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Ecommerce margins are razor thin, but there is an easy way to increase the value you get from customers and build your business up for the long term. Focusing on repeat customers can help you increase marketing ROI, ensure cash flow throughout the year, and raise your brand’s reputation.

In this blog we’re looking at the difference between customer retention and recruitment, how to get more repeat customers, and how to maximize their value.

Repeat customers versus new recruits

The marketing math here is very simple:

It’s cheaper to retain an old customer than recruit a new one.
And increasing your customer retention rate by just 5% can increase your profits by a minimum of 25%, according to research from Bain & Company. Repeat customers tend to spend more over a longer period of time, which helps your long-term profitability too.

But why? What makes repeat customers so valuable? There are several factors in play:

  • It’s easier to sell to repeat customers. You already know that they’re your target audience. You know how to contact them, and you can even use their purchase history to help guide your messaging.
  • Repeat customers buy more, especially at peak times. While major shopping events like Christmas are a good time to reach new people, your repeat customers also have a significant role to play.
  • Repeat customers become brand ambassadors. They keep choosing your brand over others. That means they’re well-placed to write reviews, post on social media, and recommend your products or services to their friends.

All of those factors add value to your business. Let’s talk about how to maximize that value through customer retention strategies and encouraging them to recommend your brand.

How to get more repeat customers

Think about your own experiences as a consumer. What makes you keep buying from a brand?

It’s not just about providing good products and services – although that definitely matters. It’s also about creating an amazing customer experience and giving people extra reasons to return.

Things like…

  • A transparent, efficient delivery service.
  • Building a community around your brand.
  • Offering educational and entertaining content. 
  • Rewarding customers with limited discounts or free gifts.
  • Keeping customers engaged throughout the year.
  • Reflecting and responding to your customers.

Let’s look at those points in more detail.

Delivery service

When customers buy online, they don’t get the immediate gratification of shopping in store. They hand over their money and… well, in the past, they used to just hope for the best.

You can and should provide a better customer experience. That means regular updates on the progress of an order, delivery notifications, and a customer service helpline that’s easy to reach. As well as making it easy for people to shop with you, you should also use the check-out experience to build trust.

Building a brand community

One of the most powerful motivators you can offer people is a chance to belong. To be part of something exclusive. To be an insider. 

That’s kind of the idea behind a brand community. Instead of shopping in isolation, you can build links between your customers. Things like Facebook groups, online events and brand blogs or magazines are all ways to create a sense of partnership and belonging. 

Offering amazing content

Content is everything. It’s the product descriptions on your website. It’s the email newsletter you send out every week. It’s the how-to video you post on social media. It’s the conversation you start in the comment section.

You can use content to keep customers interested, teach them more about your brand and strengthen your brand community. Content can be a hard sell within a business, because you won’t see the results immediately. But over time, a strong content strategy could be vital in encouraging repeat customers.

Rewarding customers

Rewarding your customers is a fine art. Too much, and they won’t bother paying for any more products. Too little, and they might feel under-appreciated.

The trick is to find creative ways to reward your customers. Discounts and coupons are great – but what about rewarding them with exclusive content, early access to new products or even a quick branded mini-game. Content and community can be rewards in themselves.

Keeping customers engaged

If someone buys one of your products on an impulse…

or just picks something out as a gift…

or buys your products as part of a major seasonal sale…

can they still become a repeat customer?

The answer is yes, but you’re going to have to work for it.

Reflecting your audience

This final point is going to be a big deal in 2021 – you heard it here first! Brands are learning to let customers take the lead. That means things like:

  • consulting your customers about new products.
  • sharing user-generated content.
  • making your brand values visible.

So, to sum up: if you’re giving customers a great experience and building a community that’s buy and for them, your customer retention rates should be looking pretty healthy.

Now for your next challenge: maximizing the value of all those repeat customers.

How to maximize the value of repeat customers

As we’ve discussed, repeat customers aren’t just important because they spend more. They represent a huge opportunity for your business, because they’re highly likely to recruit other customers. If they recommend your products to someone else – that’s free advertising!

You should encourage repeat customers to talk about your brand as much as possible. Let’s consider a few ways to do it.

Word-of-mouth marketing

It might seem strange, given how much effort and creativity we put into marketing plans and advertising spots and content creation. But the most effective, timeless tool in every marketer’s kit is… customer recommendations.

As a general rule, people trust people more than they trust brands. If a friend or a family member tells you they just discovered a great company, that recommendation will carry more weight than if you see an ad by the same company. 

Here’s the tricky part: how do you encourage people to talk about your brand?

This is one area where I don’t recommend offering incentives. Word-of-mouth marketing should be natural, spontaneous and unscripted. So instead of encouraging it explicitly, you should focus on giving customers plenty to talk about!

Make great products. Go the extra mile with customer service. Share exciting content that starts conversations. In other words, create an experience that your customers are just desperate to talk about.

Social proof

Social proof has a similar effect to word-of-mouth marketing, but it works a little differently.

Instead of telling people about your brand, your customers show that they love your brand – by posting photos and videos of themselves using your products or services online.

This is one area where you absolutely can and should encourage customers to post. But, again, there are lots of different ways to reward social proof. For example, you could:

  • reshare posts about your products on social media.
  • comment and like posts about your products on social media. 
  • set up a dedicated gallery or Stories highlight to save customers’ posts about your products.
  • run a prize draw for people who post about your brand each month. 
  • send some brand merch to people who regularly post about your brand, or post about your brand and get a lot of attention.

All these responses have two effects. Firstly, they amplify the reach of the original posts, so that the social proof has even more of an impact. Secondly, they reward customers for posting social proof – and encourage them to keep doing it.

Online reviews

Online reviews can make or break a business. And there are more and more places to post them: on your website, on social media, and on a long list of sites like Yelp and Tripadvisor.

Happy customers can bring a lot of extra value to your business by writing positive reviews. And in some cases, even if they don’t write a 2,000 word essay about how much they love your products, simply adding to the number of online reviews of your brand can help improve credibility and brand awareness.

You can encourage people to write reviews – but, obviously, you can’t insist on those being positive reviews. So, as with word-of-mouth marketing, your best strategy is to create an amazing customer experience.

And you can offer rewards for customers who write reviews, regardless of tone. Again, try to be creative with rewards, offering discounts, reward points, exclusive content or early access to new product releases.

Conclusion

Hopefully, this post has given you quite a few ideas for retaining customers and encouraging them to promote your brand. By focusing on great quality content and customer service, you’ll create a community of happy customers who love to talk about your products and services. And your business will enjoy the benefits.

About the author: Corinna Keefe is a freelance writer specialising in tech, marketing and social media engagement. She works with brands all over the world, including Easypromos (mentioned in this article).