Turning Your Attention to Customer Retention

Ron Dodby Ron Dod

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The pressure is on for eCommerce marketers. Acquisition and revenue targets are high, but the effectiveness of marketing channels is getting lower. But what if we were to turn more of our attention to retention instead? 

It costs five times less to retain an existing customer than it does to acquire a new one. Plus, LoyaltyLion research from late 2018 also showed that the top 53% of a store’s revenue comes from just 20% of customers. As such, it’s key to focus on maximising the customer lifetime value of those who already know and love your store. 

So why is customer retention so essential in today’s diluted retail space? 

eCommerce is Impersonal.

Firstly, more and more customers are expecting personalised experiences, but few feel like they’re receiving them. In fact, only 22% of consumers say they are satisfied with the level of personalisation they currently get from brands. This is unsurprising, especially considering how difficult it is to replicate an in-store shop assistant in the online space. This all shows that a store that focuses on making ecommerce truly personal, will be a store that can successfully keep customers coming back to buy time and time again.

Customers are Difficult to Reach.

We’ve already discussed that the effectiveness of marketing channels is decreasing because customers get more difficult to reach. Data from Marketing Week tells us that today, only 9% of digital ads are actually viewed for more than one second. With customers becoming increasingly blind to digital ads, stores must consider how they can use their existing customer base to stand out and attract new shoppers. 

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Competition is Fierce.

By its very nature, the ecommerce space is an exciting place to be. It evolves on a daily basis and grows fast – 13% each year to be precise. Unfortunately, that means 13% more competition enters the market every year. As a result, stores have to work harder to differentiate, explore new ways to stand out and to win the attention of customers. If you can keep your customers’ heads from turning, you’ll win when it comes to customer retention. 

Of course, it’s very easy for us to sit here and tell you why customer retention is important. But what really matters, are the quick wins that you can implement immediately to make sure that it becomes an everyday priority. So let’s talk customer retention tactics that will help you stand out from the crowd. 

Tactic #1 – Give People Reasons to Engage Between Purchases.

Too often, people associate retention and customer loyalty programs purely with points for spending. But, to truly build relationships with your customers you need to give them reasons to engage with your brand in between purchases. Consider offering rewards for actions outside of spending. For example, creating an account, signing up to your newsletter, and liking or sharing on social media. Not only will you stay top of mind in between purchases, but customers will see that they mean more to you beyond their purchases.

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Tactic #2 – Demonstrate Your Brand Values.

Today’s consumers want to shop with brands that are aligned with their values – whether that’s zero waste, fair trade or something else. 60% of millennials actually prefer to buy products that are expressions of their personality and meet an emotional need. To retain your customers past the first purchase, show that you can meet those needs and share their beliefs. Use both your loyalty program and your email updates to continually communicate your brand values, so that shoppers are excited to shop with you again. 

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Tactic #3 – Use Social Proof.

Your retained and loyal customers are the most likely to act as advocates. Therefore, they are a fantastic way to acquire new shoppers. Use points and rewards to incentivise your existing customers to create user-generated content and provide social proof. That could be in the form of reviews about your store or products, or in the form of referrals. Customers who are referred by friends or family members are four times more likely to purchase and have a higher lifetime value than customers acquired through other means. 

earn points social media

Tactic #4 – Make it Aspirational.

Finally, give customers something to aspire to by creating a tiered loyalty program that makes them want to come back and shop with you again and again. As they move up your tiers, they’ll be able to unlock more and more experiential rewards, such as early access to new product ranges, exclusive content or membership of a private social community. This will encourage them to come back and engage with your store time and time again so they can unlock more perks further down the line. 

loyalty program tiers

About LoyaltyLion

LoyaltyLion is a data-driven loyalty and engagement platform trusted by thousands of ecommerce brands worldwide. Merchants use LoyaltyLion when they want a fully customised loyalty program that is proven to increase customer engagement, retention and spend. Stores using LoyaltyLion typically generate at least $15 for every $1 they spend on the platform.

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