6 Strategies to Increase Your Customer Retention Rate
We all know that customers are the lifeblood of any business. Running a successful e-commerce store is not just about making a sale and moving on to the next customer, it's about establishing long-term relationships with customers who come back again and again. The more customers you have coming back, the better your business will be
That is why we compiled this list of six low-cost strategies you can use to increase your customer retention rate. Let’s get clear on what customer retention is and how it’s calculated to be sure we’re on the same page.
What is Customer Retention?
Customer retention is a metric that tells you how many customers or clients come back to your business month after month. It’s important because stable customer behaviour means stable sales numbers and profits. To increase your customer retention rate, you need to increase the number of people who return each month.
Of course, it’s not a one-to-one relationship. Not everyone who comes back to your store every month will spend the same amount of money or have the same purchasing power. But if you increase customer retention, overall sales numbers should increase alongside it.
How is Customer Retention Calculated?
Customer retention is calculated as a percentage:
(Number of customers at the end of period - Customers acquired during the period) ÷ Number of customers at the beginning of period) = Retention Rate
For example: let’s say you started the month with 100 customers, gained 30 new customers and ended the month with 120. You would do this calculation:
(120 - 30) ÷ 100 = 0.90 = 90% retention rate
To increase your customer retention, you need to increase the number of customers that come back month after month, or decrease the percentage of monthly customer churn.
Let’s take a look at some strategies you can use to increase your customer retention rate.
How to Improve Your Customer Retention Rate: 6 Ways
Below are six strategies you can apply to your business to increase your customer retention rate.
1. Offer a Great Customer Experience
People love to feel appreciated, and the best way to do that is by offering a great customer experience. You can increase customer retention with improved customer experiences in four key areas:
- Product quality
- Availability of your products
- Ease of purchasing process
- Speed of delivery
Offering world-class support is also important for improving the customer experience. Everyone has experienced poor customer service at least once. But when you offer excellent service on top of everything else, people will feel valued and appreciate going back to your business time after time.
2. Provide Incentives for Repeat Customers
One of the easiest ways to increase your customer retention rate is to provide incentives for your existing customers to keep coming back. Incentives for returning customers don’t have to be expensive.
They can be in the form of discounts, invitations to exclusive events or products, early access, free shipping on orders over $100, or any number of other perks that you can think up.
3. Brand Your Products
One of the most effective ways to increase your customer retention rate is by branding your products well. This could be in the form of giving each product an identifying mark or symbol, like Nike’s swoosh logo, or having a specific brand colour scheme for all of your products.
When you use symbology consistently across all of your products, it creates a recognizable image in people’s minds that will increase customer retention rate, simply because they are more likely to come back over time when they see familiar branding.
4. Invest in Marketing Campaigns that Build Relationships with Consumers
It’s not just about getting people to buy your product; it’s about keeping them coming back. Marketing campaigns can increase customer retention because it makes your business more visible in the long run, even if you’re not making immediate sales.
To increase customer retention with marketing campaigns, focus on relationship building. Create ads that build a bond with consumers and convince them to rely on your brand for their future purchases.
Think of ways you can market yourself as a life partner or convenient helper, rather than just another company trying to make a few bucks off of people.
5. Understand Your Customers on an Intimate Level
One of the best ways to increase your customer retention is to increase your understanding of your customers’ individual needs and preferences. This allows you to easily market products directly to them using dynamic outlets like email marketing, blog posts, and text messaging.
For example, if you know that 80% of your clients are women who live within five miles of a downtown city area, you can increase customer retention by targeting this specific group with ads for specific products they would be interested in.
This sort of personalized marketing increases customer retention because it makes it easy for people to find you even when they aren’t actively looking for new companies or websites that offer similar products.
6. Offer Flexible Shipping Options for Your Customers
Another effective way to increase your customer retention rate is by offering flexible shipping options. This could mean free shipping for orders above a specific amount, expedited or overnight delivery, or even multiple shipping speeds.
Offering flexible shipping options increase your customer retention because shoppers will enjoy the convenience shopping with you provides. That said, shipping products to customers can be quite a hassle to manage, especially when you're growing fast.
However, working with a fulfilment centre that can handle flexible shipping options, dispatches orders quickly, and has a high pick accuracy solves the shipping problem. Allowing you to focus on other aspects of increasing your customer retention rate.
Begin Your Journey to Boosting Your Customer Retention Today
The end goal of any business is to provide its customers with an exceptional experience. When you can offer them something that goes above and beyond, they’ll remember your name when it comes time to make another purchase.
A good starting point is offering flexible shipping options. The good news is, shipping management is one thing you don't have to worry about any more.
At Bezos, we make sure everything runs smoothly by taking care of all aspects of product shipping and delivery, including warehouse storage, transportation, inserting flyers - even labelling!
Tick shipping management off your bucket list by requesting a quote from us today.