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The value of customer loyalty should never be underestimated, especially in ecommerce. If you assume that the customer journey ends as soon as the user completes a purchase, you’re making a huge mistake.
The point of conversion should be looked at as the start of a long-term relationship with the customer. Immediately after a purchase is when the customer is the most engaged and excited about your brand. This is where conversion rate optimization (CRO) comes into play. If your site isn’t optimized to meet the needs of the customer, it’s very unlikely that you’ll be able to convert that sale into a long-term customer relationship.
Every business needs repeat customers in order to drive growth. But that’s easier said than done. In this article we’ll take a closer look at how to improve your brand’s customer retention through optimization, and why it’s crucial for the long-term success of your business.
To say that there are significant benefits to customer retention is a huge understatement. Research has shown that after a single purchase, a customer has a 27 percent chance of returning to your store. If that customer makes a second or third purchase, their likelihood of returning to your store for another purchase in the future increases to 54 percent.
The bottom line is: you’re going to find it very difficult to scale your business if your retention rate is low. Constantly trying to acquire new customers without focusing on your retaining current customers is an expensive and inefficient way of running a business. Customer acquisition requires a large amount of time and resources that would otherwise be allocated to growing your business in other ways. If you want to foster sustainable growth for your business, the first step should be to focus on increasing retention. Specifically, higher customer retention will equate to:
Personalization is one of the most effective and simple ways to improve your business’s customer retention. If your customers can’t develop a connection with your brand, it’s very unlikely that they’ll be motivated to continue purchasing from you. Personalization is a key part of the user experience that helps build a connection between a brand and their target customers. At The Good, we focus on creating personalized, customer-centric user experiences for ecommerce sites. Here are a few proven-tactics we recommend you try on your own:
Customers expect the shopping experience you provide to be the same both online and offline. Few things are more jarring for customers than having a good shopping experience at a brick-and-mortar location, only to find the website confusing, outdated, and clunky.
Don’t expect your retention rate to be high if there is a significant discrepancy between your online and offline experience. Conversion optimization tactics can help ensure that your online shopping experience is just as pleasant as the offline one.
Give your loyal customers a good reason to continue purchasing from you. If you don’t regularly recognize their loyalty, they’ll switch over to a brand that does. Your goal is simply to make your best customers feel like you truly do value them. You want them to know that you’re grateful for their business and provide them with the best possible shopping experience. Here are a few successful tactics we’ve used in the past to improve customer loyalty programs:
e.l.f. Cosmetics has an impressive loyalty program that offers a wide range of benefits for its different member tiers. You earn points for every purchase made on their site, and can utilize those points to gain early access to sales, as well as receive periodic discount codes reserved exclusively for loyalty members. The more points you receive, the more benefits you’re able to utilize. They even offer points for referring a friend to sign-up. This tactic not only increases the brand’s marketing reach but also fosters a sense of community that feels authentic and rewarding.
Customer Service feedback and digital dashboards create a continual feedback loop that serve to improve initiatives that help customers make purchases quickly and easily. With this feedback loop, Brand Managers are able to identify initiatives that create a poor customer experience. As a result, assessing return on investment and allocating marketing dollars become more straightforward.
Conduct testing to determine how your customers use your site. Collect data from analytics, heatmaps, and user testing. Either select and use advanced tools yourself or engage with a conversion optimization partner to help.
With the results of your testing program, identify key trends in how your customers use your site. This data will help inform any changes you may need to make to improve your customer experience. Building a customer-centric website will have a positive impact on your customer loyalty, as well as your conversion rate.
Maximize your existing retention efforts CRO is like steroids for your existing customer retention efforts, creating a virtuous cycle. Customers come to your site and, due to your CRO efforts, convert at a relatively high rate. When they come back to your site, due to email marketing or retargeting, the repeat conversion rate is also relatively high because of the CRO techniques you’ve employed.
In a sense, it’s like compound interest that keeps building on previous investments. CRO boosts both your initial conversion rate and the conversion rate of repeat customers.
Optimizing your site to increase customer loyalty could be one of the most beneficial things you could do for your business, yet it can also be one of the most challenging.
Focus first and foremost on user experience, and trust that it will amplify the effects of all your other marketing efforts. If you want to improve your business’s customer retention, start by taking a good look at your current customer journey and begin testing and optimizing different variations and improvements.
For ecommerce managers looking to optimize their website for a better retention rate, it may be time to consider investing in conversion rate optimization (CRO). Optimizing your website isn’t a guessing game. If you want impactful, long-term results from your optimization efforts, you’ll need to perform extensive testing and research to determine where your customers are getting stuck on your site.
If you’re looking to level up your conversion optimization expertise, The Good recently launched a private online community for just that. The Conversion Growth Lab™ is a place for ecommerce leaders to learn from expert industry practitioners and gain deeper insight into CRO.
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