4 Customer Retention Strategies Successful Retail Companies Use

With access to drag-and-drop website builders and the growing popularity of online marketplaces, the retail sector — especially e-commerce — has become more competitive than ever. If you don’t offer fast shipping, a large product selection, and competitive pricing, customers are likely to leave your website in search of other options. What you need is a way to retain these customers. Customer expectations are evolving, so make sure their experience is central to how you run your business. If you haven’t already done so, adopt a customer-focused approach when it comes to retention vs. a product-focused approach.

Use customer retention strategies that aim to identify and solve customer issues and strengthen your relationship with customers. Define the objectives of each of your retention strategies and then track how effective they were at meeting these goals. And invest in your team to develop their customer service skills for better brand-customer communications.

To help you identify your own strategies, here are four options to get you started. Each of these strategies will help you encourage customers to keep buying your products. Let’s take a look.

Why Customer Retention Strategies Matter

Between online ads, email marketing, and other promotional channels, customers are bombarded with product options every day. The best customers are the ones that keep coming back to you regardless of other products available to them. Retained customers have a higher lifetime value (LTV) than new customers because over time, they purchase more.

Customer retention strategies help you:

• Proactively identify which customers are at risk of leaving and what makes them churn. The more you know about your customers, the easier it is for you to make changes to meet their needs.
• Plan how you engage with customers throughout their customer journey. You might find that lots of communication is needed early on in the customer journey and that fewer, more targeted messages sent at regular intervals later on work well to keep customers engaged.
• Lower your customer acquisition costs (CAC). As you make changes to your products and services to meet customer needs, you’ll find that you spend more time nurturing existing customers than running ads and managing marketing campaigns to attract new ones.

As an example, let’s say you sell computers online and in brick-and-mortar stores. A retained customer will come back to you to buy all the accessories they need over time — like a computer bag, external speakers, storage devices, and more. If you notice a drop in sales for one of these items, you can use your retention strategy to figure out what’s causing the drop. Based on what you find, you can make changes to your pricing, promotional messaging, product specs, and more to get customers to buy the product again.

Now let’s look at four retention strategies in action. Each one will help you build trusting relationships so that customers come back and shop again.

1. Regularly Communicate with Customers to Keep Them Engaged

To retain customers, it’s important to have an ongoing relationship with them — this requires sending them regular nurture campaigns to keep them engaged. Plus, regular communication helps to keep your brand and products top of mind. When customers are ready to buy the types of products you sell, yours will be the first one they research.

Before you launch your campaigns, find out more about how to collect phone numbers: 8 Ways to Collect Phone Numbers for Your Rich Media Messaging Campaigns

Some examples of types of SMS and rich media messages (RMM) to send to e-commerce customers to retain them include:

• Purchase confirmation and next steps
• Shipping confirmation and tracking details
• Follow-up to ask about ordering experience
• Follow-up to ask for a review
• Introduction to a referral or loyalty program
• Seasonal offers

These messages can be sent at different points along the customer journey to remind customers to buy something.

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Learn more about the different types of SMS and rich media messages to send customers: 16 Essential SMS Marketing Examples

2. Send Surveys to Learn More About Customer Issues

Not all customers proactively share what bothers them about your brand and products. Often, they stop buying your products and you’re left wondering why. Trying to identify the problem after customers have decided to leave is too late.

One of the best ways to gather feedback and improve customer service is to send surveys via SMS. For example, use our platform to create, send, and analyze surveys that are sent in a rich media format. One of our customers, Express Gifts Ltd, a home shopping service, sends five-question surveys to gather data to learn more about their customer’s preferences. The data from these surveys allows Express Gifts to modify their workflows, create relevant marketing messages, and learn how best to keep customers informed.

