How to improve ecommerce customer retention through the buyer’s journey
JP Arnaud-Marquez
·May 25, 2022
When it comes to ecommerce, customer retention is worth its weight in gold.
In fact, research shows that increasing customer retention by just 5% can increase your company’s profits by anywhere from 25% to 95%.
By increasing your customer lifetime value, you’ll be able to reduce your spend on advertising and other methods of customer acquisition — and as you increase your base of loyal customers, they’ll be able to organically bring new customers into the fold through referrals and recommendations.
But it can be difficult to know whether a new customer is going to stick around long-term or not. To increase your customer retention, let’s look at some of the most common reasons they don’t come back — and what your brand can do to make it right for them next time.
Why customers don’t come back
Whether a customer has made a one-time purchase or has left your brand behind after years of loyalty, there are many reasons they might decide to stop shopping with you. Let’s consider a few of the more common reasons.
- They found a lower price
The ecommerce market is crowded, and customers are constantly comparing value across different brands. If they find another brand that’s cheaper but offers similar quality, they’re likely to jump ship. That’s especially true in the case of one-time shoppers who used a steep promotional discount to make their initial purchase, but aren’t as impressed with your standard pricing.
What you can do: Make sure to conduct market research to see how your prices compare to your top competitors, and consider ways to add value to your offerings even if prices are equivalent or slightly higher. For instance, if your brand offers free return shipping but your competitor doesn’t, customers may be more likely to consider making a purchase from you instead because they’re confident that you stand behind your quality. - They received poor customer support
Whether during the course of their purchase or after the fact, if your customer wasn’t happy with any element of their buying experience, they’re not likely to come back. Whether they needed to wait too long to get a response from your customer support team over a question about your product, or they didn’t receive adequate help with troubleshooting the product, a poor customer service experience will leave customers with a bad taste in their mouths that means you probably won’t see them again.
What you can do: Make sure that you have a scalable customer support team that can easily handle the number of inquiries you’re likely to receive and provide specialized help when needed. By automating some of the most common questions that may arise, such as tracking order status and processing returns, you can free up your support agents’ time so that they can provide superior service to the customers who do need personalized care. - The product wasn’t a fit for them
In ecommerce, the sales cycle often ends with a product return — anywhere up to 40% of the time, in fact. And this doesn’t necessarily mean the customer isn’t a fan of your brand; it just means that the specific product they selected wasn’t right for them. Whether the item was a clothing purchase that literally didn’t fit, or it was an area rug that clashed with the rest of their home decor, customers initiate returns for all kinds of reasons. But if you don’t give them a reason to come back, they’re unlikely to give you another shot.
What you can do: By using an automated returns management solution like Loop, you’ll be able to guide customers through a seamless returns experience that asks them why they’re returning an item, then identifies relevant alternatives to consider for a product exchange. You can even incentivize customers to make an exchange rather than requesting a refund by offering them bonus store credit, so you’ll be able to upsell them on a more expensive product. By doing this, you’ll be able to retain revenue from the return, and retain the value of the customer relationship, resulting in more customer lifetime value.
Increase customer satisfaction to increase retention
To increase ecommerce customer loyalty, it’s crucial to deliver a best-in-class customer experience for your customers at every stage of the buying cycle — including the post-purchase cycle.
From the moment your customers first engage with your brand, you should strive to deliver a personalized, streamlined experience that provides them with product recommendations based on their unique needs and preferences.
When they make a purchase, they should be able to complete transactions easily, using their choice of payment type, and receive clear, automated communications about their order status on the channels of their choice, including in-app, email, and SMS.
Their order should arrive on time, in perfect condition, and match with how it was represented on your website.
And, in situations where a customer needs to process a return, they should be guided through the returns process with a streamlined, self-service returns platform that helps them easily accomplish their goals and find relevant items for exchange.
By focusing on a great customer experience through every stage of this process, you’ll be able to build trust in your brand and encourage customers to keep coming back. Treat your customers well, and you’ll be rewarded with loyalty — helping you build your reputation and your bottom line.
Want to learn how Loop can help you improve customer retention with a better post-purchase experience? Check out a demo.
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