Developing A Customer Retention Program

Developing a customer retention program based on loyalty

Amazing customer experience is the single most powerful thing you can do if you want to build a successful online store.

Developing a customer retention program based on outstanding customer experience will channel your resources to delighting your existing customers, rather than slipping into an acquisition nightmare.

People buy experiences, status, feelings, not products. We explore how customer intelligence influences the customer experience people get in depth here. The probability of selling to an existing customer is 60 – 70%. What’s your average conversion rate? 10%?

Let’s work on that retention program!

The goal, of course, is increasing LTV and AOV of your existing customers. The deal sweetener is driving acquisition costs and efforts down because you’re not so dependent on new customers.

Think of it as dating compared to having a long-term relationship. It doesn’t mean that you don’t have to keep up an outstanding “customer experience”, but it doesn’t mean pushing so hard to impress every time, either. To retain customer loyalty, you need to constantly nurture.

Customer experience and loyalty

In the same line of thinking, if you seek loyalty from your customers, you should stimulate it. Nobody likes being neglected because you found a new date. Existing customers and the treatment they get should be a priority over flooding the Internet with discount coupons for new customers.

You cannot create loyalty with transaction-based incentives: “come back for $20 off”. Yes, it might work, but that’s not loyalty, that’s a loop and as soon as you remove the stimulus (discount), it breaks.

Loyalty means customers prefer your brand over the others in that category. That’s it. So to start a retention program capitalizing on that loyalty, you need to find out what they love about your brand so much.

Related: How to make your beauty brand the preferred choice over and over?

The quality? The ease of use? The really cool idea they haven’t seen anywhere else? The element of discovery every time? Your supply chain values? Your super authentic tone of voice, so close to your audience’s heart?

You’ll know after many tests and feedback requests, social media conversations, and sentiment monitoring. If there’s anything that keeps getting mentioned every time in connection to your brand, that’s it, my friends, embrace it and make it work for you.

How to start developing a customer retention program

Let’s see what you can do to deliver truly great customer experience on every step of the customer journey. In pre-purchase stage, see also

How not to drive customers away
How to establish yourself in their minds.

After the first purchase

Do what you promise or more. Nothing we suggest from now on will work, if your products don’t work or delivery is a mess. We’ll assume you got that covered.

You need to be constantly replicating that initial success in creative ways to keep customers back.

So, after they receive their first order, find out whether they seem more likely to return or to churn. Ask them for feedback and take it from there.

How to deal with one-time customers

Clearly, the ones who don’t intend to be coming back haven’t been satisfied with their first experience with your shop. Although it sounds discouraging, make use of that. Find out what drove them away and – if possible – make it right.

Their order arrived after the birthday of the kid – send them another toy. The dress was wrinkled and flat – give them a voucher for a dry-cleaner’s near them.

Who knows, maybe they don’t hold a grudge and a simple gesture showing that you care will be enough to at least lessen that number of unhappy customers.

Going back to proven churners, examine their behavior and interaction with your store (however brief). Try to identify common elements among one-timers:

  • the products they buy – maybe some of your products are misleading in terms of quality or description
  • how they find you – are your ads well-targeted?
  • what they look at before placing an order – do they seem confused about your navigation? do they read return and refund policies?
  • how many sessions of browsing does it take to place an order?

This will give you some idea what kind of people in your target groups are actually a bad fit and what you can do to either fight churn or lose them.

Now, moving to the chunk where your chances for retention are bigger.

Keep on delighting prospective repeat buyers

Instead of upselling right away, show appreciation and make suggestions for even better use of the product in the most suitable format:

  • a recipe book to go with their new blender
  • a manual on keeping their new suede shoes in top shape
  • a hiking map with their windstopper jacket

This can be a simple email exchange with a pdf in it, but it helps them explore the product’s strong features. Think of it as onboarding where you’re making sure they see the new purchase in the best way possible and start getting the experience they were looking for buying it.

Also, you start building a relationship that’s more than a transaction that way. You show them you care how they use the product and how happy they are with it. The trick is that you don’t speed too far ahead with working for the next order, but rather give them time to experience this one first – you go at their speed. If you’re in the business of financial planning, Jerome Myers business coaching program will help you better serve your clients and help you develop the best strategies for sustaining and building your financial advisory business.

Stay top-of-mind

What to do while you wait? Analyze your product’s lifecycle and your average customer order frequency. Look for the best times to introduce new products and collections based on when people are likely to be in shopping mode again.

