Numbers Don’t Lie. Research has shown time and again that the cost of retaining a current customer is less expensive than acquiring a new one. A Bain & Company report showed that increasing customer retention rates by just 5 percent could increase retail profits anywhere from 25 percent to 95 percent; hardly numbers you should ignore!
Improving customer retention is vital not just for your company’s brand and reputation, but also your bottom line. Customers no longer care about making the dividing line between online and offline commerce, the key to retaining customers both home (at your store) and abroad (online) can be found in developing stronger and more strategic customer relationship management (CRM) tools.
These steps range from the minutia of packaging to pre-purchase marketing all the way up until delivery and post-sale targeting. Customer retention has time and again proven to be an essential source of driving revenue for your business in the long run.
So what do you have to do? We’ve listed out four main components of your retail strategy that you could consider switching up to increase those customer retention numbers.
1. Make a dazzling first impression
First impressions are more important than you think. Whether online or in-store at your brick-and-mortar location, your customers should be treated as individuals and not just as sheep in a flock.
Thankfully, technology has made retailers’ lives easier with tools like in-store beacons, QR codes, and location tracking to better predict and target products that your customers would potentially buy.
On the web, proactive customer outreach includes live chat, the maintenance of a good blog as a resource, and product videos, which are all key to maintaining a potential customer’s interest and loyalty. Whether in-store or online, making a good first impression is a crucial first-step in reeling loyal and long-lasting customers into your retail ecosystem.
2. Have a super smooth purchasing process
- Never make things seem harder than they are. These are a few things that you should keep in mind:
- Does your checkout process align with your product and brand?
- Is your entire checkout process seamless?
- Can your customer depend on you to keep their personal data secure (i.e. are security breaches well safeguarded from?)
- How long does the customer have to wait in line at checkout?
Whether online or offline, all the above factors play a critical role in the customer experience and help your company build rapport with old and new customers. If your customer is struggling to enter their credit card information and an error message keeps popping up, trust will falter. The more seamless the purchase process, the more likely the customer will leave your store feeling happy and positive, and by multiplier effect, will likely recommend your brand to their friends.
More importantly for any retailer, the point-of-sale is a crucial opportunity to implement customer loyalty and rewards programs.
3. Use delivery to make customers smile
On-demand delivery is here to stay. With companies like Instacart, Amazon and even Google, jumping to dominate the space, ensuring a seamless delivery experience for customers can go a long way.
When it comes to logistics, getting it right is no easy task. The minute you work out even the smallest kinks within your delivery process (think: door-to-door in all literal senses), you’d be surprised to see how many customers come returning for another purchase.
The ‘want it now’ mentality has hardwired all of us into thinking that deliveries can be made in an instant. Even if a customer lives 5,000 miles away, there is still an expectation that deliveries will arrive much sooner than they can. As a retail owner, if you can set and beat your customer expectations, repeat orders will surely follow. Taking a cue from Zappos’ ‘Delivering Happiness’ motto – while they promise all delivery within five days, most orders are actually shipped overnight with free returns included as part of their promise.
One last thing: be cautious of international deliveries. For your international customers, make clear and distinct costs and expectations for international shipping. A customer will value your company only if you are upfront and honest about their expectations, especially when they are ordering time-sensitive items (e.g. birthday presents.) Ensure that your international deliveries are properly tracked during shipment and all expectations of customs, clearing charges and delays are well accounted for.
It goes without saying that customer support is a vital and necessary checkpoint in this journey. Mistakes happen and sometimes, even when it’s not your fault, remember that the customer is always right. If something goes wrong, make the necessary follow-up emails and ensure that you take all the steps to making sure that it never happens again. If resources allow, make sure that all feedback and enquiries are replied within 24 hours.
4. Make friends through post-sale marketing
Making sure that you have a robust and powerful CRM program (e.g. Insightly, Salesforce, Infusionsoft – Ed) in place is a surefire way of achieving success from post-sale marketing. With a few key details from your customer database, you can begin to develop long-lasting relationships with proactive and strategic customer retention marketing.
Here are a few tried and tested ways to increase post-purchase customer retention:
- Post-purchase emails allow you to target customers with special offers and is an effective way to follow-up with cross-sell suggestions
- Providing VIP access. Making your customers feel special is crucial. Giving the illusion of a fast-track delivery or even offering flash sales for certain time periods will allow you to tug at your customer’s heart strings in all the right ways.
- Don’t forget to wish them happy birthday. Offer discounts and gift bundles for special occasions.
- Friend referrals. Customers are not lone wolves, they have close-knit social circles just like the rest of us. Offer discount or cash-voucher incentives for friend referrals and more importantly, make it easy for them to share this with their friends. Social sharing buttons were invented for a reason, use them!
Home or abroad, customers are loyal to brands that care about them as individuals and provide them with consistent and seamless purchasing experiences. Regardless of where your customer lives, this ever-connected retail ecosystem ensures that no customer is left behind, so you shouldn’t either.
Especially when research shows that attracting a new customer can cost five times as much as keeping an existing one, your company should and needs to pay added attention to customer retention as much as you do new acquisitions.
Do you have any tips that you’ve successfully employed to increase your customer retention? Don’t be shy, we’d love to hear your tricks and techniques!
This post was written by Nicole Chan, Director of Communications at Bindo, a New York based unique retail technology company with an innovative iPad POS system and soon-to-be launched online Marketplace. The Bindo platform makes running a local business simple, providing merchants with the ability to once again become competitive with the large e-marketplaces, whilst providing consumers with the ability to know their neighborhood and purchase locally.