Customer relationships are an essential part of any business. However reasonable your actions as a seller might be, without loyal customers your profit can be not good enough. There are two main terms that describe consumers and the differences between the notions of client vs customer are sometimes not very obvious. Let’s figure out both terms.
Although the two words are often interchangeable, there is a certain difference between them and it is significant when it comes to customer relationships. Here is a list of the main features between customers vs clients.
As we can see, clients are more likely to be dedicated and loyal ones due to the longevity of their need of a service. Still, a personal approach and attention today are a must for retailers as well because the competition is extremely high. This brings up the question of customer retention and the ways to achieve it.
Customer retention: definition and importance
The definition of customer retention is simple - it is a seller’s ability to keep customers over a long time period. Why is it so important to be a better store to come back to? It might seem that the only thing that counts is the total number of buyers and orders received, but statistics prove that retaining old customers is a must for any business.
To get to know what is customer retention better, a seller must realize why it is crucial for a business. The potential of existing customers is immense:
- Repeat customers usually spend more and make orders more often
- Getting new customers is much more expensive compared to keeping the old ones
- A slight customer retention raise brings enormous profit
These facts show that often with the choice of “sustain vs maintain”, the first one is more cost-effective and profitable. But before you start acting you’ll need some exact data.
There is a significant parameter that defines a seller’s success in keeping customers - a customer retention rate. It shows how many customers in percentage terms a retailer has kept over a certain period of time. There is a simple formula that enables you to perform customer retention measurement: ((Customers at End of Period - Customers Acquired During Period) / (Customers at Start of Period)) X 100. The only thing you need to do is pick a time interval and collect the precise data.
After calculating the rate it’s time to analyze the given data and discover your customer behavior features: groups of customers that leave, reasons for them leaving, and the items that are the least popular. To make the analysis more precise you can use applications that keep all the metrics and generate reports, as well as tools for tracing your site visitors’ clicks and scrolls.
Retention marketing - a group of measures for keeping your existing buyers as well as turning new customers into regular ones - must be well planned and consist of various means. First of all you need to perform your customer base definition to learn what they need, where they originate from and what type of offers they are interested in. After setting the necessary preparations you can get down to implementing your customer retention strategies.
Customer retention strategies - winning ways to keep your buyers
The art of client and customer retention consists of a lot of effective strategies. We’ve collected some killer strategies that are regarded by most merchants as the best ones.
Cross-selling and up-selling
Encouraging customers to add some products to their cart is definitely a successful marketing strategy. To persuade buyers to do that you can offer discounts or free shipping, and offer relevant items at the checkout. For Shopify and other eCommerce platforms, there are a large number of apps that automate the process of cross-selling and make it more convenient for customers.
Retrieve cart abandoners
A large number of visitors surf your website, add some items to cart and then leave forever if you don’t remind them of their unfinished order. There are a large variety of tools that send notifications to such customers reminding them to complete their purchase. The results are amazing: people frequently do come back and buy the products.
Subscriptions and accumulative discounts
Customer retention programs are not complete without financial advantages for potential loyal buyers. They need a reason to come back to your store, so give it to them. Offer recurring payments and discounts for registered users and turn customers into dedicated ones.
One of the most obvious yet trendy ways to retain clients is to use email notifications. The variety of templates is almost unlimited: send receipts, notes of order status, product offers and much more to remind customers about your web store. Insert direct links for them to switch to your website immediately and your profit will increase.
Promote your brand in the socials
Today owning a website is not enough for an online seller. Creating pages in social networks and running your store blog are a must. This adds some work but lets you be more open to customers and communicate with them directly. Post your store news, share your experience and announce giveaways to attract audience to your webshop and create your own brand community consisting of dedicated clients. Thus, you’ll raise trust to your store and get more buyers.
Nothing motivates someone to make a purchase better than someone else’s positive experience. Ask your customers to share their impressions of their orders and show the reviews on your website. It’s better to award the most active users with some coupons or tiny presents to encourage them to make reviews. Like the strategies given above, this one can also be performed using some utilities developed for online stores.
Make your customers happy
This one is the most general yet simple strategy that requires no specific tool. To retain customers you must be a seller that cares. These days the concept of a personal approach is among the hottest eCommerce trends so it must be taken into consideration.
What is the most direct cause of customer loyalty? Positive customer experience. This factor includes a lot of details, each of which matters. Your site interface, mobile support, web pages design, etc. stand for tech features. Apart from that, the whole organization of your work is important. Payment methods, shipping, terms and your inventory are essential as well - they are the reason people come to you.
Some small aspects that must be fixed to keep clients include the following:
- Clear information at home page and no false promises
- Personal treatment: birthday gifts or discounts for a certain number of purchases
- Friendly communication and customer support
- Pay attention to each customer complaint: negative reviews spread faster and can cause a lot of damage to your business
There are many more efficient retention strategies than the ones given above; some of them are universal and others might work only for specific kinds of business (e.g. raising prices can be effective for the so-called luxury goods). Customer retention, on the whole, is an activity that deserves a merchant’s attention as its profit potential is surprisingly high. Set high customer service standards and comply with them, and soon you’ll get a large group of your own dedicated shoppers or clients.