Online stores exist to make sales, true. But earning a customer’s conversion is just the beginning of your relationship—or should be, if your ecommerce company is aiming for longevity in the online marketplace.
This is why it’s so important to focus on customer retention in addition to customer acquisition. An influx of new customers is a great start, but you want them to return beyond their initial purchase alone.
Pro tip: Pay attention to your existing ecommerce customers. Why? Well, according to some estimates, it costs businesses six times as much to get a new customer as it does to keep an existing one.
Furthermore, people who have already made a purchase from your store are more likely to return for future transactions.
Focusing on newly acquired customers may or may not convince them to convert; but providing a continuously favourable experience to repeat customers usually will.
Assessing Long-Term Value of Customers
The best metric to assess how well you’re retaining customers is customer lifetime value (CLV). As Kissmetrics notes, “it focuses on long-term value, not the flash-in-the-pan appeal of visitor spikes and seasonal fluctuation.”
Higher CLV obviously means higher profits. But it’s also an indicator of how effective your store is at providing a positive and functional customer experience from start to finish.
If your store has high traffic and conversion rates but low CLV, your marketing campaigns may be more successful than your user experience, customer service and product offerings.
Serving Your Existing Customers
So, what can online retailers do to boost CLV and satisfy their existing ecommerce customers?
- Optimize user experience with cloud-based ecommerce solutions capable of providing seamless navigation, quick load times, a mobile-friendly interface and secure checkout.
- Provide useful short- and long-form content in the form of blog posts like how-to articles, video clips, link roundups, industry news and more.
- Develop an email cadence that’s informative and rewarding without overwhelming subscribers.
- Create a loyalty program for recurring buyers including perks like discounts, early access to new products and customized service.
- Deliver consistent, responsive multi-channel customer service across social media platforms, phone, email and live chat.
- Streamline your payment gateway so returning customers can check out quickly and confidently.
Communicating Effectively Through the Funnel
Part of serving your returning customers well is catering to where they are in your store’s funnel. To accomplish this, you’ll need to segment and target your messaging.
Treating Customer, A (someone who’s made five purchases from your store this year) just like Customer B (a new visitor) will only serve to alienate Customer A.
But treating Customer A identically to Customer C (someone who’s made dozens of purchases over the course of three years) is also too broad of an approach. Develop a nuanced approach to engaging your customer base.
Remember, consumers like to feel valued and understood above all. You risk losing them to a competitor if your ecommerce store fails to customize your communications with returning customers and offer them relevant rewards based upon their continued patronage.
An influx of new customers won’t make up for the loss of a truly loyal customer with a high CLV.
Neglecting to pay attention to your existing ecommerce customers will also result in many “one-hit wonders” in terms of conversions.
But taking the time to build loyalty and provide a great user experience to people who’ve already bought goods from you will promote a more meaningful buyer-seller relationship. Plus, it’s cheaper to retain customers than it is to acquire new ones.