Tom Robertshaw (@bobbyshaw) can be an Ecommerce Evangelist at Space 48, an award-winner ecommerce consultancy for forward-thinking retailers. He recently recorded a webinar with Kissmetrics, listen here.
It could be easy lose ourselves in the chronic battle of customer acquisition. Expanding the very best of the funnel to obtain additional visitors arriving at the site appears like the obvious solution to grow the business enterprise.
However, based on the Adobe Digital Index Report, returning customers constitute 40% of revenues whilst representing only 8% of visitors. This tells us there’s an enormous possibility to increase customer retention rates further to aid revenue growth.
The same report discovered that returning customers are nine times more prone to place an order than clients. This encourages to examine our investment in customer retention strategies and tools in comparison with our cover initial acquisition.
It’s a worthy investment. If you ask me, high growth merchants have healthy customer retention rates. In the very best cases, customers are returning multiple times per year which really really helps to validate the expense of acquisition.
Repeating this finding may be the consulting firm Bain and Company, who reported that increasing customer retention by 5% increases profits by 25% to 95%. It’s readily apparent that degree of profit increase not merely provides business much more breathing room, nonetheless it facilitates more reinvestment available, that leads to more returning customers. Conversely, those businesses without returning customers and the margins showing for this don’t have exactly the same sort of money to get and perpetually fall further behind their competitors.
With that at heart, it’s easy to understand how having more repeat customers could possibly be the difference between a small business scraping by and something that’s flying. Hopefully I’ve had the opportunity to validate the significance of buying customer retention, but where in the event you start?
Why would a person keep coming back?
It’s vital that you set the scene. Ignore your present website for as soon as and spending some time great deal of thought from the customer’s perspective. Irrespective of your ecommerce vertical, a person will probably return if a couple of things are true:
- You reliably fulfill their needs (Customer Experience)
- They think about you in a period of a fresh need. (Engagement)
This formula may feel a little oversimplified, but it’s beneficial to remind us that customer retention strategies aren’t nearly marketing. We have been building relationships with a customers plus they have to be in a position to trust our capability to solve their problems.
Looking first at the client experience and their needs, if they arrive on your own site, they curently have a need or desire. If we’re lucky this can be a dependence on an extremely specific product, or, if we’re not, they will have a far more generic problem which requires research and discovery. In both cases, a merchant’s responsibility would be to guide them through their journey, educate them on the offering and present them the confidence to enter a relationship. Besides that, the great thing to do would be to keep out of these way by giving as frictionless an event as you possibly can!
To accomplish that, the focus ought to be on developing a top quality User Experience (UX). It is a broad area that’s fundamental to the look of the website so isn’t a thing that I’ll cover in this post. To summarise, a niche site with an excellent user experience provides timely, precise and orderly information along with clear, prioritised and simple to use navigation and action elements.
In addition to providing a minimal friction design, we have to supply the customer confidence that people are trustworthy. There are several aspects to the knowledge which will help here. Whether it’s spending time focusing on professional branding, educating the client on the business background and history, reducing site bugs, displaying site seals or advertising multiple ways of contact clearly.
There tend to be more functional components to an effective transaction like the pricing and value offering and also the shipping methods that are offered. All of these contribute towards meeting the customers’ needs.
Moving to the second requirement that was a customer thinking about the brand in a period of a fresh need, you can find direct and indirect ways of supporting this. The direct methods will be the traditional customer retention strategies of advertising, remarketing, email campaign, catalogues, etc. However, another ways of encouraging customer engagement shouldn’t be forgotten. Providing ways for customers to actively build relationships the brand by giving user generated content features like reviews will fortify the bond.
The timing of directly calling the client is more challenging to accomplish with email but this may at the very least be tackled by customer segmentation which we shall discuss shortly.
How can you identify what you’re doing wrong?
It could be hard to recognize customer experience issues after we are expert site users, but it’s definately not impossible. It needs us to stay humble rather than assuming that we realize everything. We have to be open-minded, reflective, and empathetic to potential conditions that visitors could have. Reviewing with fresh eyes could be easier when you have fresh knowledge.
One kind of resource for acquiring new knowledge is by using heat mapping and visitor recordings tools such as for example Hotjar or Mouseflow. The simplest way to understand any type of behaviour would be to combine samples with overall statistics. Inside our case, combining analytics from Google Analytics or heat mapping tools with information supplied by visitor recordings can provide new insights into how customers connect to the website and what problems they might be having.
Secondly, there are a few great free resources to teach yourself on user experience principles. My favourite may be the Baymard Institute, that are the undisputed experts in ecommerce UX with an abundance of research and studies that help us to raised know how customers connect to different pages and specific page components.
For example, one common problem with ecommerce navigation and the rise of “mega menus” may be the difficulty moving from the top level menu item to a sub-menu item within the mega menu without accidentally activating an adjacent top level menu item. Start to see the example below on the Toys R Us site.
Increase customer enjoyment
A sure-fire method of getting customers another is to ensure it is more fun to get from you than somewhere else! There’s an enormous variety in techniques of how this is achieved, however the methods that play to the brand’s and products’ strengths will be probably the most successful. Below are a few examples of techniques the merchants we’ve caused have supported customer engagement.
1. User generated content
Charlotte Tilbury is really a makeup and beauty brand that allows customers to provide back to the city through detailed product critiques, including photo uploads. These personal reviews will aid your choice process for several customers while also promoting the authenticity of reviews.
