How to Increase Customer Retention at Home and Abroad
The borders in retail have been broken.
Would you agree that customer retention is less expensive that customer acquisition? To put it into perspective, a report by Bain & Company showed that increasing customer retention rates by just 5 percent could increase retail profits anywhere from 25 percent to 95 percent. How’s that for a spike in business?
In retail, customer retention is important for nontangible assets, but more so for tangible assets: your bottom line. As the borders of online commerce are torn apart, the key to retaining customers both home and abroad can be found in strategic customer relationship management (CRM) that's well thought-out for the entire customer journey. From pre-visit marketing to delivery and post-sale retargeting, customer retention has time and again proven to be one of the most, if not the most essential factor in driving revenue for your business in the long run.
Only One First Impression
First impressions are key, and you only get one chance. Whether you're engaging with your customer online or in a brick-and-mortar store, these customers are people. People like attention and are individuals, so specialize content for them. Technology has allowed retailers to improve in-store customer learning through the use of beacons, QR codes and location tracking. Proactive customer outreach online includes live chat, maintaining a good blog, and product videos that will reel in and maintain a potential customer’s interest and loyalty. These are only the first steps that technology will bring to the world of retail, however. Data is key, but very few companies know what to do with it.
Buying, Not Selling
People like to buy, not be sold to. Older point-of-sale (POS) systems remind the customer that they're completing a purchase; it's quite impersonal. Now more than ever, retailers have to rethink their POS. Technology at the POS has become increasingly innovative, with some large businesses opting to uplift entire transactional systems in keeping with the digital 21st century. Rightfully so, because nowadays it isn’t just the information; it's equally the experience. Transaction times are shortening, with some large retailers (e.g., CVS and Wal-Mart) opting out of human interaction entirely, giving customers the option of self-checkout. This isn't personal, but it's not intrusive either. While these examples are befitting for quick-service convenience stores, they may not apply to you if you're running a high-touch and customer-oriented retail business. These are a few things that you should keep in mind as a retailer:
- Does your checkout process align with your product and brand?
- Is your entire checkout process seamless?
- Can your customer depend on you to keep their personal data secure (i.e., are security breaches protected against)?
- How long does the customer have to wait in line at checkout?
Put yourself in your customers' shoes, and you'll have a better understanding of what the experience should be like. If your customer is struggling to enter their credit card information and an error message keeps popping up, trust falters. The more seamless the purchase process, the more likely the customer will leave your store with positive feelings and, by multiplier effect, will likely recommend your brand to their friends.
More importantly for any retailer, the POS is a crucial opportunity to implement customer loyalty and rewards programs. At brick-and-mortar stores, for example, give your customers the option to receive an email receipt. On your e-commerce site, take the opportunity to sign the customer up to make it easier for them to purchase again. Amazon.com’s one-click payments are a big part of its success, as it encourages customers to keep coming back by saving them the mundane work of re-entering customer card details and delivery addresses.
On-Demand Delivery Done Painlessly
In a day and age when companies like Instacart, Amazon and even Uber are offering instant, on-demand delivery, ensuring a seamless delivery experience for customers can go a long way in getting them to come back for more. This plays into the human crave for instant gratification. When it comes to logistics, getting it right can be a pain, but once you do, don’t be surprised to see a flock of returning visits to your store.
The "want it now" mentality is a prevalent one and no longer limited to customers that live in your immediate vicinity. Even if a customer lives 3,000 miles away, there's still an expectation that deliveries will arrive much sooner than they can. Here, expectations are key. Underpromise and overdeliver. Take a cue from Zappos’ "Delivering Happiness" motto. While the online footwear retailer promises delivery within five days, most orders are in fact shipped overnight with free returns. If customers know that they can return items easily at no added cost, you can almost guarantee shoppers coming back for more.
For your international customers, make clear costs and expectations for international shipping. One way of doing so is giving a set date for delivery so that no one is fooled into thinking that a package will arrive before it actually should. A customer will value your company more if you're upfront and honest about their expectations, especially when they're ordering items that are time sensitive (e.g., a birthday present). Ensure that your international deliveries are also properly tracked during shipment and that all expectations of customs, clearing charges and delays are well accounted for.
With a robust and powerful CRM program in place, your business can stand to benefit immensely from post-sale marketing with just a few key details from your customer database. With this, you can begin to develop long-lasting relationships with proactive and strategic customer retention marketing.
Here are a few true and time-tested ways to increase post-purchase customer retention:
- Post-purchase emails allow you to target customers with special offers, and is a good way to follow-up with cross-sell suggestions. Combined with the metrics collected at your POS, these suggestions will allow you to be increasingly targeted and accurate when it comes to knowing what your customer wants.
- Providing VIP access. Making your customers feel special is crucial. Giving the illusion of a fast-track delivery (like the Zappos example) or even offering flash sales for certain time periods will allow you to tug at your customers' heart strings.
- Say happy birthday. If you can encourage and entice customers to fill in as much information during their first purchase, your post-sale tactics can be extremely effective and robust. Offer discounts and gift bundles for special occasions.
- Friend referrals. Customers aren't lone wolves; they have close-knit social circles just like the rest of us. More often than not, word-of-mouth marketing is the most effective of all. If you're able to incentivize your customers to spread the word about your product and brand, the multiplier effect is everlasting. Offer discount or other incentives for friend referrals and, more importantly, make it easy for them to share this with their friends.
Customers are loyal to the brands that are loyal to them. A little attention goes a long way. Regardless of where your customer lives, our connected e-commerce ecosystem ensures that no customer is left behind, so you shouldn’t either. Especially when research shows that attracting a new customer can cost five times as much as keeping an existing one. Your company needs to give customer retention as much attention (if not more) as it does customer acquisition. At the end of the day, customers are humans just like the rest of us.
David Bozin is the vice president of business development at Bindo POS a retail platform that facilitates sale of real-time inventory via POS integration.