If you’ve been trying to find ways to increase revenue, there’s a terrific one right in front of you, just waiting to be explored: customer retention. Shoppers who have made repeat purchases at your e-commerce site are an incredibly valuable source of revenue, and if you haven’t tapped into that yet, you should.
Repeat customers may be small in numbers—between 12% and 15% of a business’s clientele is made up of these loyal shoppers—but they wield enormous power, contributing between 55% and 70% of a company’s total sales. That’s because they tend to buy more from a trusted retailer: Bain says that when it comes to fashion purchases, shoppers spend a whopping 67% more on each order with a company they’ve bought from over a period of two and a half years, compared to the total spent on their first purchase there.
It makes sense, then, that bolstering the customer retention rate and directing e-commerce initiatives towards that sector would boost your bottom line. In fact, the same Bain report found that increasing customer retention by just 5% translated into a profit increase of anywhere between 25% to 95%. So how can you get started? Here are some strategies that are all grounded in exceptional customer service—if shoppers have a good experience with a company, there is a 54% chance they will make a second purchase on a subsequent visit.
Roll out the red carpet for repeat customers.
People want to feel special, and that holds true for their shopping experience. By showing them they are valuable, they will be more likely to return. One method of doing that is by making it painless to create a customer account. Then, every time return shoppers log in, they are greeted by name, you can suggest new items for them to check out and show them previously purchased items. Streamline the path to repurchasing by making it simple—allow customers to autofill information for shipping or store their credit card information, for instance. Customers who have made at least two purchases with a retailer are nine times more likely to buy again than a first-time shopper, and anything that helps them towards that sale is beneficial.
Offer a rewarding rewards program.
Consider this the online version of those old “buy 10 frozen yogurts, get one free” cards. E-commerce sites are offering more and more customer loyalty programs built in with rewards, using a concept called gamification. Basically, shoppers can accrue points or reach certain levels to activate rewards, similar to how a video game operates—Sephora, for example, offers programs based on how much money consumers spend each year, and each purchase also accrues points that can be used on products or services. However, these programs must be relevant and easy to use so customers are invested in them: Research shows that only 36% of consumers have received a reward they would actually use, while 81% of loyalty program members don’t know how they work. Working with a partner experienced in reading customer data can help you shape an e-commerce program that speaks to your customers and makes the initiative worthwhile for them as well as for you.
Add a personal touch.
A sale to a new customer is cause for celebration, but now the real work kicks in. Once a customer makes their first purchase with you, there is a 30% chance they will become a longtime customer. You can help that conversion along by humanizing your e-commerce business. Something as simple as a handwritten thank you note can result in 50% better customer retention rates for companies, compared to those businesses that didn’t send a note. Other examples include sending a sample or small gift when mailing a purchase.
Don’t lose touch.
A smart e-mail strategy is a great way to keep you front of mind with customers so they will come back to your site. You can send one thanking them for the purchase, or asking for a review, then follow up down the road with emails that advertise special sales or discounts on items targeted for the recipient. Again, this is an initiative where it pays to work with an expert e-commerce retail partner.
Make a problem work to your advantage.
Even the top retailers sometimes encounter difficulties, such as a package that arrived late or an item that was damaged. Prompt, high-quality service is key to customer retention—according to HubSpot Research, 96% of people surveyed said if a company apologized for a problem and promptly fixed it, they would buy from that business again. Make sure your customer support is locked in, whether that’s through live chat, answering e-mails, or responding to complaints on social media channels.
Don’t miss out on the revenue stream from repeat business. Work with Branded Online as your expert e-commerce partner to improve customer retention rates, and your profitability.