Another way they centre the knowledge on the client is through photo uploads through the web site or social media and featuring them on the website. Both these are a good way of enabling your brand advocates that is good for them, for you personally along with other customers.
2. Product Samples
One of the challenges of the makeup and beauty market could be product discovery and giving customers the confidence to improve products. Charlotte Tilbury has tackled this by giving free samples with every order. This can be a brilliant method of promoting products, enabling discovery in addition to bringing a small amount of extra joy in each delivery!
3. Product Launches
Irregular Choice is really a fashion brand that sell truly unique shoes, bags and accessories. During the last year they’ve collaborated with Disney release a some wonderful designs inspired Star Wars, Cinderella, Alice in Wonderland and the Muppets to mention several.
It’s no real surprise to learn that customers get very worked up about such unique designs. Irregular Choice support this through product launches on advertised dates and times and market these within emails, round the site and on social media. This is often a real success when partnered with in-store shopping events aswell.
4. Rewarding Loyalty
Rewarding loyalty doesn’t have to mean implementing a loyalty points program. Through customer segmentation, we are able to identify probably the most loyal customers predicated on their spending or amount of orders and we are able to tailor our messaging. When you have product launches or sale periods, you might be able to provide them with a special or supply them with early access. Even just communicating using them on a far more personal level as you are employing the context of these previous purchases in the manner that you speak to them can make it feel more personal.
5. Thoughtful Packaging
It’s wise never to forget that the shopping experience continues completely before arrival of that and the client unboxes it.
Smythson certainly are a luxury stationery and leather goods brand with history completely back again to 1887. They spend money on this luxury experience by ensuring every order is exquisitely wrapped in tissue paper and carefully presented in an excellent gift box finished off with ribbon. This can help to position the merchandise and brand as luxury and, from experience, I could say that it creates the customer feel very special because they carefully unwrap it.
Timed and Targeted Re-engagement
Once the on-site and delivery experience has been created, the original outreach part of the client retention strategy could be tackled. The principal areas to take into account are:
- Search Ads
- Social (ads and engagement)
When approaching designing email promotions, customer segmentation is really a powerful tool to make sure that your messaging is personalised to the client context increasing its effectiveness. Even abandoned cart emails can be viewed as one type of customer segmentation.
For the ones that haven’t really started with customer segmentation, the simplest way to start would be to segment predicated on total spent and amount of orders. This can quickly give a set of VIP customers that may be sent special deals, or early usage of news and products like regarding the merchandise launches mentioned earlier. Once that is done, another group down will undoubtedly be “pre-VIP” which are customers which are primed to become brand advocates given some attention.
Another particularly popular type of email campaign during the last year is a welcome campaign. When customers sign up to the newsletter, instead of just sending a confirmation email, it’s a chance to educate them on the brand and the merchandise highlights. Instead, consider developing a 3-email series which includes information regarding the brand history and values, provides highlights on probably the most well-received blog content during the last year and in addition take the chance to continue to teach the client on the number of one’s product catalogue as well as your state of the art products.
Other campaigns types to check into include win-back, i.e. whenever a customer hasn’t purchased for some time, or perhaps a customer that is subscribed for some time and hasn’t placed an order yet.
As I am hoping it’s needs to become clear, leaving all communication being broadcast-based is crucial for customer engagement. Another level to attain beyond customer segmentation is through personalisation. Recommending different products to each customer, both on the site and in emails, is easily achievable with tools like Nosto. With only a small little bit of code, Nosto will track customer behaviour round the site such that it can intelligently suggest products predicated on their activity and extrapolated needs. This can be a particularly smart method of livening up emails, making them more personal than could ever be performed as of this scale manually.
Kissmetrics for eCommerce is really a valuable tool aswell. Kissmetrics collects person-based behavioral data, defines and tracks key customer segments and lets you engage with your visitors with an increase of targeted email and facebook campaigns. Once you create refined segments of one’s a variety of customer types and tailor messaging uniquely toward that segment you’re developing a memorable experience in the middle of your brand and customer that leads to brand loyalty and much more repeat purchases.
Paid advertising through search, social and remarketing are incredibly valuable tools in the client retention strategy chest. Each one of these should be researched, attempted, evaluated and iterated to uncover what is most effective.
The point of interest here for returning customers would be to have tracking pixels, like the Nosto code so the remarketing networks can target customers in line with the categories and products that they’re thinking about and, importantly, stop selling to once they’ve ordered.
We’ve covered a significant selection of aspects to take into account for just about any customer retention strategy but it’s definately not exhaustive list and you can find always likely to be unique opportunities for every vertical and business.
As an instant summary to utilize as reference when reviewing your strategy, be sure to consider:
- UX Review & Conversion Rate Optimisation
- User generated content
- Loyalty Programmes
- In-Store Events
- Content Marketing
- Customer Service
- Delightful shipping
- Customer Segmentation
- Personalised Product Recommendations
- Abandoned Baskets
- Email marketing campaigns
Remember, that lots of of the areas will improve conversions for clients in addition to returning ones!
Finally, within any strategy, choose some KPIs to track the potency of the strategy. I’d expect there to be KPIs for every area implemented in addition to overall KPIs. At a higher level, these KPIs would include comparing the principal KPIs of amount of sessions, orders and for that reason conversion rate between new and returning customers. I’d also recommend tracking the client lifetime value and hopefully this can increase that will warrant further investment in acquisition! Then watch the growth cycle continue!