Undoubtedly, the Business’s success depends on acquiring customers and maintaining them for a longer time. Still, the entrepreneurs are more likely to concentrate on their acquisition rather than on retention rates. Today, in this article, I want to spread awareness about why the businesses need to focus on their e-commerce customer retention efforts.
But before going towards the reasons why the customer retention matters a lot in comparison to acquisition or other, let’s have a look on brief info regarding customer retention.
What is Customer Retention Rate?
CRR is a business metric that calculates the percentage of your customers who return and make purchases. Being a crucial assessment of your company’s customer service and product quality, retention facilitates you with the ability to differentiate the firm from your competitors. It is a process to be aware of the truth whether the marketing efforts you are making are fortifying your business or bleeding dollars.
Maintaining a good customer retention rate can be the best way to assure a successful future and to prevent a sudden downfall of your business.
Why E-Commerce Customer Retention Rate Matters?
After making numerous researches on the factors that affect customer retention and consumer behavior, we come to know that customer retention is really very beneficial. Just a 5 % boost in this rate has the power to improve your business profits from near about 25 to 95 percent. The gathered data indicates that retaining current customers rather than seeking out the new ones is more cost efficient.
Now, coming back to the point, let’s go through some traits that display the importance of customer retention in your life as of an entrepreneur.
Lifetime Value: Attaining a higher retention rate will allow you to put your business in a fantastic position in order to achieve the lifetime value of every customer.
In the marketing field, lifetime value (LTV) or customer lifetime value (CLTV) is an estimation of the exact profits attributed to the whole future relations with a customer.
Increase Revenue: As per marketing experts, near about 80% of the future revenue for businesses will come from only 20% of the existing customers. This is because such customers are easier to vend to. Moreover, the possibilities of converting the customers to purchase again are approximately 60-70 % whereas the probabilities of making the new ones to buy are just 5 - 20 %.
Thus, improving your customer retention will facilitate your company with the potential to generate an increased amount of revenue.
Brand advocates: Truly retained customer will act as the influential advertising agent on behalf of your company. As the people trust their friends & family more than you, so, promoting your business’s products and services with help of these benefiting agents will prove beneficial.
Decrease Costs: Cost is one of the most important ingredients that you as a business owner must consider while determining your customer retention plans. A major portion of costs is associated with acquiring & keeping the customers. Customer services are as easier to provide as to say. Using intuitive UI, strong reporting features, effective integrations and automation, it is easy to convert your customer services in a manner that ensure the competitive advantage for you.
Improve Marketing: The retention efforts you make not just generate a better amount of revenue that can direct at your acquisition doings but can also provide a lot of insights to enhance your marketing acts to achieve new customers.
At the marketing stage, content is estimated as the king. Therefore, the important question about marketing efforts is ‘which customers you should target with the content?’ The simple answer is your existing customers. This is to create a good customer base for your company.
By identifying your retained customers and realizing what makes them happy, it is easier to target prospects that suit their characteristics. It is estimated that acquiring new customers having the same characteristics matching to your current customers will result in achieving higher retention rates in the future.
Enhance Onboarding Process:
In today’s competitive world, in order to keep the customers for the long time or likely to convert them into effective agents, business leaders look for tactics that ensure the customer satisfaction. The onboarding process is the best way to accomplish the task of ensuring that the customers are satisfied with the products they have purchased from you.
The onboarding process is a method in which the new customers attain the skills and knowledge to optimize the product they receive from your side. By diagnosing the data related to your existing customers, it is easy to understand ‘why the customers get churned at the time of onboarding process?’. This, in turn, helps you in improving your onboarding process for the recently acquired customers.
Two good strategies to aid you in improving your onboarding process are as follows:
Provide the new customers with a tutorial about how to get the most out of their newly purchased product
Detect and remove obstacles where the customers can be stuck at the time of onboarding
Conclusion: Existing customers prove to be an excellent source that can provide your business with successful outcomes by making repeated purchases as well as acquiring new customers. Moreover, retained customers cost really less to being supported and maintained in comparison to the new ones. Additionally, the existing customers play a significant role in improving your marketing efforts along with providing excellent ideas to enhance the onboarding process. So, focus on making efforts to increase your customer retention rate as it really matters a lot in ensuring the success of your e-commerce business. In addition to this, you can also go for effective ORM Services for achieving maximum customer retention rate that assures successful results for your business.