If you haven’t noticed, customer retention is a pretty big deal. Why? Because unlike customer acquisition, customer retention works to delight and keep hold of your current customers.
Brands that focus on customer retention not only have more loyal customers, but they see a significant growth in revenue. The payoff is massive—increasing retention rates by 5% could help increase your profits upwards of 95%.
But how can you get started? Let’s take a closer look at the importance of retention and what your brand needs to be focused on this holiday season and into 2022.
Why customer retention is so important
Like we said, the goal of customer retention strategies are to keep your current customer base engaged with your brand. The benefits of implementing customer retention strategies are limitless. These efforts:
Boost brand loyalty
Earn more word of mouth referrals
Save on marketing expenses
Improve your products and services through thoughtful feedback
When it comes down to it, loyal customers keep your brand afloat. And when it comes to the holidays, 37% of Americans say that shopping for gifts is the most stressful part of the holiday season. By putting in the extra effort to make their shopping experience easier during this stressful time, they will be more inclined to make repeat purchases.
Take a deeper dive into retention strategies: Access The Ultimate Survival Guide for BFCM and the Holiday Season ebook
How to start improving retention rates today
It’s never too late to get started on your customer retention strategy. And that holds especially true as the holiday season approaches. Whether you already have a strategy in place or you’re starting from scratch, we’ve got you covered with a 5-step process to start improving your retention rates.
Step 1: Understand your customers
First things first, you need to identify your highest converting customers. From there, you’ll need to take a deep dive into who they are: understand their pain points, what they love, and what problems they need solved. You need to know what your customers want before you can before anything else.
Step 2: Get all the data
Without the data, you won’t know where to start or if your efforts are paying off. You will need to gather key performance indicators (KPIs), common return reasons, website analytics, and email data. Get together with your customer support team to have these conversations because they interact with your customers the most.
Not sure which KPIs you should be measuring? Here are 5 you need to know.
Step 3: Personalize and reward
It’s important to reward your loyal customers (they deserve it!). You can do this by implementing loyalty and referral programs, free gifts, personalized discounts, or celebrating their birthday. The key is to show your customers that you appreciate them and in return, they will continue to purchase from your brand.
Step 4: Communicate
The key to any relationship is active communication, and that includes your relationship with your customers. Stay in touch with your customers and let them know of any new products, initiatives, sales, promotions—anything that pertains to them. A few ways to improve communication efforts include:
Sending shipment tracking emails and updates
Utilizing SMS marketing
Regularly updating social media feeds
Implementing branded shipment tracking pages
Step 5: Update your return policy
Lastly, you need to review your return policy. Especially before the craziness of the holidays, take some time to review and update your return policy so there’s no confusion. It doesn’t just help your customers, but your customer support team as well. Less support requests means that they can dedicate more time to the customers that need it.
Looking beyond the holiday season
Customer retention isn’t just important during November and December—it’s vital year round. And with the skyrocketing amount of returns that will happen come January, you need to be prepared to offer a seamless experience. That’s where an automated, smart returns management system comes into play. Learn more about how our exchange-first returns platform can boost your retention rates.