ONLINE E-MARKETING: WHY CUSTOMER RETENTION IS KEY TO SUCCESS
In order to have a successful online store, a business owner must answer this one question: how can I increase repeat purchases? Therefore, the goal of every eCommerce retailer should be to acclimatise online visitors to shopping with them, making repeat purchases a habit, and transforming one-time visitors into loyal customers. The key is customer retention.
Returning customers are the most profitable customer segment because they’re more likely than new customers to complete a sale. Despite this, a large majority of e-Commerce retailers’ marketing budgets are focused on new customer acquisition, rather than retention. If your business wants to gain an edge over the competition (and we’d like to think that you do!), you need to gain the loyalty of customers who will keep coming back. These customers will eventually grow to view shopping with you as a reflexive habit, and will bring an ROI exponentially higher than other consumers, because they will return to your store multiple times over.
New Customers Are More Expensive
On average, it costs 7 times more to gain a new customer than it does to keep an existing one.
Regular Customers Buy More
You’d need to acquire 7 first-time buyers to match the sales volume of a regular customer.
Investing in Customer Loyalty Is More Profitable Than Investing In Acquisition
Increasing your customer retention rate by just 5 percent can increase profits by 25–95 percent.
A Small Amount of Repeat Customers Makes a BIG Difference
While repeat customers make up just 8 percent of site traffic, on average, 40 percent of sales can be attributed to them.
Too Much Money Is Spent On Acquisition, Too Little On Re-engagement
For every 100 new visitors to an online store, just two actually make a purchase on average. However, about 78 percent of the retail industry’s digital marketing budget is spent on acquiring exactly this kind of traffic.
Leaking Is A Real Thing, And It’s As Bad As It Sounds
On average, a business will lose 20 percent of its customers annually because they fail to take care of, and cultivate, their existing customer relationships. In some industries this number is over 75 percent! Even though retention seems like a no-brainer, only one third of executives say customer retention is a priority. 80 percent of people who stop doing business with a company felt the company could have done something to retain them.
Typically, online marketing budgets are broken down by calculating the number of site visitors gained by each dollar spent, but this fails to take into consideration the actual amount of sales each customer brings in. These one-time visitors shouldn’t be the focus while your loyal customers wither and die off.
62 percent of consumers don’t believe that the brands they’re most loyal to are doing enough to reward them. So now is the time to offer your loyal consumers something they actually want. Like an incentive or loyalty card.
A reloadable rewards card is the perfect all-in-one loyalty device. Not only can it be used for a plethora of different programs, including contests, referrals, rebates, loyalty retention and more, it is an instantaneous reward that can be used just like cash. It lets your customers choose how and when they reward themselves. And with a branded card, they’ll be reminded that it was because of you. An electronic rewards program will also allow you to track your consumers’ purchasing habits, allowing you to personalize products and services to better fit your consumer base. This will create a closer bond with your customers, increasing interaction and customer retention.