Many benefits of customer retention are obvious (brand loyalty, repeat sales), but there are some non-obvious benefits you should also know about.
In the bustling world of online retail, attracting new customers is undeniably thrilling, but the true magic happens when those customers become devoted patrons of your brand. Enter Retention Marketing – the secret sauce that can turn one-time shoppers into loyal enthusiasts, fueling the sustained growth and success of your ecommerce brand.
Let’s explore the myriad benefits that make retention marketing a game-changer.
1. Maximize Customer Lifetime Value (CLV):
Retention marketing isn’t just about one sale: it’s about cultivating long-term relationships. By keeping existing customers engaged and satisfied, you maximize their lifetime value to your business. Loyal customers are more likely to make repeat purchases and become advocates, contributing significantly to your bottom line.
2. Higher Profitability : Higher Customer Lifetime Value or CLV means increased profitability for your store. If you have a high CLV it means, many of your customers treat you as a favorite and will make special efforts to shop with your brand. Such loyal customers will be more willing to give your brand a second chance or even try your new product or category extensions because they have had a good experience with your brand in the past. Learn more on 14 best takeaways for 2023 for ecommerce stores here.
3. Cost-Effective Strategy : Acquiring new customers can be a costly endeavor. Retaining existing customers, on the other hand, is often more cost-effective. Retention marketing focuses on nurturing the relationships you’ve already established, making it a savvy investment for your marketing budget. Sending targeted emails is always cheaper than paid advertising. According to a KPMG study 86% of loyal customers will recommend you to their friends and family resulting in lower marketing acquisition costs and increased margins.
Access KPMG’s customer loyalty report here.
4. Personalization for Customer Delight: One-size-fits-all approaches are a thing of the past. Retention marketing allows you to personalize your communication based on individual customer preferences, behaviors, and purchase history. Tailoring your messages creates a more meaningful connection, fostering customer loyalty and satisfaction. Learn more on 6 ways to keep customers coming back. Also, learn more about Smarte Digital personalization solutions here.
5. Reduced Cart Abandonment: Cart abandonment is a significant issue, with an average abandonment rate of 70.19% in 2023.
Retention marketing strategies, such as targeted emails and incentives, can help recover abandoned carts by reminding customers to complete their purchases and providing added value through discounts or free shipping. Streamlining the checkout process, offering multiple payment options, creating a one-click checkout guest experience all go a long way in reducing cart abandonment. Learn more about ReBuy Smart Cart here
In addition, use in-checkout offers like coupon codes and product bundles, offer free shipping, and establish clear return policies. Implement exit-intent pop-ups, leverage customer reviews, and send abandoned cart emails and text messages to re-engage potential customers. For optimal cart management, consider using a tool like the Rebuy Smart Cart™.
Learn 2024 ecommerce trends and thoughts for DTC owners here
6. Word-of-Mouth Amplification: Satisfied customers are your brand’s best advocates. Retained customers are more likely to share their positive experiences with friends and family, effectively becoming ambassadors for your ecommerce brand. This word-of-mouth marketing can lead to organic growth and new customer acquisition. According to Nielson’s trust in advertising study, 88% of global respondents trust recommendations from people they know more than any other channel.
7. Feedback Loops for Continuous Improvement: Retention marketing provides opportunities for feedback and engagement. Through surveys, reviews, and direct communication, you gain insights into customer preferences and areas for improvement. This valuable feedback loop allows you to continually enhance your products, services, and overall customer experience.
Customer feedback is gold to gain insights into product development. Both positive and negative feedback can be harnessed to improve the overall customer experience for your customers. Launch surveys via Fairing, Typeform, Survicate or SurveyMonkey to build a continuous feedback loop and win trust and loyalty from your customers. Read more about Fairing’s product updates in 2023.
8. Community Building and Loyalty Programs: Retention marketing extends beyond transactions; it’s about building a community around your brand. Loyalty programs, exclusive access, and special promotions for repeat customers not only incentivize loyalty but also create a sense of belonging and exclusivity.
As we delve deeper into the world of retention marketing, prepare to discover practical tips, real-world examples, and strategies that will empower your ecommerce brand to not only attract but to retain and delight customers for the long haul.
According to a Nielsen IQ research study, 84% of customers say they’re more likely to engage with a brand with a loyalty program. With increased brand loyalty, you’ll also see lower customer churn. Learn more about the role of email marketing in driving customer loyalty and retention here.
9. A strong roadmap for product innovation: Customer acquisition is a long and expensive game with consistent rate hikes. On the other hand, a retention focused organisation not only accelerates profitable acquisition, it also provides more cash in the bank resulting in accelerated returns and the ability to invest more dollars into product innovation.
So, retention aids acquisition that’s right! Furthermore, it helps you gain control of key customer communication, by gaining reliable zero- and first-party data. This also aids in improved understanding of your target personas resulting in sharper targeting via segmentation and personalization giving your brand a competitive advantage over others.
10. An opportunity to serve customers better: Ultimately, more product innovation can result in happier customers, resulting in more sales for your business, due to increased customer lifetime value (CLTV), AOV and repeat purchase rates. This can literally help you save your business from bleeding margins, low profitability and prevent you from spiraling into un-precedented losses and an unsustainable business. Learn more about Smarte Digital email marketing services here.
Smarte Digital Inc. is an ecommerce retention marketing partner for modern DTC brands. We offer exclusive pricing offers for our ecommerce strategy consulting services and our lifecycle marketing services such as email marketing, SMS marketing services for Q1 2024.
We are also offering a free martech stack audit for Q1 2024. To identify gaps in your tech stack and optimize your martech stack, lets chat. Strengthen your foundational retention strategy now for growth, book a free 30 min discovery call with us at https://smartedigital/contact-us.