The clothes industry follows seasonal changes. However, holidays, big events (e.g. prom), or extreme deviations from usual weather present opportunities to help out your customers. Remind them Father’s Day is coming and they’ll be thankful.

Other product niches like electronics have fewer but larger orders. Since keeping up with new technology is important there, you can offer a sneak peek into the new smart phone series you’ll get in next month along with specs and early review to build the hype.

Add a wishlist button and draw a giveaway on the day the device hits the stores. Of course, all participating loyal customers get special conditions too. They won’t look anywhere else.

Never stop innovating

There are some rumors that jewelry giant Tiffany’s may be losing ground because it hasn’t been able to innovate well enough to keep its customers loyal. They stand as a status symbol for an older generation and don’t give much more value than cheaper options.

Even if people are happy with your current offerings, you have to come up with something new every once in a while. Trends come and go, tastes and needs change, your loyal following reaches new stages in their lives, new technology, and scientific facts are discovered….

Keeping your values and basic product ideas, but constantly evolving is a great way to stay relevant to your audience. They’ll know that you still have the genuine leather handmade belts, but your designs are modern and fit for the urban macho (that’s a cool niche, by the way).

Involve customers in reinventing the brand

Better yet, bring your loyal customers on board and ask their opinion before launching a new product. They’ll feel so much involved with your brand and personally responsible for its success. They’ll feel trusted and trust you in return.аsking Customer Opinion On New Product Launch

After all, those people love your products and whether they like the direction you’re going in matters. You don’t want them all leaving after 5 years drinking your coffee because you suddenly changed course.

When you finally receive their next order

Remember, that’s not the end goal, but a part of the journey you’re organizing for the customer. So you have to be top-notch again. No wonder why Zappos is the synonym of overdelivering.

Add a little something every time to remind them of their own reasons for shopping with you repeatedly. Slip the business card of a 24/7 florist in their area in their next package just to say one more time, “Don’t worry, we got your back this wedding season.”

Or attach a few nice summer reading recommendations to their new boat shoes delivery confirmation email. Quite a nice touch.

And our team favorite – celebrate a weird holiday with them. Almost any day has been dedicated to odd things – check the calendar (or come up with your own) – like Compliment Your Mirror Day (July 3rd).

The point is to make every interaction different and memorable, fun and more than just a transaction. Step out of your seller role and be human first. Developing a customer retention program is impossible if you don’t truly appreciate each customer.

Here’s a crazy idea: especially in narrow niches where e-commerce is built on a personal passion, you and your really loyal customers have more in common than you think – you enjoy immensely the same niche product. So it should be easier to delight them, once you start thinking about them as friends instead of customers.

Keep the relationship going

Ok, they come back again and again. Don’t get too comfortable. A relationship needs constant nurturing. No-one is happy being taken for granted for too long. Find ways to make your returning customers so they feel part of an exclusive club, a community, something bigger than shopping from the same place as other people.User Generated Photos For Referral Engine

  • Give them a chance to show off an achievement that was made possible with your product. Interview went great with that sharp shirt? Hiked Mount Fuji in your gear?
  • Challenge them to create a new barbecue sauce with as few products as possible but including your acai berry (or anything equally promising of hilarious user-generated videos)

How are these working for customer retention? They just spent Saturday filming for you. Where do you think they’re getting a new pack of acai from? And yes, you made them a star for solid 3 hours on Facebook (no one knows they puffed like a steam engine going up Fuji).

Addressing complaints and handling negativity

If you do 100 things right, there always will be 1 thing you didn’t and someone’s going to hold you accountable, most probably on the social networks for everybody to see. Handling such issues openly and gracefully can turn things around in your favor.

In the example below, CitiBike NYC surprised and delighted a frequent user by making up for his unfortunate accident (falling off the bike on his way to a day full of meetings) by sending him a gift card for new jeans. Social Media Response Example

In his tweet, he clearly shows he’ll remain a customer and that the accident actually led to something very positive in his day.

The retention engine is going full-speed

Did you notice a resemblance to an Inbound strategy but after visitors convert? Developing a customer retention program relies on the  same basic concept of providing additional value with no hard-selling.

All efforts you make eventually build to the overall experience the customer gets – something like Lifetime Customer Experience. Touching their lives at various points shows that you really care, and that sells better than any coupon.

In the end, online or not, trade is an exchange between people. Friendships don’t happen for benefit, they’re born between individuals who like spending time together and share similar values.

Time to check on your favorite high-spenders? You bet.


About the author

With experience in FMCG and marketing, Dimira writes to help the brands of tomorrow succeed and believes passion is a key ingredient in any business.

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