Marketers, you should stop acquiring new customers.
Yes, that’s right! It might sound counter-productive, but it’s true.
The facts tell us that it’s becoming increasingly important for marketers to focus less on customer acquisition and more on selling to existing customers. After all, attracting a new customer can cost five times as much as retaining an existing customer.
Research conducted by Bain & Company reveals that the likelihood of selling to an existing customer is 60% - 70% whereas converting a lead into a new customer is just 5% - 20%. Advisory firm Gartner also discovered that a 5% boost in customer retention can increase business profits by 25% - 125%.
Customer retention is often more profitable than customer acquisition, which ties in directly with the Pareto Principle (80% of your revenue comes from 20% of your customers). Just as importantly, loyal customers often transform into brand advocates, which has a knock-on effect on your customer acquisition efforts.
How retailers can boost customer retention
The retail industry has shifted dramatically over recent years. With the option for customers to make a purchase online for less money, it’s becoming harder and harder for retailers to maintain any form of customer retention rate.
But the data shows us that customer retention pays dividends, so what retention strategies can retailers use to ensure their customer retention rate improves?
1. Personalize your customer experience in real-time
Personalizing the experience for each of your customers with targeted messaging and offers will result in customers connecting with your brand in a powerful way.
By collecting data from your web and ecommerce sites, customer behavior can be tracked for every session of known and unknown customers, including device, browser, products and pages looked at, along with cart value, page exits and bounces. Using a Customer Data Platform (CDP), marketers can engage at appropriate touchpoints across email and web with perfectly targeted live content, recommendations, messages and cart abandonment emails.
2. Combine your online and offline customer data
Blending your online and offline data into a Single Customer View gives you full control and instant access to all your customer data from one centralized location. You have instant access to your data with the ability to drag and drop it into lists, charts, analysis tools, predictive models and campaign workflows, safe in the knowledge that the data you are working with is clean and trustworthy.
Combining your online and offline customer data is a powerful way of ensuring you have up-to-date, enhanced customer information. In turn this empowers you to lay the foundations that will drive a contextually relevant customer experience and boost your customer retention rate.
3. Focus on your customer loyalty program
A customer loyalty program is a powerful way to drive customer retention and the data they provide can give you deep insights into your customers. Customer loyalty programs boost customer lifetime value, drive repeat purchases and ensure your customers will return for future purchases or to redeem their loyalty points.
Space NK uses BlueVenn to combine their online and offline data to drive the effectiveness of their customer loyalty program. This program encourages customers to leave positive product reviews via social media and, in return, BlueVenn receives these positive reviews and applies points in real-time to the customer’s n.dulge loyalty card. These points can then be redeemed for discounted purchases. This loyalty program is highly effective and ensures a strong customer retention rate and improved customer acquisition due to the positive reviews.
4. Share data within your organization
Sharing customer data throughout your organization can be a powerful customer retention tool. For example, if a customer contacts your complaint center about an issue they are experiencing with your brand, they will be pleasantly surprised to find the customer care adviser they are speaking to has real-time information about their purchases from the sales department. This means they can deal with their complaint quickly and efficiently.
With a CDP this customer information can be shared in real-time around your company, thereby increasing levels of customer retention due to higher rates of customer satisfaction and goodwill towards your brand.
5. Predicting a customer’s next move
The final customer retention strategy is predictive analytics. Predictive analytics are a unique and effective way of improving your customer retention rates as they enable you to find the answers to questions such as:
- Who are your best customers?
- Who is likely to churn?
- How and when will they purchase again?
- What is the most effective campaign for your audience?
With predictive analytics tools you can dive deep into customer behavior, trends and previously hidden buying patterns. This will give you the data you need to drive your real-time marketing, communicate with your customers via a channel that appeals to them and therefore improve your customer retention rate.
Implement your customer retention strategies with BlueVenn
The first step towards creating a truly effective customer retention strategy is to ensure you have unified, consolidated online and offline customer data. BlueVenn is the first and only Customer Data Platform with fully integrated multi-channel campaign management, and it easily blends and merges your data to provide you with a single, accurate view of the customer. With this coveted Single Customer View, you can provide customers with relevant, contextual marketing that creates engagement and boosts retention.
For more information about how the BlueVenn Customer Data Platform can help you boost your retention rate, contact our team today.