Brand owners are always looking for ways to grab the attention of new customers, but customer retention is truly the driving force behind long-term profitability. During these times of economic uncertainty, you might be wishing for ways to keep your customers without breaking the bank.
We’re here to help.
In this article, we’ll outline some actionable tips for prioritizing retention strategies without overspending. The best way to do this is to keep your strategies data-informed, so you’re not spending money in the dark!
Customer retention is exactly what it sounds like: your business’s ability to keep a customer over a specified time. Any process that re-engages existing customers to get them to return and make another purchase falls under customer retention.
If you’re like a lot of DTC brand owners, your retention efforts might be less intensive than your new customer acquisition funnels. But we’re here to tell you that the secret to sustainable business growth is keeping your existing customers happy.
Why? Because it’s six to seven times more expensive to acquire a new customer than it is to retain an existing one. A mere 5% increase in customer retention can increase company revenue by 25-95%. Not only that - retained customers buy more often and spend more than new customers, and they often refer their friends and family, which is a great revenue driver (that’s completely free!). In our BFCM 2023 Retrospective Report, 11.5% of all post-purchase survey responses indicated they were referred by a friend. That’s a huge opportunity to tap into!
The competition is high in the broad ecommerce world, so once you’ve snagged a customer, you should do your best to keep them coming back. It’s easier and more cost-effective, can boost loyalty, increase your return on investment, and even bring in new customers as a bonus side benefit.
Let’s get into some ways to keep your customers coming back without throwing money at the wall.
The first step to ensuring a customer returns is making their initial interaction with your brand memorable and enjoyable. A new customer should feel welcomed and valued, and the purchasing experience should be seamless and easy. How you onboard a customer sets the tone for the future of their relationship with you, and a positive experience will only open the door for future interactions.
Tools like Gorgias Convert can help drive more revenue by creating a seamless customer shopping experience. Offering personalized pre-sales support can make customers feel welcomed even before they make their first purchase. Gorgias Convert can also reduce bounce rates by offering unique discounts and provide instant value by offering useful insights when customers are in the consideration phase. There’s also the ability to smoothly hand off to Gorgias Live Chat for one-on-one support if the customer needs it.
Counter Culture Coffee uses Gorgias Convert to tackle the common questions customers will have about coffee, and takes an easy suggested question like “which blend do you recommend for espresso?” into an automated response that allows the customer to interact and learn about the blends without bogging down the customer support team.
Even before a first purchase, a customer provides you valuable information in the form of first-party data, such as product views, checkouts initiated, and who referred them to your site. Triple Whale tracks all of that information for you, so you can make the changes necessary to drive more conversions. Are customers bouncing from a specific product page?
As soon as the customer completes the purchase, you can foster the beginnings of a long relationship with a post-purchase survey. A post-purchase survey will not only collect information about where the customer learned about your brand, but also their initial experience with the purchasing process. Providing a spot for customers to feel heard right out of the gate can help prevent negative experiences for future customers, and can help encourage repeat business.
All of the first- and zero-party data is ripe for analysis right in Triple Whale’s Pixel Page, and your brand can use any one of seven attribution models to fully understand how customers experience and interact with your brand.
As a brand that sells exclusively online, it may initially seem difficult to create a community feel. With a lack of face-to-face interaction, you have to be creative with making customers feel welcome, valued, and *seen*.
The more information you have about your customers, the easier it will be to engage with them. As you learn more about their preferences, browsing experience, and engagement with your online channels, you can create personalized marketing efforts that resonate directly with your customers.
One mistake DTC businesses can fall into is to market to everyone. When you do that, you end up reaching no one.
Every customer is a constellation of data points, but not every customer is created equal.
When you dive deep into the data, you’ll discover customers that are more likely to make another purchase based on the copious amounts of information at your disposal.
