Why customer retention matters
Customer retention is closely tied to customer experience and customer loyalty. Simply put, it’s about engaging and inspiring your customers to come back and shop with you—again and again. To make this happen, you need some pretty awesome strategies and a platform with features to manage customer data and all the stuff you want to do.
But why all this focus on existing customers? Well, acquiring new customers cost about seven times more than keeping the ones who have already bought from you. Mainly because they require a lot of marketing efforts and paid media to attract.
Four customer retention tactics your brand should use right now
- Onboard your customers as soon as they make a purchase! Send an email or text message with instructions on how to best take care of the product–or show complementing items to make the customer come back again.
- Work with a customer loyalty program where you can easily track customer behaviors. And also reward, inspire, and send personalized offers to motivate the next purchase.
- Investigate and enhance the customer experience you provide. Think everything from your website and how you display your products to paying options, delivery, and return policies.
- Personalize your communication and make it nothing but relevant for every customer. Start segmenting your customers to the core—and you’ll surely see results!
Calculate and follow up on customer retention
All this sounds great, right? But one question remains. How do you follow up to make sure the strategies work? By calculating the customer retention rate (CRR)! Here’s an example of how you do it. Let’s say you want to see the CRR of Q4. You need these three numbers:
- How many customers did you have at the beginning of Q4
- How many customers purchased at the end of Q4
- 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 * 100 = Your CRR
4 easy ways to increase customer retention with Voyado
Voyado is an easy-to-use customer experience platform with six main features. To scale up customer retention, utilize these tools:
1. Churn score predictions
This is exactly what it sounds like: a number that shows if your customer is about to churn. The score looks at the customer’s overall engagement—measuring things like opening rates, click rates, purchase frequency, etcetera. You want your customer to have a low score because the higher the number, the higher the risk of the customer leaving.
By looking at churn scores, you can find 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
2. Customer segmentation
Voyado stores customer data like purchase history, CLV, open rates, and much more—and every point of data you see on each customer profile can be used to create segments! You can, for example, create a list of customers who haven’t purchased in six months.
But remember to hyper-personalize your communication! In Voyado’s email design editor, you can create one dynamic email that will turn into different-looking emails based on what segment the receiver belongs to. You might want women between the age of 20-30, who haven’t shopped in six months, to be presented with the latest lipstick colors. And men between 30-40 to see the latest aftershaves.
3. Marketing automation powered by customer data
Now we’re talking serious effectiveness. If you haven’t fully understood the power of marketing automation—well, 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:
- Set up a workflow with the entering criteria “customers who haven’t purchased in 3 months”
- Divide the workflow into “customers who have a CLV of more than 300 euro” and “customers who have a CLV of less than 300 euro”
- Give these customers different offers. The higher CLVs can get a VIP offer, and the lower CLVs can get personalized product recommendations
Read all about marketing automation and how it works in Voyado
4. Personalized product recommendations
What better way to inspire a new purchase than by giving the customer personalized recommendations? By using Voyado’s own product recommendations engine, you just drag and drop a module into the email you’re creating. The module populates products based on the customer’s previous purchases, visits to your site, products previously added to their cart, and social media clicks. It also excludes products that have already been bought! Yes, it’s that good.
Eager to start working with customer retention management?
Of course, you are! And if you want to see the customer data platform and all the other cool features in Voyado—set up a demo.