Turning customer churn into loyalty: 4 strategies you may be overlooking
JP Arnaud-Marquez
·November 17, 2022
Chances are, you’re more than familiar with customer churn – sometimes called attrition.
Typically, customers churn when they decide they don’t want to be your customer anymore and cancel their subscription, stop ordering products, or even cancel orders.
In the ecommerce industry, churn is unique in the sense that it can occur in three ways.
First, your customer may decide to cancel their order. Maybe it’s because they didn’t want what they ordered, after some reconsideration. Or maybe your competitor offered a better deal. Either way, a canceled order is one form of churn.
Another form of churn is when customers decide against ordering any other products from you – or indefinitely “pause” a subscription. This could be for many reasons: maybe the quality wasn’t what they were expecting, maybe they found something of higher quality and for a better price. It could also just be something outside of their control, like income/job loss.
The third form of churn in ecommerce is a trickier concept to understand: returns/refunds and exchanges as forms of churn. Sometimes your customers may seek a full product refund due to personal reasons. Or, possibly, because your product was not useful to them, was of poor quality, or maybe arrived and was “not as expected.”
Returns/refunds are also a form of churn because, typically, you have to take your product back in exchange for the customer’s money. Same goes for exchanges, except you give the customer another product in place of the returned product.
However, what’s most crucial at any of these stages is the overall customer experience! Depending upon how well you orchestrate the return/refund process, you will determine whether the customer will temporarily churn and eventually return – or churn for good.
But here’s the million dollar question: regardless of whether a customer temporarily or permanently churns, what is causing the churn? Is your site inaccurate? Are your products made poorly – or not what your customers expect?
According to Forrester, it costs you 5x more money to acquire new customers than to keep your existing ones. So, what’s causing your business to lose money? It’s your job as the ecommerce professional and digital marketer to discover that answer.
To help you uncover the truth, here are four strategies you might be overlooking.
1. Perform a churn analysis and learn from it.
This is a fancy-schmancy way of saying that online vendors, especially, need to qualitatively and quantitatively evaluate each aspect of your customers’ journey – especially when it comes to contact points and overall engagement.
For example, how are customers finding you – paid ads, organic social, web content, SEO/backlinks? And once you get a customer’s attention, what information do they seek – what products are they curious about?
Ask yourself, when customers/prospective customers have questions, how are they getting answers – and from whom? Look to forum websites, even major ones such as Reddit and Quora to see what people are asking – and what they’re learning about you and your products.
It’s also useful to survey past, current, and prospective customers to glean what their experience was like with your brand. You can incentivize them to respond with gift cards or loyalty points.
Ultimately, you need to determine the following information: 1) where are customers coming from, 2) what are they interested in buying from us, 3) when/why do they make their purchase, and 4) most importantly what are the reasons for exchanges, returns/refunds (aka, churn)?
2. Ensure you’re offering customers streamlined, omnichannel, universal, and high-quality customer service.
Forrester Research shows us that in order to boost customer retention, we need to focus exclusively on presenting the best, most consistent customer service.
For example, Forrester found that nearly 70% of buyers will shop more frequently at retailers who offer consistent customer service. Astonishingly, 66% of people surveyed by Forrester report that the best thing a company can do to attract loyal, repeat customers is to offer top-notch customer service and show customers that you value their time.
When it comes to ecommerce, you need to ensure that your site/app is mobilized for speed, that customers with questions have instant access to help (chatbots, live chat, or customer service line), and – perhaps most importantly – that customers receive a solid experience.
If you want to convert a churning customer into your most loyal, you need to ensure your buyers have the best possible experience at all stages of the buyer journey. PWC reports that 32% of both new and current customers stop shopping with a brand/company they love after just one negative experience.
This is particularly of essence when it comes to the post-purchase experience – including exchanges and returns.
If you create a seamless, fully-integrated, and simple returns process, not only will you “save the sale,” you also convert a would-be-churn into a potentially life-long customer who still loves your brand. Not only do you create consistent, repeat customers, your business will also reap the rewards of referral traffic.
3. Evaluate your web/app performance and do a full-sweep content audit.
While offering sound customer service experiences can help turn a churning customer into a loyal one, you may need to identify the real culprit: your messaging. In fact, 90% of consumers expect brands to provide meaningful content around their products and services.
Certainly, your overall content angle, tone, messaging, and target audience all have a massive impact on sales – but they also play a big role in returns.
Customers often make returns when the item they receive is either different than they anticipated, or is not the right fit (i.e. due to poor marketing content and product descriptions).
If you’re experiencing alarming churn rates, this should be one of the first areas you check. Go through your website/app and ensure each product description is as accurate as possible and gives your buyers accurate information as to what they’ll receive.
4. Start using an exchange-first management platform.
Many online shoppers anticipate making returns as a normal part of their buying journey. It’s important to recall that 67% of all buyers check returns policies before deciding to make a purchase.
The bottom line? You’d better make sure your returns policy is easy to find, reader-friendly, and customer-focused.
Having a sound returns/exchange policy (with free shipping) will certainly net you loyal buyers. And, more notably, you should consider that 92% of ecommerce consumers will become repeat buyers from your brand if the returns process is simple.
Regardless of why your customers seek to return items, the best play you can make is ensuring that you make the returns process as painless as possible.
For example, our automated returns solution, Loop, empowers your site to offer an on-demand return portal. Designed with your customers in mind, your buyers can initiate the returns process at any time of their choosing – regardless of whether or not your support team is available or online.
Loop instantly shows them what items are available to exchange and/or return – in fact, Loop is optimized to prioritize exchanges over returns. Our system instantly encourages your buyers to explore a range of options and offers them a multitude of complementary exchange options before they get offered a refund.
This customer-centric approach meets your buyers where they are: in search of something unique. If they’re looking for a different size, color, or other options, Loop checks your inventory automatically and shows customers the options available.
In fact, you can also use Loop to investigate why your clients are seeking returns/exchanges by customizing the “Why are you returning this item?” survey question.
Loop also offers customers bonus credit as an alternative to a return. For example, our system will show a plethora of items the customer can get instead of the item they’re returning – fully incentivized with coupons and discounts.
Overall, Loop is designed to engineer a loyal, repeat customer funnel for your business and is an ideal way to convert a churning customer into a loyal one.
Ready to see how Loop can help you stop churn? Check out a demo.
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