Let’s say you have an e-commerce store and your survey uncovers that an overwhelming number of customers are frustrated with your checkout process. This is your cue to review and change the process so that customers are encouraged to come back. To simplify your checkout process, examples of updates to test include:

• Remove or merge steps so that checkout is quicker
• Include a summary of products in the cart
• Offer multiple payment options
• Clearly highlight the cost of shipping

After you make these changes, send the customer satisfaction survey to customers again and ask them to rate their experience. Include a text box for customers to include specific details about what they like and don’t like about the changes. Use this information as a guide for making additional changes or for verifying that what you’ve changed works.

On the flip side, surveys also help you identify what happy customers appreciate about your brand and products. If they like your product selection or email campaigns, this is encouragement to continue doing more of the same thing.

3. Personalize Everything to Build Lasting Relationships

The main reason why customers move from one retailer to another is because they don’t feel valued enough. Nothing about their experience is personalized so it feels as though retailers don’t care to know about their needs. It’s like sending generic messages to customers that all start with “Dear Customer” instead of including each customer’s name. Each of your customers has unique preferences and needs so they expect to be treated as individuals. The better you are at treating customers this way, the better your chances are of retaining more of them.

To retain customers and build relationships, show them that they’re valued throughout their customer journey. Simple personalization tactics include:

• Address customers by name in all your communications — SMS, email, video messages, and phone calls
• Make product recommendations based on past purchases
• Include cart products when abandoned cart SMS and emails are sent
• Send special offers when products that are similar to past purchases are on sale

This approach is also great for products that require repeat purchases. For example, if you sell personal care items, customers can buy these at any store. To get them to come back to your store, send an SMS message explaining that it’s time to restock their product. Include a link to the product page online so customers can complete their purchase with a few taps.

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Proximity marketing is another way to retain customers while personalizing their experience. Use customer location to send them relevant marketing and product messages — based on their past purchases — when they’re close to your brick-and-mortar store.

Learn more about proximity marketing and how it applies to personalization: How to Use Proximity Marketing to Improve Customer Engagement

4. Use Proactive Customer Support

Instead of waiting to hear from customers, proactively reach out to them first. Keep in mind that the only time customers hear from you shouldn’t be when you’re ready to sell them something. Instead, look for ways to share relevant and educational information with them when they need it.

Proactive support is the ability to identify potential issues before they become major concerns. For example, you might notice that the gap between purchases for some customers is becoming longer. This is a potential red flag that these customers might churn. There are underlying issues that are causing this purchase delay and you won’t know what they are, let alone be able to fix them, until customers tell you what’s going on.

Examples of when to use proactive support:

• When a product issue is discovered. Send recall notices and product updates to customers so they hear about the issue from you first.
• Product delays. If you sell products online, let customers know when out of stock items will be available again. Send a reminder once the products are available for sale again.
• Delivery delays. Fast delivery has become a standard expectation for many e-commerce customers. To maintain a positive customer experience, let your customers know in advance if there’ll be a delay.
• Store updates. When new products are added to your store, let customers know. Go one step further and segment your customer list based on purchase history so that customers receive recommendations based on similar products they’ve bought in the past.

The benefit of using SMS to share these types of updates is it feels more personal than customers sending a support email to a general customer service inbox. Encourage interactive two-way SMS communication by asking customers to share their questions and concerns. Customer retention strategies that include tactics like the ones above help you get in front of issues that might have a negative impact on customer experience. Proactive support prepares customers and offers solutions to the issues you’ve identified.

Find out more about how to share delivery updates with customers: Customer Journey Stages: Avoiding Missed Deliveries and Improving CX

Customer Retention Strategies Evolve Over Time

Don’t get so caught up in creating a flashy website, sourcing or creating new products, and other general tasks, that you forget about staying true to what customers need. Remember, the goal is to be customer-focused. Engaged and satisfied customers are most likely to come back and buy from you.

Use mobile messaging to nurture the relationship so customers trust you and are encouraged to keep coming back to make more purchases. To find out more about how we can help support your retention strategy, download our free customer service strategy template.