s resolution platform while the remaining claims are resolved manually by Route’s customer service teams. So, instead of gritting your teeth every time you send an order out and hoping nothing goes wrong, you can relax knowing Route’s got your back.
4. Maintain Customer Engagement
Ecommerce easily creates an environment that works against customer loyalty. While modern consumers are valuing brand experience more than ever, there’s still a price battle being waged. While COVID-19 has actually helped turn the tides even more as consumers look to support their favorite brands during tough times, low prices continue to pull consumers away from their favorite brands. The best way to combat consumer disloyalty is through consistent customer engagement.
Bringing your brand to the top of your customers’ minds is a tall task though. Email marketing is the classic way to provide key information and ask for feedback from your customers. Unfortunately, just about every company in the world has realized this, making space in your customers’ inboxes difficult to come by.
Instead, use Yotpo and other tools to target different mediums of communication. Yotpo uses SMS marketing to engage with customers, provide updates, and offer incentives. According to Yotpo, nearly 49% of consumers have signed up to receive SMS updates from their favorite brands. And SMS marketing has a higher open rate than just about any email out there. More than 90% of all messages are read within three minutes.
Meanwhile, Route’s branded profile pages are another place you can get exposure for your products. On average, customers using Route check the app more than 7x per order. When they check their order, they’re given a link to view your brand’s profile page. The CTR on that profile page to the left, for instance, is more than 25%, indicating that customers are hungry to engage, brands just have to open the door.
5. Leverage Loyal Customers
Now that you’ve provided a best-in-class customer experience from beginning to end and consistently engaged with your customers, chances are you’ve developed a pretty loyal relationship.
In fact, over 82% of Americans say they’re loyal to product-brands. However, your job isn’t done. You’ll still have to continue nurturing the relationship with those customers until the end of time, but as the loyalty deepens, you’re able to ask more of them. Leverage your loyal customers to access new customers and drive your cost of acquisition way down.
Customer referrals are some of the most cost-effective ways to find other customers. Potential buyers will trust their friends way more than they’ll trust you. In fact, referrals convert 30% higher than normal leads and have a much higher retention rate. Similarly, referred customers are 4x more likely to refer other customers as well. Incentivize the referral process and loyal customers will only become more of a powerhouse for your business. Use Yotpo to easily solicit customer referrals and pay out incentives without additional processes.
Better Customer Retention Is Just Five Steps Away
Whether you’re a seasoned ecommerce pro or you’ve just transitioned online due to the pandemic, we all are facing the same challenges in ecommerce. And as the omnichannel experience grows and matures, physical retail may take more of an expository role in the buying process. Investing in digital strategies to help build and maintain loyal customers is your ticket to future growth. Understand that customers won’t just be loyal because they like your product or because your prices are lower than your competitors.
Think about this: Brick-and-mortar retailers tinker with their physical space constantly to try to find the most effective ways of selling and encouraging customer loyalty. Everything from pricing to colors to smells and placement is analyzed and tested. On the digital front, Amazon has teams dedicated to optimizing just about every piece of their site. Why, then, wouldn’t you do the same for your online store?
Putting your products online, running some ads, and hoping people will buy your product isn’t enough. Creating a complete customer experience and developing a relationship with your shoppers is the only way to set yourself apart from the competition. According to Yotpo, 65% of consumers say creating a positive customer experience is more important than good advertising.
What strategies and tools you use to build that relationship is up to you. But if you’re looking for a single tool or two that can get you started, make sure you add Yotpo to your tech stack. Building loyal customer relationships is their specialty and the degree of customization and personalization you can set for your customers is unmatched.