As a retail or e-commerce business owner, one of your main goals is to make a sale. But making that first sale is only the beginning. To succeed, you need to keep your customers coming back. Unfortunately, customer retention can be a challenging feat to achieve, especially in today's competitive market. In this blog, we'll unpack some of the challenges that retail and e-commerce businesses in New Zealand face in retaining customers and share tips and strategies for boosting customer retention.
What is customer retention?
First, let’s understand the meaning of customer retention in business. Customer retention is defined as the ability of a company to keep its existing customers and encourage them to continue making purchases. It is a key metric that indicates the loyalty of a customer base and is essential for sustainable business growth.
Retaining customers is often more cost-effective than acquiring new ones, as it eliminates the need for additional marketing and sales efforts. A positive customer retention rate is usually achieved through a combination of strategies aimed at building strong customer relationships, providing good customer service, and offering value that meets customers' needs and preferences.
Challenges in managing customer retention
With so many customers and so little time, it can be challenging for retail and e-commerce businesses to provide a tailored journey for each shopper. However, businesses that take the time to understand their customers' needs and preferences are more likely to retain their customers. According to a recent Twilio Segment survey, nearly half of consumers are likely to become loyal customers if they receive a personalised shopping experience from a retailer. Personalisation can take many forms, from offering recommendations based on purchase history to providing good and dedicated customer service.
Another challenge is the inability to collect feedback to improve the consumer journey. Customer feedback is crucial to improving your business' processes and offerings. By collecting feedback, you can identify pain points in the customer journey and make improvements to keep your customers happy. Collecting feedback can be as simple as sending a survey after a purchase or asking for feedback on social media.
Strategies for better retention of customers
Customer retention is closely linked to satisfaction level, and these strategies can be a great way to keep your customers happy:
1. Leverage CMS tools
Using customer relationship management (CRM) tools is also a great strategy for building relationships with your customers and achieving a better customer retention rate. The objective of CRM tools is to help you track customer behaviour and preferences, enabling you to offer personalised recommendations and promotions. They can also help you automate your customer service process, ensuring that your customers receive timely responses to their inquiries.
2. Offer complementary solutions
Offering value-added solutions such as same-day delivery can also help you retain customers. Shipping is essential to the e-commerce experience, and customers expect fast and reliable delivery. You can also consider providing other complementary services such as parcel tracking and scheduled pick-ups.
3. Empathise with your customers
Adopting an empathetic approach can also help you build a loyal customer base. Customers want to feel understood and valued, and businesses that show empathy and understanding are more likely to retain their customers. For example, if a customer is unhappy with a purchase, showing empathy and offering a reasonable solution can turn a negative experience into a positive one.
