4 Steps to Nailing Customer Retention

Customer retention is all about leveraging the value of a satisfied existing customer over the cost of acquiring a new one. According to a study from Harvard Business School, in the apparel sector of online retail, new customers cost 20 to 40 percent more to acquire than they would for their brick-and-mortar counterparts. This underscores a challenge many online retailers have become all too familiar with—acquisition costs are higher for digital customers than traditional ones.

The good news? The same study showed that increasing customer retention rates by just 5 percent increased profits by 25 to 95 percent. While representing a broad range of success, even the bottom end of that increase is incredibly valuable for any business and points straight to the value of retention over acquisition.

Customer retention can be a touchy formula, with many moving parts. But looking at it using this four-pronged approach can lead to an increase in happy, loyal customers who stick around for the long haul:

1. Show them the way. Target customers based on previous purchase behavior and interests, rather than expanding their investments into other categories they’re probably not concerned with. If Customer A has made multiple tie and cufflink purchases from you, they’re more than likely not interested in a new line of women’s clubwear.

Also, keep in mind that customers don’t want a loud sign telling them they have a problem. They want to be shown in relevant, tactful ways how the retailer they already trust and have built a loyalty toward wants to help them again. For mobile users, connections are right at hand, with push notifications that are strategic and relevant.

2. Reduce pain points. Pain points are moments during online purchases that make customers experience friction during their shopping journey and all too often, abandon shopping carts.

The first major pain point for mobile shoppers are cluttered marketing offers. Don’t bombard loyal customers with information and offers they’ve shown no interest in. Remember Customer A? When ordering a new tie, having to sort through an inbox full of offers for halter dresses will slow his attempt to find the coupon code he’ll want to use. Once again, it’s all about keeping marketing efforts targeted, strategic, and considerate. The other major mobile pain point is the checkout phase. Even an enthusiastic customer may wipe their hands free of a brand if checking out on a small screen is made difficult. Compared to a typical checkout routine. which can take up to two minutes, checkout on simple app integration platforms like PayPal or Apple Pay on average takes 30 seconds. To the hyper-speedy mobile customer, that extra minute and a half might as well be a decade.

At the end of the day, customers shouldn’t have any problems finding relevant items or checking out. They should come to a site or app and find a clean, useful interface, with savvy solutions that make shopping a singular delight.

3. Keep it fresh. Avoid hurting the bottom line by focusing on how to best display and highlight products’ features and aesthetics.

Retailers should focus on continuously improving the user’s visual experience in the online store, while maintaining a recognizable brand presence. Highlighting an innovation focus is one of the strongest ways to remain relevant and respected among customers.

4. Communicate directly. Nurturing relationships with your customers is vital, but communicating with them in meaningful ways that feels more personalized can help deepen the connection a shopper has with your brand.

Using personalized communication methods like segmented push notifications and strategic email messages that deliver content related to their browsing history, demographic information, or past purchases allows customers to feel more familiar and comfortable with your brand. Once established, these relationships can have a strong, positive impact on your retention rates. 

If you’re truly selling what customers want and need, much of the battle is already won. It is critical to keep customers engaged with conversations that keep your brand, and their need for it, top of mind. Make the online store pleasant and efficient, and never stop your mission to improve customers’ satisfaction with your brand. Use these tips to craft a formula that works for your unique business, and then enjoy the relationships you’ll maintain with your most loyal customers for years to come.


Casey Gannon is vice president of marketing at Shopgate. Gannon is an experienced tech marketer, driven to develop marketing strategies that blend traditional techniques with emerging technology. Her specialties include developing marketing strategies focused on consumer and B2B acquisition and retention, building compelling marketing collateral with simple, cohesive messages and optimizing sizable marketing budgets. When she’s not looking ahead to the next opportunity, Gannon is a busy mom, soccer player, and adjunct professor at her alma mater, St. Edward’s University.

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