Five ways to improve your customer retention rate
JP Arnaud-Marquez
·July 21, 2022
As most business owners know, the fastest path to profitability isn’t constantly generating new business – it’s generating “stickiness” from the customers that you already have.
Building a loyal, long-term customer base will help you increase your lifetime customer revenue, decrease acquisition costs, and increase word-of-mouth referrals, helping you effortlessly and organically generate new business thanks to your brand advocates.
Acquiring a new customer is anywhere from 5 to 25 times more expensive than keeping an existing customer, so it’s critical that you have a strong retention strategy in place to keep your customers coming back time after time.
Here are five ways to do it:
1. Deliver personalized offers to your customers
Want to keep your customers engaged? Then don’t send them generic email blasts that aren’t relevant to them. The more you can personalize your content and offers, the more likely they’ll be to make another purchase. By using a marketing automation platform that collects customer behavioral and purchase data, you’ll be able to use intel on each customer to strike when the iron is hot with the right offer.
For instance, if a customer who made a purchase last month recently visited your website and clicked on a few pairs of shoes, but didn’t make a purchase, you can follow up by sending them a special promotional offer, and curating even more shoe recommendations they might like.
2. Build a customer loyalty program
Incentivizing your customers for purchasing with you will help you keep them from jumping ship to competitors. It’s easier than ever to start a customer loyalty or VIP program, which can track each customer’s online and offline purchases with your brand and award them with “points” that can be used for discounts or promotional perks.
Beyond buying products, you can reward customers for actions that demonstrate engagement with your brand, such as sharing your content on social media, forwarding a coupon to a friend, or logging into your app every day. By using your loyalty program to encourage customers to build a relationship with your brand, you can create a connection that’s more than transactional.
3. Create a community around your brand
There are so many ways to build community these days, including within your app or website, on social media, and even IRL. Loop for opportunities to create a place for your customers to come together: For a clothing brand, that might mean encouraging your followers to showcase their looks with your products and tag your brand on Instagram; for a fitness video company, it might mean building a Facebook Group and encouraging fans to ask health and fitness questions, and share videos of them completing a daily workout.
Make sure that your community moderators or social media managers create a strategy for your community that encourages polite, friendly discussion that showcases all the ways that your products can be used. The community shouldn’t push sales, but it should provide helpful guidance that encourages members to learn more about the ways your brand can help them meet their goals.
4. Deliver best-in-class customer support
Make sure that if a customer has a question, they can find the answer immediately – and not have to play email tag for days to get their issue resolved.
In order to scale your customer support, consider using AI-enabled chatbots, which can recommend commonly searched for resources, and use natural language processing to identify the user’s search term and provide potential answers and links. Chatbots can reduce the number of support tickets that your customers open, and can often help them find the answer to their question quickly, with no need for outside support. In cases where the chatbot isn’t able to solve the problem, the customer can be routed to the right support department for immediate assistance.
Using automation to enhance your customer support makes it easier for customers to solve their own problems, while also getting the benefit of high-quality, specialized assistance when they need it. And, if a customer has a complaint, make sure that your agents have the power to make it right – providing them with a free replacement product or store credit can go a long way towards preserving a customer relationship you might otherwise lose.
5. Optimize for exchanges over refunds
We all know purchases don’t always work out, especially when they’re made online – sometimes they don’t fit, or the color doesn’t match the image, or the customer just didn’t love it, for whatever reason.
Anywhere up to 40% of purchases may end in a return, so it’s essential to put a great post-purchase experience in place for those customers to ensure that they’ll try out other products from your brand.
To do this efficiently, consider implementing a returns management solution like Loop, so that customers can easily initiate return requests via a self-service platform, rather than contacting customer support. Customers can use an online dashboard on their desktop or mobile device to see which items are eligible for a return, and then instantly receive a printable return label or a QR code that they can scan at a dropoff location for simple, packaging-free returns.
When customers request a return, your platform can ask them why they’re returning an item, and automatically generate recommendations for replacement options based on their response. For instance, if a pair of shoes was too small, they can easily exchange it for the next size up. Loop makes it a painless process to exchange one item for another, even if it’s different from the original item.
In situations where the customer is requesting a refund, you can even incentivize exchanges by offering them bonus store credit, which they can use on any item(s) in your store.
That helps you preserve a customer relationship that might have otherwise been gone for good – another important step in building retention and customer loyalty.
By putting these tips into practice, you’ll be able to keep your existing customers engaged, helping you boost your lifetime customer value.
Want to learn how Loop can help? Check out a demo.
In this article
Stay in the loop
Subscribe for product updates and Loop's biweekly newsletter.
Retain more revenue with Loop today
With Loop, your brand can offer everything from refunds to direct exchanges to shopper incentives and more. Even better? These exchanges build your business.