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8 Customer Retention Strategies to Survive and Thrive in the New Retail Climate

Looking for some actionable advice to help weather the COVID-19 retail storm? Inspired by our recent Tips in Ten series, we’re delving into the topic of customer retention, with eight strategies to help ecommerce merchants build a loyal tribe of satisfied customers during this uncertain time.

Written By
Anna Giles

In the fifth installment of our Tips in Ten YouTube series, our UK Head of Growth, Matt Abbott, joined forces with Fiona Stevens, Head of Marketing at LoyaltyLion, to discuss the short and long-term customer retention strategies that will help ecommerce merchants to survive the COVID-19 retail climate and beyond.

In short, LoyaltyLion is a data-driven loyalty and engagement platform, powering ecommerce growth for merchants around the world. They work alongside merchants across all platforms, including Shopify and Shopify Plus, to help stores make the most of their existing customer base — to drive longer-lasting relationships with more customer lifetime value.

Check out these eight key customer retention takeaways from Matt and Fiona’s Q&A session below. To view the full Tips in Ten video, keep scrolling to the end of this post!

#1 Reach out to your most loyal customers

Now is a crucial time to focus on customer retention. Your first aim should be to reconnect with your most loyal customers — the people that have the highest repeat purchase rates, and the highest average order values — as these shoppers are most likely to convert. This is a valuable segment that you can’t afford to ignore!

There are a variety of strategies you can implement to encourage these customers to continue shopping with your brand; you can provide them exclusive offers, ‘first in the queue’ access to new products and/or sales, and double points promotions within your loyalty scheme. This will make your customers feel special — it’s a fantastic way to keep customers coming back, and reconverting at a low cost.

#2 Surprise and delight at-risk customers

At-risk customers are equally important to consider under the umbrella of customer retention. You should utilise segmentation to highlight those customers that are at risk of churning — those who haven’t made a repeat purchase in a given timeframe.

Once you have identified these customers, surprise and delight them to encourage them to make a purchase. Get creative — you could upgrade these at-risk customers to the next tier in your loyalty program, and/or offer them double point promotions for example.

As their engagement increases, promote repeat visits and conversions by giving them a reason to come back — such as by using points to unlock a new reward, and spend again.

#3 Reward existing customers for leaving reviews

Since return on traditional acquisition activities and ad spend is currently unstable, you should look to develop your online presence by encouraging your existing customer base to leave reviews, and act as brand advocates.

Not only do reviews help to build confidence in your brand by bolstering product descriptions, they have the power to influence buying decisions. The more high-quality, authentic reviews you feature on your store, the higher the chance of converting new customers who are spending more time browsing online during lockdown.

Consider offering loyalty points in return for every review, or perhaps a discount on a future purchase if you’re feeling generous! You could even add bonus points if a customer includes a photo or video alongside their write-up.

Iowa-based fashion brand The Pulse Boutique offer loyalty points in return for reviews. Uploading a selfie earns customers an extra 100 points!

#4 Encourage and reward user-generated content

With more people than ever spending time on social media, now is the perfect opportunity for brands to improve their social engagement, and, in turn, encourage customer loyalty. 

One strategic way of boosting engagement is to encourage your customers to produce user-generated content (UGC) using reward initiatives. For example, you can treat customers whenever they tag your brand in a social post through mentions and hashtags. Reward these customers by giving them bonus points towards your loyalty scheme, or even exclusive discounts for your store. Before you know it, you’ll have a rich base of unique UGC that you can feature on your ecommerce store!

This engagement helps to create a sense of community around your brand too, fostering the sort of strong brand-consumer relationships that underpin customer retention.

#5 Give customers a reason to make referrals

Using your existing customers to help you build your online presence, and acquire new customers, is another effective strategy to employ at this time. It’s a sure-fire way to help drive more traffic to your store —  traffic that’s far more likely to convert! Referred customers tend to have a higher lifetime value, and spend more than people you acquire through alternative means.

You can encourage customers to refer others to your site by offering some sort of incentive, for example, by motivating them with loyalty points. Often, retailers reward the referred customer as well as the referee — not only does this provide a little extra encouragement, but it shows your newly acquired customer that you value them from the get-go!

Make the referral process as simple as possible in order to maximise the likelihood of customers taking part. Assign each customer with a unique referral code that they can share — you can then track this at a later stage to see who your strongest advocates are.

#6 Incentivise account creation

When it comes to inspiring customer retention amongst new customers, one tactic you can use is to incentivise account creation. Why not offer loyalty points in return for them signing up?

Getting first-time shoppers to sign up means you’ll be able to easily keep in touch, as well as gather valuable data from their account. This will enable you to send them relevant content, including tailored offers and personalised points reminders for example.

Shopify Plus retailer 100% Pure uses some of the strategies we’ve talked about so far! Their Purist Perks loyalty program awards points for account creation and for writing a review. 

#7 Implement a tiered loyalty program

When designing and implementing a suitable loyalty program for your brand, you should seriously consider integrating one with tiers. Each time someone moves up a tier, they will unlock a set of exclusive benefits. For instance, this could be a membership to an online VIP Facebook community, or special content. 

The promise of better rewards on higher tiers will motivate customers to add more to their baskets, thereby increasing average order value. It keeps people coming back to your store for repeat purchases as well, boosting their customer lifetime value

Here’s some top tips to keep in mind when implementing a tiered loyalty program:

  • The most effective programs usually have up to four tiers — this offers customers plenty of opportunities to move up a level, without making the top tier seem unattainable.
  • Make sure each tier offers exclusive benefits that aren’t available at lower levels, so that customers really aspire to move up a tier.

Find out more about how to design an aspirational tiered program in our collaborative ebook with LoyaltyLion, ‘The Ultimate Guide to Customer Retention’.

SkinnyDip London have implemented a 4-tier loyalty program using LoyaltyLion.

#8 Use your loyalty program to build a caring community

Research by LoyaltyLion found that nearly 70% of consumers say their loyalty is motivated by the fact that a brand shares their values. As such, a fundamental step in building a caring community around your brand, that people want to be a part of, is to demonstrate that you know your consumers — what they need, and what they value

For starters, modern consumers are averse to brands that put profit over people — so be sure to strengthen and clearly outline your social responsibility policy. Excellently demonstrating this ‘people over profit’ mentality is withSimplicity — a brand who included a DIY hand sanitiser recipe at the end of their loyalty points reminder email — not just pushing their products, but displaying a genuine care for the health and well-being of their customer community.

From here, invest time in developing meaningful authentic relationships with customers. After closing their physical stores, LoyaltyLion user Waterdrop updated their customers on how to shop with them online, provided free shipping, double points for loyalty program members, and even offered an exclusive discount code, STAYATHOME. This highlighted them as on-the-ball, conscientious, and willing to go above and beyond to benefit their customers. 

Maintaining strong communications this way — reminding people of key reasons to shop with you — preserves customers’ confidence and encourages them to keep on shopping with your brand specifically, thereby boosting customer retention.

For more useful customer retention strategies to use on your ecommerce store in this challenging new retail climate, check out our Tips in Ten video with Matt and Fiona:

Stay up to date with our informative Tips in Ten series by subscribing to the Swanky YouTube channel here!

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