7 Customer Retention Strategies that you Must Try in 2023

“Companies focus on acquisition more than customer retention, even though it can cost 7x more to acquire new customers” – Neil Patel

What does the above statement by Neil Patel imply? 

Paying extra attention to retaining customers will save you time and money. Moreover, it will make you earn profits. Now, the next question that would have popped into your mind is how to retain customers.

Like always, we have come up with an answer that lies in our list of effective customer retention strategies. Not only the strategies, but you can also scroll down and read all about customer retention!

Highlights of the Blogs-

• Importance of Customer Retention
• 7 Bullet-proof Customer Retention Strategies
• Bonus: Customer Retention Metrics

Importance of Customer Retention

Paying heed to customer retention is important as it will help you in the below-mentioned ways-

• Higher Average Order Value: Increased trust leads to more purchases per visit.
• Increase Profits: Long-term customers are willing to explore other products, enhancing profitability.
• Better Relationships with Brand Ambassadors: Loyal customers are brand advocates, and word-of-mouth is a powerful marketing tool.
• Cost-effective Selling: Retaining existing customers is more cost-effective than acquiring new ones.

7 Bullet-proof Customer Retention Strategies

Eager to know our useful customer retention strategies? Here is a list of the most interesting ones that will work for sure. Check out!

1. Build a Relationship

Jeff Bezos rightly said “We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.” 

You should go with the same and work on improving your existing customer’s experience and building a better relationship with them.

How will you do that? We have four quick ways for it that will increase your customer retention rate as well.

a) Offer Discount on the First Purchase and After it

Welcome your customers with a gift, and they will definitely get impressed. You can simply offer them a 5 to 10% discount on their first purchase as it will persuade them to place the order. 

Furthermore, to retain them and to attract them for a repeat purchase, you can offer a similar 5 to 10 % discount after the purchase. Who doesn’t like a discount? We all do ! Isn’t it?

b) Take Note of their Feedback

Customer feedback is the key to great success. If you will work on their feedback and engage with them, they will feel included and can trust you more.

Hence, this will not only help you in forming better ties, but it will lead to improvement in your products as well.

c) Add a Personalised Touch- Suggest Products

Once the customer has purchased a product, what’s next? How can you drive a repeat purchase?

Let us help you. 

You can do so by suggesting them more products. Either they can be related to what they purchased or something that relates to their choice.

Check out the examples that you can suggest through Whatsapp marketing–

d) Offer Special Options- Buy Now Pay Later

This one is only for customers who have purchased twice or thrice from you. You can derive another purchase from them and increase your customer retention rate by offering them the Buy Now Pay later option.

This will attract them, and they may purchase again and even recommend your brand to others as it is an amazing offer!

2. Stick to your Promises- Timely Delivery & Good Quality

89% of customers are willing to re-purchase from a brand that offers high-quality products and super fast delivery. 

Therefore, if you are willing to provide both, customers will definitely purchase again from your brand. Also, you should never over-promise the estimated delivery time and then fall short. 

How can you do so?

For this, you can get a shipping solution provider that can automate your order fulfillment process and at the same time gives you features like tracking and notifications. You can easily keep your customers updated about the product and this will enhance their overall experience.

3. Woo them with a Seamless Return Process

The next customer retention strategy can help you in increasing your customer retention rate up to 30%.  According to data, 67% of customers are willing to repurchase from a brand that has a hassle-free return/exchange process. 

All in all, a seamless return process will accelerate your profits and overall sales.

4. Engage them with Interesting Marketing Campaigns

Choose the smarter way of engaging your customers by sending them the latest campaigns. Once customers make a purchase, retarget them with marketing campaigns on occasions, festivals, newly launched products, and more. You can do it by promoting these campaigns through Whatsapp, Sms, and email.

Engaging them with interesting campaigns and the latest catalogs will keep them interested, build a positive brand image(as you are reaching out to them with good offers) and make them want to repurchase. 

5. Don’t Ignore the Power of Gamification

Today, brands have come up with new ideas through which they captivate their existing customers and make use of gamification to persuade them to repurchase. You can do the same as customers often end up purchasing when offered a discount or points.

Example- Myntra offers coins as per the amount of purchase. Customers can redeem these coins for discount coupons etc. Isn’t it a smart way of increasing Customer lifetime value?

6. Hit Two Birds with One Stone- Launch a Referral Program

The second and last customer retention strategy is something that you must try. It will not only get you to repeat purchases but will make you earn new customers. 

Yes, we are referring to a referral program.
Leverage your existing customers to earn new ones. Offer your existing customers discount coupons or a special off if they refer your brand to a friend and they make a purchase. It’s the perfect example of hitting two birds with one stone!

7. Work on Customer Support

Do you know resolving queries through customer support can lead to a purchase?

All your customers want to feel heard and someone who can solve their issues. If you do so, they will purchase again and even put a good word in for you. So, work on improving your customer support process. 

Bonus: Customer Retention Metrics

1. Repeat Customer Rate

The repeat customer rate shows the percentage of customers who make a second purchase from you and is essential for customer retention. A high rate means more customers are likely to return to your store. You can easily calculate it by below formula-

2. Purchase Frequency

Purchase frequency reveals how often customers return to your store and is crucial for revenue, especially for product categories with repeat customers.

 3. Average Order Value

Average Order Value (AOV) is a metric used in ecommerce to measure the average amount of money a customer spends on each order.

4. Customer lifetime value

Customer Lifetime Value (CLV) is a metric used in ecommerce to estimate the total amount of money a customer is expected to spend on a business over the course of their lifetime as a customer.

5. Churn Rate

Customer churn rate is the percentage of customers who stopped purchasing within a certain period. It can increase due to unmet expectations, better alternatives, or subscription payment issues. You should try and keep the churn rate low by identifying it first. Here is the formula for the same-

Final Takeaway

From customer retention strategies to important metrics, we have covered everything for you. Furthermore, we can also help you in increasing your customer retention rate by up to 80%. Are you ready? Increase your CRR right now!

Frequently Asked Questions

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