Customer retention management

How to manage customer retention

If you’ve ever thought about how hard it is to get more customers to stay – this page is for you. And rest assured, you are not alone – many retailers are struggling. Keep reading and we will give you tips on how to get started, what metrics to focus on when working with customer retention management, how to calculate and follow up.

Download the video “customer retention” to learn more about the topic, and get free templates on how to communicate with your customers!

Definition of customer retention management

Let’s start with the first part: customer retention. Put simply, it’s about your ability to engage and inspire your customers to come back. It’s closely tied to customer experience and customer loyalty since you can’t have one without the other. If your customers have a bad experience, they won’t come back for another purchase and they won’t become loyal!

Read more: Definition and importance of customer retention

Customer retention management involves everything you can control when it comes to keeping existing customers. You can manage different strategies and invest in platforms that will help you increase customer retention. And this should be part of any retailer’s strategy, who are looking to expand and grow their business!

Why investing in a customer retention system matters

Acquiring new customers cost about seven times more than keeping existing ones. And why is that? Because a new customer takes a lot of marketing efforts and paid media to attract! An existing customer has already been convinced to buy once. But even though it doesn’t take as much cash to get them to shop again, there’s way more to it than just relying on your great products to make them come back!

Customers who get great experiences continue to shop from you and love your brand will surely recommend you to others. And they will make sure your revenue goes through the roof if you do it the right way! That, my friend, is why you need to invest in customer retention management.

Schedule a 15 minute call with Voyado

Start managing customer retention

Behind every successful retailer hides a bunch of pretty awesome strategies! And customer retention is no exception. You can’t rely on luck to get recurring customers. But what you can rely on for this one, is your customer data. You need to get to know your customers, their interests, and behaviors to know what strategies to use. And the only way to do that is to start collecting, analyzing and structuring your data.

Read more: Customer Retention Strategies: 8 Expert Advice

Best practices to retain your customers

This is obviously a matter of which industry you are in, and who your customers are! But there are definitely initiatives you can work on improving regardless.

Read more: 6 secrets to customer retention

Calculate and follow up on customer retention

All this sounds really great, right? But one question remains – how do you follow up to make sure the strategies work? You can calculate the customer retention rate (CRR), and this is an example of how you do it:

Let’s say you want to see the CRR of Q4. You need these three numbers:

  1. How many customers did you have at the beginning of Q4
  2. How many customers purchased at the end of Q4
  3. Count the number of new customers you got during Q4

Now let’s get down to math!

Customers who purchased during Q4 – New customers during Q4 / Number of customers at the beginning of Q4

X 100 = Your CRR

Customer retention tools and features in Voyado

Voyado is a customer loyalty platform with six main features. And included in these six features are a lot of gems! Here are some highlighted metrics you can use to increase customer retention by using Voyado:

Churn score predictions

This is exactly what it sounds like: a number that shows if your customer is about to churn or not. And this is a number that can be brought to you thanks to the power of AI. The score looks at the customer’s overall engagement – measuring things like opening rates, click rates, purchase frequency, etcetera. You want your customers to have a low score, because the higher the number, the higher the risk of the customer leaving. You’ll find that your customers belong in one of these three categories:

It’s a great way for you to find the customers who haven’t made purchases in a while and send them some engaging communication! Set up different strategies for your communication by combining the churn score with their overall activity level.

We are excited to use the churn scores on customers because we strategically have a strong focus on our loyalty program and want to optimize our efforts to be as relevant as possible to our customers based on their behavior and try and impact it based on our customers needs.” – Shpresa Salihi, By Malene Birger A/S

Customer segmentation

Voyado is built on a CDP that stores all the personal customer data, purchase history, CLV, open rates, and much more. Every point of data you see on each customer profile can be used to create segments. This is an extremely effective way for you to create a list of customers who haven’t purchased in say six months.

But remember to hyper-personalize your communication! It’s not enough to segment on the latest purchase if you want to get the most out of it. In Voyado’s email design editor, you can create one dynamic email that will turn into different looking emails based on what criteria you want each module to appear for. You do it by adding terms to the different modules you drag and drop into the template.

