Digital Marketing

How To Improve Customer Retention: Email Strategies For Every Stage & Type of Business

Patrick McCarthy

Why is customer retention important?

As ecommerce website specialists, we know we’re living in a time where acquiring more new business seems to be the solution for growing business. Ecommerce owners are constantly scrambling to attract new customers. They’re coming at a cold audience with hot marketing campaigns designed to target consumers who don’t yet know what they need and convert them into buyers overnight. 

Are we asking for too much? Kind of. We have to understand that most buyers need a warming-up period. Stepping into the shoes of our buyers, we’re all a little bit like toddlers with stranger anxiety. We need to see the same friendly face multiple times before we know we’re in safe company. Similarly, as consumers, we need to trust in the brand, and the offering must have relevant appeal in our lives.

How do you gain that trust from a cold audience? Customer acquisition is a time investment that involves a critically different process than the one used to retain existing customers. In this article, we’re focusing specifically on customer retention.

But let’s stop here for a moment and assess whether customer retention is a relevant concern for your business right now. Shopify experts recommend the following guidelines in dividing your resources between customer acquisition and customer retention.

Brand new business owner (0 sales)

Focus your efforts on acquisition and learn more about customer retention once your sales are consistent. (If this is you, keep reading anyways. Once sales start, you want to be armed with an effective strategy).

Moderate sales (1-5 per week)

Spend about 15% of your resources on customer retention strategies and 85% on customer acquisition.

Consistent sales (at least 1 sale every day)

Devote about 30% of your resources to customer retention, the remainder to acquisition.

Established (10 sales per day)

Evenly split your time and resources between customer retention & customer acquisition.

Fully Rooted (10+ sales per day) 

Customer retention gets slightly more attention now, 60% of your time & resources. Devote the rest to acquiring new customers.

Yesterday’s Sales = Today’s Prospects

In a constantly fluctuating and volatile economy, there’s one thing that online business owners can always rely on: past business. Yesterday's conversions can be today’s new prospects. 

You might have heard that focusing on retaining current customers requires less investment than garnering new business. The right answer is yes and no. The yes part is owed to the fact that you’ve already got their contact details. The no part is the maintenance required to keep them constantly engaged and impressed with your communication and offerings. 

You can think about customer retention like you would your personal relationships. You don’t just get the girl (or guy) and live happily ever after. You must continue reinventing ways to keep that initial interest alive (and that may require more effort than you initially invested).

What Is Customer Retention?

To avoid any confusion, let’s break it down. What exactly is customer retention?

Customer retention is the strategy you employ to garner repeat business and maximise the profit yields of each individual customer. It keeps your existing consumers engaged with your brand and buying your product or service.

What Is A Good Customer Retention Strategy?

Your task is to influence your existing customers to stay with you, rather than buy from the competition. You must continue to deliver top-level value via an excellent customer experience. 

In some cases, your offering may come with a higher price tag than the competition’s, so you have to regularly give your customer reasons to continue to buy from you. Price is an important factor in the buying decision, but we know it’s not always the deal breaker. 

Shopify experts urge us to consider these three underlying metrics of customer retention:

  1. Repeat customer rate: how many customers are returning to your store.
  2. Purchase frequency: how often those customers are buying from you.
  3. Average Order Value (AOV): how much each customer spends in your store.

Customer Retention Email Campaigns

It may come as a surprise that an email retention campaign is critical even in the early stages. So, if you identified your business as having “moderate sales”, you should already be developing an email campaign to retain those few customers. 

To do it right, we want to extend beyond a general email campaign and nail down a specific type of email for different stages of the customer relationship. Below we’ve organised email campaigns into three categories, each of which can be further broken down according to the specific needs of your business.

But first, let’s visit a critical consideration.

What Are You Selling?

Another consideration becomes evident and extremely critical here: the product or service you’re offering. People don’t buy e-bikes as frequently as they buy homemade pickles, for example. So, your retention efforts are highly dependent on what you sell. That identified, even if you sell low-frequency products, like furniture, you likely have up-sell value propositions, such as upholstery cleaners, deodorizers, leather conditioners, or a warranty program.

Customer Lifetime Value (CLV) is also an important metric that clarifies which customers result in a higher profit over time. Not all customers rake in equal revenue, after all. So, you want to focus your efforts on the right customers––those who are going to buy more or higher.

Abandoned Cart Email Series

For established business owners, this may be your primary concern. According to this source, 81% of online shopping carts are abandoned. That’s a lot of potential revenue down the tube! But you can recover it with a 3-day email series designed to re-engage your customers’ attention and interest in the products or services they almost bought.

New Customer Email Series

Treat this first email like it’s going to a brand new customer, someone whose trust you have to win again, just like you did the first time they bought from you. Send a recap of their order immediately to confirm that they made a good buying decision and assuage any fears they may have about delivery. You may also suggest similar relevant products.

Next, send a check-in email a few days later. Ask them for feedback. Offer support and a medium for asking questions. A couple days after their product should have arrived, send another email to confirm receipt, followed by another email a few days later that invites the buyer to review the product. Depending on the nature and structure of your business, subsequent emails may invite them to sign up for a promotion.

eCommerce Email Receipts 

Email receipts have a high open rate because they’re practical and give buyers a sense of security. These two characteristics make email receipts goldmines for customer retention. Attach the customer’s purchase receipt and include an offer that encourages another visit to your store. 

Retain Your Buyer No Matter Your Brand...

Whether you’re new in the ecommerce, migrating to a new platform, or well-entrenched in the online shopping world, customer retention is always important.

As ecommerce website specialists, we’ve witnessed ecommerce owners massively increase their revenue just by developing a strategic email campaign. If you’re down to tackle it independently, we fully encourage your efforts and invite you to continue following our blog for tips.
If you’re looking for specialised support on customer retention in general or developing an effective email strategy, give us a call, we can help.

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