Since it’s important to keep attracting new customers, it’s just as important for companies to nurture existing customers.
The E-Commerce Times spoke to several customer loyalty experts to think about why cultivating current customers is important – and how to encourage them to stay with them.
“Assuming a company has a recurring revenue model – SaaS, maintenance, loyalty, or repeat sales – loyalty is just as important as new customer acquisition,” Candyce Edelen, CEO and founder of PropelGrowth, told E-Commerce Mal.
“In fact, the cost of retention is a small fraction of the cost of acquiring customers. This is especially true for any model that does not have the CAC recovered in the first few months of the customer lifecycle,” she offered.
Well worth the cost
Ultimately, if you don’t focus on customer loyalty and retention, it can end up deciphering all of the work it takes to acquire those customers.
“Companies that don’t focus on customer loyalty and maintain those relationships are really shooting themselves in the foot,” explained Edelen. “Promoting existing customers can pay off tremendously when it comes to reducing churn, improving lifelong customer benefits, and promoting referrals, testimonials, and positive word of mouth.”
Given the cost of acquiring customers, it only makes sense to try to keep them.
“The cost of acquiring a transaction on platforms like Amazon continues to rise,” Kunal Chopra, CEO of Kaspien, told the E-Commerce Times.
“In addition, freight costs have increased significantly around the world. This has put pressure on the profit margins of market companies. Acquiring loyal repeat customers is therefore an excellent way to increase the lifetime value of a customer relative to the cost of acquiring a new customer.” he added.
The pandemic has also made caring for existing customers a priority more than ever.
“Covid has pushed more brands to sell online, which has increased competition for sellers,” Chopra said. “In addition, Amazon has over 5 million sellers of its own, so it is vital for sellers to maintain loyal customers and market share.”
Trust and rewards
Building trust is one of the key components for successful customer loyalty.
“Eroding trust with a bad customer experience is one of the surefireest ways to lose a regular customer,” said Chopra. “For example, if a customer receives the wrong item after ordering from Amazon and reaches out to you for a solution, make sure you provide them with one.
“Depending on the Amazon fulfillment method, they may need to contact Amazon for a solution. However, once they have reached out to you as a seller, do whatever you can to help them. Avoid just contacting them Forward Amazon as it is Amazon’s fault. ” received the wrong item. ‘
“They are still your customers. So treat them as such and you can make a loyal customer by providing them with a great experience. The same goes for any online marketplace.”
It is also important for businesses to remember to pay attention not only to new but also to existing customers.
“I’m always shocked when companies only offer discounts or premiums for new customers,” explained Edelen. “You’re basically telling existing customers, ‘We don’t care.’
“Customer support is sometimes inadequate when the company does not hire the right talent or train them properly. Outsourcing support is often a killer for customer relationships. To change that, customer retention should be as high a priority as customer acquisition. Exercise You teams to be effective in this area, setting goals and KPIs and rewarding success as much as you track and reward sales. ”
Building a community
Ultimately, one of the best ways to retain and retain existing customers is to create a sense of community that extends beyond products and services.
“Brands and companies should aim to build a tribal community, which I personally value when I endorse or consume a brand and its products,” Matthew Hayes, managing director of Champions (UK) told the E-Commerce Times.
“As much as it is about a brand’s product or service, it’s also about the experience of the whole process, personalization and a person-to-person approach. While we are living in an era of immense digitization, brands shouldn’t be doing this . ” Don’t forget that they are targeting people, not robots, and keep this in mind when communicating with consumers, “he advised.
This community, in turn, helps create repeat customers – since the identity of the customer is woven into the brand itself – and helps businesses understand what types of rewards and incentives are best for specific customers.
“When you know how much and how often a customer is spending with a brand, you can offer rewards, discounts, and other incentives that also translate into buybacks,” said Hayes.
“In addition,” he continued, “sending a handwritten note or message to a valued customer can also go a long way – be it a simple thank you, early access to a fresh start, or offering one.” Referral incentive. ”
Beyond the sale
Customer loyalty involves thinking beyond the first sale and into the future relationship with each customer.
“Brands need to understand that sales happen in the middle of the customer experience and that they have to devote the same amount of effort and attention to the after-sales experience as they do to customer acquisition,” stressed Hayes. “This will lead to reorders and branding.”
“It is clear that the future of customer loyalty and retention will be online and in a variety of digital forms,” he added. “The future is just that – digital.”
A big part of the success of digital engagement is the level of personalization it enables and facilitates.
“Number one is personalization,” said Hayes.
“In an increasingly complex and socially distant world, people need more personalized communication from their digital product providers, not less. It’s about using automation, digitization and data intelligence to provide personalized and tailored service to customers in order to anticipate their needs immediately and fulfill and in a way that feels unique to them.
“One thing that brands and companies should focus on is consumer needs. If you consistently offer a product or service that meets the ever-changing needs of consumers, you can’t be too far wrong,” he concluded .