Driving new business is a critical aspect of retail, but it’s customer retention that will grow your revenue in a cost-effective way.
You already have information about their purchase habits, and, with that, you can tailor your retention efforts around what you already know.
If you want to build loyal customers for your retail business, there are a few strategies that can increase brand awareness and improve your ROI.
Read on to discover a few examples of these and some tips to help your retail business or ecommerce store see serious results.
Why you need to build loyal customers for retail business
To maximize ROI, your current customers offer the most potential. You’ve already established the relationship—one of the biggest (and most expensive) marketing hurdles. To drive customers back to your store, you need to nurture them.
Customer retention should be a top priority for any retail business. Here’s how it can improve your ROI:
- The likelihood of selling your products to existing customers is 60-70%, while the likelihood of selling to new customers is just 5-20%.
- Your current customers are 50% more likely to try new products you offer and to spend 31% more money than new customers.
- Increasing your customer retention rate by just 5% can increase your profits by 25-95%.
It’s not only less expensive to market to your current customers; it’s good practice to help fortify your brand. Your competitors are always trying to convert your customers, and retail businesses know how important customer acquisition and retention are:
- Customer acquisition is the primary focus of 44% of companies, while only 18% of companies focus on customer retention.
- When it comes to customer acquisition and retention, only 30% of agencies and 40% of companies focus equally on both.
- Customer Lifetime Value (CLV) is an important concept to over 75% of businesses, but only 42% are able to measure it accurately.
By turning your company’s focus towards customer retention, you can see significant improvements in your bottom line. You can also keep your customers from checking out your competitors.
5 ways to build loyal customers for retail business
If you want to build loyal customers for retail business, you need to put together a comprehensive plan that focuses on the customer experience.
1. Referral codes
A healthy referral program has two goals: One is to reward your customers for their loyalty to your brand and the other is to encourage new business.
- Referrals convert 30% better than leads from other marketing channels and they have a 16% higher Customer Lifetime Value (CLV.)
- They have a 37% higher retention rate and are four times more likely to refer other people to your company.
- Referrals from friends and family encourage 77% of consumers to purchase products from companies that are new to them.
When it comes to learning about new brands, 49% of U.S. consumers find out about new companies from their friends and family. Referrals are the top source of brand awareness, and 84% of people trust the recommendations they get from people they know.
If you don’t have a referral program set up already, put together a quick survey and ask your customers what they might like to see in one. A referral program should offer incentive for your customers, at the very least, but including an offer for the new customer can encourage a bigger purchase.
2. Promotions and email coupons
Digital coupons have become common now that most people carry a smartphone. Whether offered in an app or as an email coupon, promotions encourage people to spend more. Digital coupons:
- Build brand awareness: Sixty percent of consumers believe that coupons encourage loyalty in a company and build brand awareness.
- Increase purchase amounts: Seventy-seven percent of consumers will spend $10-$50 more on a single purchase than they planned to if they were using digital coupons.
- Influence purchase decisions: Fifty-nine percent of consumers indicated that digital coupons are the most effective promotion when it comes to influencing their purchasing decisions.
Consumers that can access digital coupons on their smartphones are more likely to purchase from your retail business—over 60% of smartphone owners are likely to use digital coupons on their future purchases.
Email coupons are another way to improve ROI and build customer loyalty for retail business. They can increase open rates by 14%, click rates by 34%, and transaction completion rates by 27%. Incorporating digital coupons and promotions is simple if you use an email automation tool.
3. Personalized content
Whether you’re sending email coupons or using targeted ads, personalized content is especially effective at increasing customer loyalty. Email personalization:
- Improves open rates: When it comes to promotions, personalized emails see a 29% higher open rate.
- Increases click rate: Eighty-two percent of marketers who use email personalization saw an increase in their click rates.
- Encourages customer engagement: Seventy-four percent of marketers saw an improvement in customer engagement with email personalization and targeted messaging.
When it comes to revenue, 58% of it comes from personalized, segmented, and targeted email campaigns, which deliver transactional rates that are six times higher than non-personalized email campaigns.
Personalization can be as simple as including someone’s first name in an email subject line. It can also be as complex and making product recommendations based on their previous purchases or their website behavior.
4. Loyalty programs
Customer loyalty programs have a significant impact on customer experience. They also influence how people engage with your company. A customer loyalty program can:
- Encourage repeat purchases: Half of consumers make purchasing decisions that help them reach a higher tier in customer loyalty programs.
- Increase customer engagement: Sixty-four percent of retail businesses use their customer loyalty programs to connect with consumers.
- Improve customer lifetime value: The average customer will spend 67% more after two to three years than they will in the first six months.
Over 75% of consumers feel that customer loyalty programs are an extension of their relationship with a brand. This means a solid loyalty program can improve customer retention and increase brand awareness.
If you don’t have a customer loyalty program already, consider different ways to approach that to drive customer retention. If you do have one and you’re not seeing the results you want, ask your customers how you can improve it.
5. Social media influencers
Social media is a proliferate form of communication—its use spans virtually all living generations that have the ability to access the internet. Retail businesses can use social media influencers to build loyalty:
- When it comes to trusting recommendations for buying decisions, consumers trust social media influencers 94% more than their own friends and family.
- When it comes to trusting high-profile recommendations, 92% of consumers trust recommendations from influencers over celebrity endorsements and classic advertisements.
- When it comes to trusting all sources for shopping recommendations, 33% of consumers say that they trust social media influencers the most.
Social media influencers that use a company’s product encourage 40% of people to purchase products online from that business. Almost half of consumers rely on social media influencers for product recommendations as well.
The right social media platforms for your retail business depend on a number of factors. Certain age groups prefer Facebook over Instagram, and some industries will thrive on Twitter, where others will see the biggest impact from sites like LinkedIn.
Tips and tricks to build loyal customers for retail business
If you want to see the most success in your customer retention efforts, you need to do more than put together a loyalty program and offer email coupons to your customers. You need to create a comprehensive plan that drives people back to your site or store.
To effectively build loyal customers for retail business, use these tips and tricks to get your brand in front of more customers:
- Personalize emails and offers: Email personalization in promotional emails receive 27% more unique click rates than emails that aren’t personalized.
- Organize a multichannel campaign: With the right tools, you can target your customers through email and social media platforms.
- Use email automation: Retail businesses in the B2C space can optimize their email send day and time, which can result in up to 50% conversion rates.
If you have an ecommerce retail business, you can use marketing automation to increase your customer engagement and improve retention.
Building customer loyalty is a critical step in improving ROI. Using a combination of tactics, you can encourage your customers to keep coming back. To see the best results, remember these key takeaways about customer retention:
- Customer experience is everything. From the rewards you offer in your loyalty program to how you personalize offers, customers appreciate their unique experience.
- Marketing automation is important. Whether you’re automating email coupons around the holidays or sending referral codes after a recent purchase, automation leads to more business.
- Engagement with customers is critical. Your customers want to feel like they have a relationship with your brand, so find ways to encourage engagement.
Putting together a plan to build loyal customers for retail business takes some time and effort, but it’s worth it to improve your ROI and drive new business.
Looking for an email marketing tool for ecommerce retail businesses? CM Commerce makes the most of your ecommerce platform with automated email marketing.