Example: The retail brand KC who, among other categories sells cosmetics, sets up an email. In this email, they set up criteria for different modules. So, women between the age of 20-30 who haven’t shopped in 6 months will see a module where you show the latest lipstick colors. And men between 30-40 who haven’t shopped in 6 months will see a module with the latest aftershave.  

Marketing automation powered by customer data

Hey, now we’re talking serious effectiveness. If you haven’t fully understood the power marketing automation has for you as a retailer – well, then grab a coffee and read all about it!

To get into how you can work with marketing automation for customer retention, here is an example:

  1. Customers who have a CLV of more than 300 euro
  2. Customers who have a CLV of less than 300 euro

Read all about marketing automation and how it works in Voyado   

Personalized product recommendations

What better way to inspire a new purchase than handing our personalized recommendations? By using Voyado’s own product recommendations engine, you’ll be able to just drag and drop a module into the email you’re creating. The module populates products based on the customers’ previous purchases, visits to your site, products previously added to their cart, and what they have clicked on in social media. It also excludes products that have already been bought!

 

 

 

 

 

 

 

Benefits of using Voyado

Well, customer retention is far from everything you can work towards with Voyado. The fact that the platform consist of six major features under the same roof is one of the greatest benefits. You’ll get it all, without having to hire external consultants and agencies to calculate things like CLV, churn score, email designs, track reward statuses and organize data.

Get all the stats, tips, strategies, and how to work proactively with customer retention management by watching this video:

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Voyado is tailored and built for retailers, and we have made our powerful and complex platform extremely easy to use! Yes, we’re kinda proud of that.

For us, Voyado is the perfect combination of power and usability. Using internal resource, the platform gives us the ability to act on customer insights and successfully create great customer experiences.” ­ – Pär Gancarz, NetOnNet

See Voyado and everything the platform can do by setting up a demo today.

Frequently asked questions

Some of our most common questions when it comes to customer retention in retail

What are the most crucial factors for keeping customers?

If there's one thing you should focus on, it's the customer experience. Provide the customer a seamless journey from the first to the last touchpoint. Make it as personal as it can possibly be because a customer who gets a great experience with relevant products and communication has the highest chance of shopping from you again.

What other tools are available in Voyado's platform?

Voyado is one platform with the power of six features – which all have different tools within. The main features you will find are CDP, Insights, Marketing Automation, Campaign, AI & Predictions, and Loyalty. Voyado is tailored for retailers and offers everything you need to create customer loyalty under the same roof.

How is Voyado different from other customer retention softwares, services or solutions?  

For one, Voyado is built and created specifically for retailers. That means all the features are seamlessly working for anyone within the retail business. And Voyado makes the complexity of creating hyper-personalized communication very easy since the platform is so easy to use. Just to mention a few.

Does Voyado's customer retention platform provide predictive churn scoring?

Yes, it does. If you choose to work with churn scoring in Voyado, you will get a score between 0,00-1,00 on all your customers where the higher score the customer has, the higher their risk of churning. Use these scores as a trigger for marketing automation flows to prevent customers from churning.

Is customer retention more effective than acquisition in retail?

It is if you look at the costs. It is about seven times more expensive to acquire a new customer compared to keeping an existing one! And a customer who has bought from you once is about 25 % likely to buy again. A customer who bought from you twice is 45 % likely to make a third purchase.

What are the most important customer retention metrics to keep an eye out for?

Churn score, Net Promoter Score (NPS) and Customer Lifetime Value (CLV) are all important metrics you will be able to measure in Voyado.

Why book a demo of Voyado?

Because you owe it to yourself and your brand! Find out for yourself what it is about Voyado that makes so many retailers chose this particular customer loyalty platform.

It’s not just because Voyado is built specifically for retailers or because it’s so easy to use – it’s more than that. And that’s why you need to book this demo.

Fill out the form on your right, and we’ll reach out to set up a time.

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