Customer retention: Turning first-timers into long-termers - Fabric Digital

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Customer retention: Turning first-timers into long-termers

29th Jul // 2015

Customer retention

seems to have slipped under the radar of late in the digital hemisphere. All talk over the last two years has been about the development and harnessing of big data, creating mobile friendly experiences, content marketing and user focused design.

All of these important areas of digital are fantastic at finding new customers, engaging them, converting them and understanding them.

However, when it comes to converting a first time buyer into a long term customer, there's not much that any of the above can specifically offer.

Why digital customer retention is important

Whilst doing my rounds online, taking in all the latest news and titbits from marketing experts on their blogs, it's been quite surprising how little recent content has been produced on this specific subject.

But the more you think about it, the more critical it appears retention is. For example, it's a lot cheaper to convert an existing customer than reach out and find a new one – around seven times cheaper in fact.

Shoppers are also now more digital savvy than ever, and so no longer are they stuck with the nearest clothing store when it comes to shopping for example – they have the world of fashion at their fingertips. Customer loyalty online therefore is a lot harder to obtain.

A study by Gartner even suggested that 80% of a brands' future earnings will come from just 20% of its existing customer base.

Whilst that stat shows how important it is for marketing teams to reach out and expand the number of new customers to boost whatever revenue that 80% could be in future sales, optimising those 20% of customers is vital.

In fact, using that 1:4 ratio, getting customer retention wrong and losing just 5% existing clients to competitors can drop revenues by as much as 20% down the line.

So we know customer retention is important, and we know that customers are increasingly moving online for their shopping needs. So how can a digital business improve their returning customer rates and help ensure long-term profits?

Here are some pointers:

Get social with your customers

One of the best ways to create long term customers is to repeatedly push your brand to them in a way that does not inconvenience them. If you annoy your first time buyers, they leave. But if you can subtly showcase how awesome your products are to them, they're more likely to stay and shop again.

Social media is a fantastic way to do this. Entice new users to follow your Facebook page, Instagram account and Pinterest board and you have a potentially unlimited amount of time and scope to market away and

work on converting that first-timer into a long-termer.

Get personal with your customers

You get to work on a Monday morning to be greeted by your typical 200 unread emails. Which ones are you most likely to open? The one titled 'Dear Business Owner' or the one with your name in the subject line?

Personalisation is a key tool to customer retention, as well as getting noticed in the first place. It allows marketers and developers to create experiences that feel tailor made and custom built with a dash of care attached.

When you send marketing messages to existing users, use their name. It's the same when order confirmations and delivery notifications are sent too. It's also nice to include a 'hello [insert customer name]' on the site when a user is logged in as well. Again, it just feels more personal and friendly.

Generate shopping recommendations bespoke to a customer based on their past orders, recommend items they've left in the shopping basket and potentially go even further – how great would it be for example if a customer could pick the colour of the website skin within their profile area?

Create content for your customers

This is a biggy. Content is everything right now in the digital world, and creating engaging content for your customers is a sure-fire way to turn old clicks into new orders.

More than just having a blog, creating rich content in the form of articles, videos, audio and imagery helps not only to boost a brands' identity but also engage with current customers. Again this leans on the thinking behind social media interaction: placing your brand in a non-aggressive way on a consistent basis in-front of potential buyers to generate long-term conversions.

Great content also engages users, and offers something more than a simple buying environment – a real reason to keep coming back for more. One example of this is HMV, who changed its focus from flogging CDS to become  a content-rich news site where users can buy, but first they look to get them engaged.

Make your website a real source for knowledge and entertainment within your niche, and as well as converting your current customers you can also sway potential new visitors to try your products out for size as well.

Show appreciation for your customers

A great way to build brand loyalty is to show appreciation and reward those long-termers.

A simple example of this is the club card system used by most shops where ongoing purchases can be rewarded with enough credits to earn a free shop or money off a future transaction.

One way some brands, with Littlewoods being a good example, can do this is by rewarding top-tier customers with cash back and percentage based rewards where the users' account is credited with a small amount of credit when they make a purchase.

A simpler method is to simply send personalised emails that offer a percentage off a next order. Make the deals even sweeter to existing customers by advertising them as exclusive to loyal shoppers!

Tell your customers you miss them!

A bold and clever last resort is to tell your existing customers who haven't shopped for a while that you miss them!

A company that is great at this is Zavvi, who often send me a 'We miss you Arthur, here's 10% off your next order' mailer that does at very least entice me enough to click onto their website before deciding I don't need the latest Batman DVD.

Penned by Arthur Wilson in UX Design