The golden formula for customer retention
Suppose you are an investor and you want to invest in a webshop. What would you pay attention to? On growth? Number of customers? Turnover and profit? Competition? All important factors. However, first I look at customer retention. Are you able to get customers to come back more often and keep them with you for longer?
Earlier we wrote about the personalization of e-mail, the use of mobile for customer retention, the setting up of a data chain and the use of machine learning. Looking back, all these articles are about how you can bind existing customers and stimulate repeat sales.
In my opinion, selling to existing customers is the most important factor for a successful business. In the battle with the big competitors from home and abroad, you want customers to order more often and more easily. If you sell a subscription, you want to keep customers and possibly upsell them. The extent to which you can bind existing customers says a lot about customer satisfaction, automation and the way you handle data.
In addition, the costs for a sale to an existing customer are generally lower than for a new customer. It’s not without reason that we work with my companies mainly for subscription providers. A subscription service is mainly about retaining existing customers and making them more valuable.
Unfortunately, I see that by no means all retailers are making use of their opportunities and that they are therefore missing out on many opportunities. After the first order, little or nothing is done to stimulate repeat sales and it remains to be seen whether the customer will return. Perhaps the technology is not yet in order (not everyone has a budget for a good app), or the priorities and budgets are still in the process of attracting new customers. In any case, it’s a shame and we all leave a lot of money behind.
Essential resources for customer retention
As far as I am concerned, data, e-mail and mobile are essential means to achieve more with existing customers. They are the golden triangle for customer retention. Successful retailers have put this golden triangle in order and are able to generate both more revenue and more profit.
Customer retention email
E-mail is the most cost-effective communication channel. At almost all of the profitable retailers I have seen in recent years, e-mail is in the top 3 of largest sales channels. You can automate email, personalize it and the threshold to start email marketing is low.
Mobile for customer retention
The use of mobile for ordering is still increasing. One of the reasons is that large retailers have discovered the smartphone as a channel for repeat sales. For example, I do the shopping myself via the Albert Heijn app, I buy dog food through a story order at Zooplus and I book overnight stays via the Booking.com app.
Use of data for customer retention
Data is needed to show the right campaigns and content to the right person. The foundation for successful customer retention is formed by data. You want to have duplicated sound data in one place, so that you can use it to personalise the offer and the message.
Checklist for repeat purchases
Not everyone has the budgets of an Albert Heijn and not every retailer will be able to fill in the triangle in this way. However, there are a number of practical things that almost every retailer can do to stimulate repeat sales. For example, check in your own organisation whether you have already done the following.
- E-mails and landing page are responsive.
- Order forms are prefilled when you come from email.
- Automatic campaigns have been set up to stimulate repeat sales.
- Emails contain offers and are based on user behavior and previous purchases.
- The customer can easily find and repeat previous orders.
Do you have all five? Congratulations! You probably already have a lot of revenue from repeat sales. As the number of automatic campaigns is increasing rapidly, it’s probably time to look at a central campaign management system, so that you can become even more personalized and relevant. In addition, it’s time to look at an app for existing customers. And maybe my article on the layers in a marketing architecture will help streamline your marketing further.
Do you want more information about customer retention with e-mail?
E-mail marketing is an essential part of the marketing mix for subscriptions. Basedriver is email marketing software specifically designed for this challenge. For example for automatically approaching unsubscribers, sending personal newsletters or automating campaigns. We make sure that you generate more visitors from e-mail marketing and that you can recognize those visitors on the website.
Would you like to know more about e-mail marketing with Basedriver? Please contact us for a personal demonstration.
This post is also available in: Nederlands (Dutch)