Studies from the U.S. Small Business Administration and U.S. Chamber of Commerce have found that acquiring new customers can cost five to seven times more than simply retaining existing customers, so it is within the interest of businesses to pay as much attention to customer retention as acquisition. In order to do this, it is imperative to have a good retention strategy in place.
In this article, we’ll walk you through four simple strategies for increasing customer lifetime value.
1. Remind customers of their purchase
Many e-commerce sites do not follow up with customers after their purchase. More successful shopping experiences use personalized email, display retargeting, and social media campaigns to bring customers back and encourage repeat business. They know what the customer purchased and can therefore offer further incentives, (related to that initial purchase), to bring them back.
2. Make User Accounts Easy & Quick to Create
Customer accounts allow you to create detailed demographic information about your customer base, and once a user has created an account, you can offer them the added functionality of a ‘one click checkout, much like Amazon’s 1-click ordering feature, making it quick and easy for the customer to login and complete purchases from pre-stored credit cards.
3. Follow up with customers
Following up with a customer after their product arrives is a great way to engage them in the satisfaction with their purchase as well as the overall shopping experience. A post-shipping survey is a nice way to gather feedback and is another touch point to develop your customer service and brand message with the customer.
4. Run promotional offers, not discounts
Offer your customers promotional incentives, rather than discounts, as it is bad practice to sacrifice the margin on a product to drive sales. Instead of offering monetary discounts, run special promotions, such as relevant add-ons, or free shipping on their next purchase. This removes the expectation that cost is variable and they will wait until the discount comes along the next time they make a purchase.
5. Implement an anticipatory service
Companies that offer an anticipatory service take a proactive approach to customer service. Instead of waiting for problems to occur, they can eliminate problems before they happen.
An example of this is American Airlines, who proactively text customers to advise them of flight delays.
By being proactive – you can save yourself a lot of reactive problem fixing and build the perception that you are the type of company that consistently offers ‘anticipatory service’ to your customers.