22 Tactics for Improving Customer Retention – Part One

Online retailers can become too focused on acquiring new customers with marketing campaigns, special offers and so on, but it’s important not to lose sight of your most valuable customers: the ones you already have.

There is an economic reason too: attracting a new customer can cost five times as much as keeping an existing one, so retention deserves as much attention as acquisition.

Here are just a few tactics that companies can use to keep customers happy…

Customer retention: the stats

  • Attracting a new customer costs five times as much as keeping an existing one. (Lee Resources 2010)
  • Globally, the average value of a lost customer is $243.(KISSmetrics)
  • 71% of consumers have ended their relationship with a company due to poor customer service. (KISSMetrics)
  • The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20% (Marketing Metrics)

 Provide a great user experience

Great website usability is not only vital for making it easy for customers to purchase in the first place, but also for leaving a good impression on a customer so they won’t be deterred from buying again.

The importance of delivery for retention

Get the last mile right

 Delivery can be a pain for online retailers. They may sell great products, provide an excellent online experience, yet the final step in the process is in the hands of third parties who don’t necessarily share the company’s values.

Here, a reliable courier and close monitoring of service levels helps, but you can also keep customers informed on the progress of their delivery, and make the process as convenient as possible.

Kiddicare’s SMS service is an excellent example of this. Customers can be kept informed of despatch and delivery by text, and also have the option to rearrange delivery if they want to.

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Get the packaging right

Not all retailers have complete control over the delivery process, but they can ensure that the packaging has that ‘wow factor’, as in this example from Burberry:

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You could also add little extras and surprises, a tactic used by Glasses Direct. According to its founder Jamie Murray Wells:

We have always relied upon word of mouth recommendations from customers, so we add little gifts to orders, provide a little extra service, and try to surprise and delight our customers. This is the best form of marketing for us. 

Offer fast delivery options

Retailers should never underestimate the ‘want it now’ mentality. If customers know that they will receive goods quickly when they order, they’ll keep coming back.

Set and beat customer expectations

There’s something to be said for underpromising and over-delivering. For example, John Lewis will state that a delivery will take three or four working days but, in my experience, they frequently arrive sooner then that.

Registration and repeat purchases

Personalisation

 Learn about your customers and present relevant products to them based on their preferences and buying history.

This increases the relevance of offers presented to them by emails or when they return to the site. If you get this right, it makes the customer’s experience easier and makes repeat purchases more likely.

Persuade customers to register

Registration can be a pain, but if retailers can persuade customers to register without making it a barrier to purchase, then there are huge benefits in terms of retention.

They can track orders, receive special offers and, most importantly, repeat purchases are easier if delivery and payment details are saved.

Easy repeat purchases

Amazon’s one-click payments are a big part of its success online, as it makes purchases incredibly simple so encourages shoppers to keep coming back. In combination with next day delivery via Prime, it makes it almost too easy to buy from the site.

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It works by saving the customers card details and delivery address so they only have to enter a username and password.

It’s also especially valuable on mobile as consumers don’t want to waste time trying to enter credit card details on a smartphone.

Easy password/account retrieval

Most web users have so many passwords that remembering them all is almost impossible. This means that, if they haven’t purchased from a site for a while, then a forgotten password can be a real barrier.

Sites need to ensure that the password reset process is quick and easy. Or, as Amazon does, allowing users to create a new account with that email address can skip this issue:

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Retargeting

Retargeting can be a pain for web users, but when used effectively, it is a valuable tactic for retaining customers.

A well timed and well executed offer can be enough to tempt customers back to a website to purchase items they were looking at.

Read part two next week…