Successful customer retention relies on constant communication between brand and customers. But how to do it without being annoying?
With carefully planned lifecycle emails.
There are various ways you can engage your customers on social media, via direct mail, paid search but email nurturing gives you the best levels of ROI in retaining customers.
Of course, the content in emails is what makes the difference between a winning lifecycle email and a losing one. We will get to this a bit later.
Put simply, customer retention works as a catalyst for future revenue.
If you manage to keep a customer, you can expect more purchases from them. And for a longer period of time. This, by itself, increases your profits and adds a number of benefits for your e-commerce business.
It is also way easier than expecting success solely by acquiring new one-time buyers. Unless you are selling space shuttles, you may want to emphasize customer retention, rather than acquisition.
Cutting down your cost-per-sale – If a customer has already purchased a product and liked it, you don’t need to spend a fortune to get them to buy some more. Whenever they like another item, they will simply want to buy it without persuasion.
Eliminating acquisition to boost sales – many e-commerce businesses in the past thought that customer acquisition is the way to go. Well, you don’t need a swarm of customers to earn profits. You need loyal, repeat customers to do so.
ROI – your expected return on investment on any customers rises with each next purchase. You may have spent $100 to acquire them and their lifetime value may be in the thousands after a year or two.
Shorter buying cycle – a retained customer buys more often which equals more consistent revenue from them.
Loyalty can get you a long way – a loyal customer may “spread the word” to their family and friends. This may result in organic referrals. You won’t pay a dime more to get fresh customers, motivated by an already loyal one.
Strengthening the brand – a business with a core of loyal customers stands out in the sea of possible online retailers. They trust you, so why shouldn’t anyone else do it, right?
First off, you are aware that you can’t get a loyal customer, an advocate of your brand, right away. There are several stages in a customer’s lifecycle with your business. We will cover them in relation with suggested types of lifecycle email types for each stage.
To gain a customer, they need to recognize you first. They learn about your brand, they do some research, and then they decide to browse further and create an account on your site. Once they subscribe, it is your turn to show them what are you all about. Show them what you stand for, what your brand values and ideals are.
Customer retention starts with a proper acquisition. The moment someone subscribes to your online store, don’t just send them a “Welcome, sir/madam” email. Expand the lines, describe how your products give solutions to their needs, not only their plain characteristics.
Studies show that a second purchase increases by 53% the chance for a third one. After that, a 64% increase for a fourth, and 70% for a fifth.
And this is how you go the way of repeat purchases and loyal customers. A proper lifecycle email should contain the needed information to retain a customer at least for another purchase.
Sometimes, the first purchase is the most difficult one. An online business owner must encourage new customers to purchase a certain item by any means possible. This is where a good ecommerce CRM that shows you what people do on your site (not just what they buy but what they look at, add to cart, etc.) is invaluable.
Promotions or discounts may erupt a wave of new purchases but personalized offers make it even better. A lifecycle email should consist not only of flashy percentages off but also a connection with the customer.
It doesn’t take too much effort. You can’t make every email personal (unless you have an army of employees). And you don’t need to. An ecommerce retention platform like Metrilo offers solutions for every type of lifecycle email. It analyzes customer behavior to give you customer segments with a specific action taken so you can personalize in batches.
Abandoned cart emails generate the most revenue out of all lifecycle emails. Simply put, they are your biggest ROI booster. If you can convert even 25% of your abandoned carts into purchases, you will have a great level of success.
Furthermore, this type of lifecycle email lets you gather valuable data about your customers. If a certain product gets abandoned a lot and never ends up ordered (which Metrilo can tell you), you know what to fix – the product page first, the featured product in your ads second and if it all doesn’t work – drop the product from your inevntory.
This will create an additional customer service interaction, which will bring even more revenue to your business.
Okay, you have the first purchase of your new customer. Nice. Now, it’s time to make them want more. To develop a profitable customer-brand relationship.
In the end, you want only loyal customers, they are the ones who bring repeat business to your ecommerce store.
The best thing about regular lifecycle emails is that they give endless possibilities. You can tell your customers about product improvements, expansion plans, future events, company updates, partnerships and volunteering activities you do.
If your customers feel close to your brand, they will read your lifecycle emails. They can even share them with others. And this is a groundbreaking step to better customer retention rates.
If you sell consumable products, replenishment emails are your best friend and a must for your business. Replenishment emails boost repeat purchase rates by 43% (own data). Here are some reasons why they are so effective in customer retention.
So, we introduced our brand, we’ve built the connection with a customer, and now we need to keep that connection intact. Nurturing with value-rich emails comes into the playfield. This stage requires a little more effort but it brings us a step closer to the final one.
Customer retention is among the most important aspect of running a profitable ecommerce business. Keep in mind, here the sales are not the only important metric. You can receive a revenue boost from the mouth-to-mouth exchange between a loyal customer and other people.
It is obvious that a repeated purchase customer won’t be a target for such type of lifecycle email. But there are those who purchase one or two times, and then they remain inactive for months. Win-back emails are placed high on the cost-effective scale. It is calculated that even one-time purchasers have a 60%-70% chance of coming back to purchase an item from your store.
There isn’t an algorithm in converting a loyal customer into a solid advocate of your brand. Nevertheless, lifecycle emails get you a decent number of steps towards that goal. They build a valuable relationship between you and your customers, and they provoke them to “spread the word” about your ecommerce brand.
How can you tell if you are a valued loyal customer to a brand? It may sound trivial but these three letters can make anyone feel a bit more special than the rest. When you are a VIP customer, you are part of a high standing group of people.
Your two keywords are personalization and scarcity. You can use them, with the help of ecommerce retention platforms, to form unique emails to each valued customer.
You can start VIP campaigns, and benefit your long-term customer base with an outstanding shopping experience. The possibilities are basically endless – discounts, pre-purchase, innovative products, real-life events, and more.
After all, 80% of your revenue comes from 20% of your customer base. Don’t strive for millions of customers, aim at the ones that stuck with you. These are the important boosters in your ecommerce machine.
If you haven’t already, plan out customer engagement with lifecycle emails at the different stages for your store. This will ensure you’re ready to be serious about your business and get loyal cutsomers who stick around.
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