A vehicle without fuel can’t hope to get far on the road. Nor can a business hope to stay profitable without the engine of customer retention. Ask a seasoned entrepreneur, and they’ll tell you that even the best product or service is lost without a loyal customer base. So, what are the best strategies to retain customers?
The average customer retention rate for an eCommerce company is 30%. That means for every 100 customers you have, only 30 of them are likely to come back.
Sure, you could keep chugging away at prospecting new customers, but you can’t ignore the importance of customer retention. It costs far less to retain a customer than it does to acquire a new one.
To assist with customer retention, businesses can leverage tools like BlackCurve, an e-commerce price-tracking software. But knowing the right pricing strategy is only one part of the equation – you must also focus on customer experience and engagement.
Let’s dive into 5 key strategies you can use to retain customers and increase customer loyalty and how BlackCurve can help you in the process.
Why Customer Retention Matters
Remember that moment when you landed your very first paying customer? You were willing to go over the moon and back to make sure their experience was the best it could be. You wanted them to come back to you time and again, right?
But over time, as more and more customers (likely from happy consumer reviews) come your way, the same level of enthusiasm may not always be possible.
When customers keep coming back to you, it is a sign of trust and loyalty that you have built with them. It also helps you build reliable relationships, develop long-term revenue streams, and increase customer lifetime value significantly.
Calculating Customer Retention Rate
Before you can hope to implement effective customer retention strategies, you need to know exactly how your customers are interacting with you and how many of them are returning or leaving. To do that, you need to calculate the customer retention rate:
Retention Rate = ((E-N)/S) X 100
Where E stands for the number of customers at the end of a given period, N represents the number of new customers acquired during that same period, and S stands for the number of customers at the beginning of the period.
In general, you should aim for a customer retention rate of at least 35%. This benchmark ensures that you can keep a steady stream of returning customers and that your customer base is growing, despite any fluctuations in new customer acquisition.
Most importantly, this calculation helps you to measure the effectiveness of various customer retention strategies over time.
5 Effective Strategies for Customer Retention
1. Start with Personalisation and Customisation
Every consumer wants to feel as though they are being catered to, so personalising and customising your interactions is a great way to nurture customer loyalty. However, you’ll need to have accurate data to do this.
Collect customer data on their ages, genders, locations, and other demographics that could be used to target them more effectively. This could include crafting emails with customised messages, offering discounts based on past purchases, or providing special offers tailored to their interests.
The more your ideal customer feels that you are listening to their needs, the more likely they will remain loyal. It doesn’t matter if you are looking for one-time buyers or ongoing subscription customers—being able to tailor your services to their requirements will show that you care.
2. Introduce Loyalty Programs and Rewards
Want to really keep your customers coming back? Loyalty programs and rewards are an effective way to make sure that customers remain loyal. By offering customers something in return for their loyalty, you can be sure that they’ll keep coming back for more.
You can introduce loyalty programs through a range of different strategies:
- Point-based rewards programs.
- Discounts and offers.
- Exclusive access to VIP events.
- Promotional pricing
Remember, the point isn’t to simply give away free stuff but to reward customers for their loyalty and to build a strong relationship with them. And if the idea of building loyalty programs sounds like too much hard work, there are plenty of services out there that can help you get started.
3. Practice Social Listening
Are you paying close attention to what your customers say about you online? Social listening—monitoring and responding to customer conversations on social media—is an important part of any successful brand loyalty strategy.
Harnessing data allows you to quickly respond to customer queries and complaints while also learning more about what your customers want. It’s a great way to build relationships with them, stay on top of their needs, and identify areas for improvement.
By taking the time to listen and analyse customer behaviour, you can create a more holistic view of your customers and develop relationships that enhance customer conversion and retention. Plus, you can utilise this data in your pricing strategy to make sure you are hitting the right price points.
4. Create & Provide Useful Content - Not Just Promotion
The average consumer wants more from their brand than just a sales pitch. Your customers want to engage with your organisation and learn more about the products/services you have to offer them.
Creating content that is interesting, informative, and useful for your audience can help build trust and credibility, as well as show that you value them as individuals. Publishing blogs, whitepapers, or other helpful resources can be an effective way to reach your customers and keep them engaged with your business.
Even a relatively simple eCommerce store can build a community around its products by providing content that is valuable and relevant to its customers.
5. Invest in Strategic Technology
There’s an ever-growing library of technological tools that can help you optimise and streamline your eCommerce operations. Here are a few to consider:
- Automation technologies such as bots and AI can save you time and money by streamlining processes like customer service, order fulfillment, etc.
- A customer relationship management tool (CRM) can help you gain valuable insights into customer behaviour and enable cross-selling opportunities.
- Payment gateways with advanced fraud protection features can reduce the risk of fraudulent transactions.
- Ecommerce analytics solutions can provide insight into how customers interact with your website and help you optimise the customer experience.
- Pricing tools can help you set competitive prices for your products and services with an eye for profitability and customer conversion.
Customer Retention Is Part of the eCommerce Puzzle
Understanding how to take full advantage of customer retention is an important part of any eCommerce strategy. Loyalty programs, personalised discounts and targeted offers can help you keep customers coming back for more.
But don’t forget to maintain relationships with your customers. The most important aspect of any customer retention strategy is the ability to connect in an honest and transparent way. And that starts with pricing.
BlackCurve offers leading eCommerce pricing software designed to help you hone in on the perfect prices for your products and services. Our algorithms help you adjust prices in real-time, allowing you to stay competitive and maximise profits while keeping customers happy.
Try for free, and see how you can utilise pricing to boost your customer retention with BlackCurve.