Acquiring a new customer costs five times as much as reselling to an existing or previous one. This reason alone should be enough to convince any business owner to start paying closer attention to their retention rates. According to a recent study carried out by one of the world’s leading marketing companies, 82% of business owners agree that retention proved to be a lot cheaper than the cost of acquisition. In fact, the likelihood of selling to a new customer is around 5 – 20% whilst the probability of re-selling to an existing customer is 60 – 70%.
As you can see, spending more time and effort on retention rates is more likely to increase your online conversions. Here are some of the best practices used by ecommerce websites to increase retention and conversion rates:
Award loyal customers with great discounts
One of the best ways to draw people back to your site is by awarding their loyalty with special offers. It helps if these offers are exclusive and given to your loyal customer base BEFORE making them available to the general public. This will make your customers feel as though their loyalty has been awarded, encouraging them to continue to purchase from your company.
Use Customer Accounts Effectively
Imagine yourself as a new customer about to make a purchase on your site. Before your checkout is complete, you are given the option to either set up an account with your company, or checkout as a guest. The majority of first time customers will click on the guest checkout option because it is less time consuming, whereas setting up a whole new account can come across as being an unnecessary and lengthy commitment. The best way to utilise customer accounts is to prompt consumers to create one AFTER the order has been completed.
Implement an Email Marketing Strategy
Encouraging your customers to sign up with their email addresses will provide you with the unique opportunity to re-target previous customers with personalised emails. This will help you to build a closer relationship with your online consumers. You may wish to seek professional assistance when it comes to email marketing. Getting it right can result in massive improvement with regards to your site’s conversion rates, but getting it wrong can be a horrific mistake. Bombarding your customers with too many emails can tempt them into deleting their account with your company, or blocking your emails altogether. You need to make sure your email campaign has the right balance.
Utilise social media to better connect with customers
As a business looking to boost retention rates, social media is one of the best tools at your disposal. It enables you to reach out to your customers and connect with them on a more personal level. You are no longer a giant corporation with a blurry face to your customers, instead, you transform into a living and breathing organization. Post to your social channels often and take time to connect with your followers. Update your channel with news updates, promotions, new products and upcoming events etc. to help generate excitement and enthusiasm around your brand.