It’s almost time to get back to school, meaning it’s definitely time to test your knowledge 🤓
Retention is essential to your bottom line because?
- It's 6-7 times more expensive to acquire a new customer than it is to retain an existing customer.
- A 5% increase in customer retention can increase company revenue by 25-95%
- Retained customers buy more often and spend more than newer customers. They've learned the value of a product or service and keep coming back, again and again.
Before jumping into the ins and outs of implementing a retention-first mindset, it’s a good idea to review the terms and phrases you’ll likely come across. Save and download this eCommerce Retention Glossary to use in the future. Got it? Good.
Did someone say academic research?
It’s time to put in the work and cement your scholar status. Before we send you the next email, think through how you might start tackling these challenges as you start to shift toward a retention-first mindset.
- Mindset shift: It might be time to rethink the processes or systems needed to retain existing customers. Are stakeholders only looking at short-term metrics such as conversion rate and new customer acquisition?
- Resource allocation: Consider new technologies, improving customer service and support, and developing loyalty programs and subscription programs, or other retention initiatives.
- Lack of data & insights: Insufficient customer data can make it difficult to personalize the customer experience, develop targeted initiatives, and measure the success of retention efforts.
- Competitive pressures: Your competitors may be investing heavily in marketing and advertising to attract new customers, meaning you’ll need to find creative ways to stand out and differentiate yourself from the pack.
- Technology limitations: This can include limitations in customer relationship management (CRM) systems, lack of automation for retention initiatives, and outdated or cumbersome processes.
We’re not leaving you out to dry though!
Retention is becoming just as important as acquisition, but that doesn’t really make developing a retention strategy any easier. Study up!
Here are a few 💡tips & tricks 💡to make the transition smoother.
- Set retention goals: Set goals for retention metrics like CLTV, retention rate, repeat purchase rate, and customer loyalty. These goals should be communicated to all stakeholders and tracked regularly to measure progress.
- Incentivize retention efforts: Incentivize employees to prioritize customer retention by tying performance metrics and rewards to retention goals.
- Foster a culture of retention: Make customer retention a core value by incorporating it into the company's mission statement and values, employee training and onboarding, and internal comms.
- Personalize the customer experience: Invest in customer data analysis to better understand customer needs and preferences and tailor marketing and communication efforts accordingly. Brands should also prioritize tailored customer service and support.
- Continuously improve: This can include gathering customer feedback through surveys, analyzing customer behavior to identify areas for improvement, and investing in new technologies and processes to better retain customers.
Next time we’ll be talking about Pillar II: Service, and how to create a retention-driven customer journey at every touchpoint! See you then.