With Triple Whale, you can utilize our pre-built RFM (recency, frequency, monetary value) segments, generated through our proprietary algorithm, that split customers into segments based on their purchase history. These include:
In addition to these pre-built segments, you can generate your own using data collected throughout the customer journey (with our Pixel) in combination with zero-party data collected through customer surveys or engaging quizzes that can reveal valuable insights into customer preferences.
Once you nail down your key cohorts, you can move on to understanding who buys what and when.
Let's say you sell makeup brushes.
In analyzing your customer data, you notice that your most loyal customers buy a foundation brush and an eyeshadow brush at the same time. You can use this data to build bundles and inform ad creatives to target the other cohorts you uncovered with special offers designed to turn recent buyers into evangelists.
Triple Whale’s Smart Customer Data Platform allows you to build dynamic audiences that automatically update based on customer activity, such as purchases or marketing interactions. This means our SCDP continuously tracks customer behavior, ensuring that your audience segments remain accurate and up-to-date in real-time.
The best way to build community is to forge meaningful connections; a membership program that encourages loyalty is an excellent way to do it!
Customers love loyalty programs that actually deliver value, and in the current economic landscape, a few extra perks and benefits are definitely welcome. Customers automatically feel committed to the brand When they enroll in a membership program that provides exclusive offers and deals. In a competitive space, they may be less likely to shop elsewhere and instead invest in the brand they’re already loyal to. This behavior is a key to retention!
The membership program itself can also unlock a great source of customer data, allowing you to use data to drive personalized experiences and exclusive and targeted offers tailored to individual preferences.
Inveterate offers a loyalty program that transforms customer behavior with valuable and immediate membership perks that drive lasting engagement. The ability to set up membership-only pricing, seasonal special gifts, free shipping, and early access to new product drops can truly impact customer purchasing behavior. You can also build retention by creating unique loyalty journeys based on specific cohorts to drive them towards even greater engagement with your brand. Inveterate has found that there are 3x as many purchases made from members compared to non-members, and 64% of member sign-ups are from first-time buyers, which turns that customer acquisition cost directly into recurring revenue.
Cozy Earth has a Cozy Earth Ambassadors Program that allows customers to gift their friends 40% off their first Cozy Earth purchase, in addition to earning $50 from each sale they refer (that’s a win-win!).
A subscription is great for a customer, because they know exactly what they’re getting and when. It’s even better for a DTC brand, because it represents predictable and recurring revenue (and a very obviously retained customer). Subscriptions allow a DTC brand to focus on customer lifetime value (LTV) instead of acquisition efforts, which, as we mentioned above, often cost a lot more.
Subscription services encourage businesses to drive long-term relationships; if you aren’t happy with the product, would you really continue to receive it on a regular basis? Signing up for an ongoing delivery means the customer is invested in the brand, and fosters good customer loyalty.
Smartrr offers subscription experiences that are tailored directly to the needs of your brand, without any difficult development work. You can set up price or shipping discounts, delivery frequencies, or volume discounts based on the needs of your customers.
To be truly successful with the subscription model, a DTC brand should ensure they’re continuously refreshing the subscription content available to keep customers excited. Also, offering exclusive content can enhance the feeling of being in a special club. Ensure your subscription strategy involves unexpected rewards, personalized gestures, and delightful surprises that leave a positive impression.
When it comes down to it, retention is all about making your customers feel seen. In the current economic climate, retaining the customers you’ve already paid to acquire is just smart business!
Low-cost ways to boost retention will start from a customer’s first impression with your brand, so crafting a memorable first experience from onboarding to receiving their first purchase should be a fun and welcoming journey. As you get to know your customers through first- and zero-party data, you can utilize that information to create offers that resonate with them directly, again making them feel seen. Finally, a subscription service that continues to offer innovative new options and the high-quality experience a customer has come to expect from you is a great way to keep a customer on the books for recurring, dependable revenue.
Keep a focused eye on retention using Triple Whale’s Summary Dashboard, which makes it easy to manage all of the metrics that matter in one place. Interested in learning more? Book a demo today!
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