How to Increase Customer Retention – eCommerce Strategies

According to Shopify’s State of Commerce Report,  Seventy-three percent of North American shoppers buy from brands they’re familiar with or with which they’ve had some prior business interaction. This is especially important as we approached the Holiday Season.  The additional stress of shopping for so many friends and family in a relatively short shopping window, makes the relationships that you’ve already forged with existing customers a critical part of their decision making process.

But which marketing channels are the most effective to target our most loyal customers?  The answer shouldn’t come as a surprise.

Top five marketing channels for existing customers

  1. Segmented email offers: 80.4%
  2. General email offers: 74.5%
  3. Facebook retargeting for general site visitors: 64.7%
  4. Facebook retargeting for pages or products: 62.7%
  5. Instagram retargeting: 51.0%

Yes, email marketing is still the most effective way to reach out to your existing customers.  Not only is email the channel of choice, but it’s also the top converting source during the holidays.  According to Alicia Thomas at Klaviyo, an email platform that MGR uses for most of our Shopify clients, email segmentation is the key, specifically, focusing on the three main segments:

  • “If I had to choose where a large organization should invest, I’d say that the first and by far most-profitable segment is VIP customers. Set a specific dollar amount or number of times purchased that’s 2–3 times your average and send that group an extra-special discount or offer. Make it exclusive and make it big.
  • “Second, focus on recent openers: subscribers who have opened an email from you in the last 30 days. They’re already engaged so just be clear and blunt about your holiday event.
  • “Third—and maybe I should have said this first—be sure to set up a cart recovery sequence that only includes the exact products somebody has left behind, your Black Friday Cyber Monday offer applied directly to those items, and a sale extended reminder for anybody that still hasn’t completed their purchase by Monday or Tuesday.”

As your physical store or eCommerce store matures, your audience will also grow, not just in size but also in a variety of demographic and segment varieties.  A new customer shouldn’t get the same message as an established customer that is already familiar with your store.  VIP customers should also receive different messages than those customers that only shop at your store once or twice a year.  A male audience should also get different offers and announcements than your female audience.  You get the idea.

When it comes to email marketing, (as with any other marketing channels) numbers and data tell the story.  To increase conversions, you want to have a higher click-through-rate (CTR).  To get the high CTR, you first need an above average Open Rate.  And you guessed it, to increase your Open Rate, you need to send an email that your recipient will feel compelled to read it.  That’s what email segmentation is all about.

Audience Retargeting.

If email marketing is the number one channel for customer retention, retargeting is a close second.  And among retargeting channels, social media platforms (Facebook and Instagram in particular) are the most effective channels.

Most eCommerce solutions, including Shopify, already offer integrations with Facebook and Instagram, in addition to Google Shopping and others available through their App Store.  Creating effective retargeting campaigns with specific target audiences is a “must” when it comes to moving your prospects down in their buying journey.

Again, the Holiday Season is specially critical for this type of campaign due to the same reasons mentioned at the beginning of this article.  Sure, we’re all flooded with a variety of retargeting ads that clutter our browsing experience.  But have you noticed how, when an ad is for a product that we’re really interested in or that we have looked at before, we actually click on it?  That’s the effectiveness of making your ads engaging and relevant to each customer.

Retargeting ads do work.  In fact, the cost-per-click is usually lower and the conversion rate is usually higher.  In other words, you pay less and get more.  Nothing wrong with that.  But it has to be done right.

Just as we used audience segmentation to increase open rates and click-through-rates for our email campaigns, you now need to use the same segmentation strategy for your retargeting campaigns.  And another important point when it comes to retargeting.  The sooner you start retargeting your audience, the better.  It’s better to show your retargeting ads less frequently over a longer period of time, than causing “impression fatigue” by cramming your campaign just a few days before Black Friday.  Nothing more annoying than seeing the same ads popping over and over again as we relax in the evening and browse a variety of news, sports or entertainment websites.

Finally, keep in mind that experimentation is key—you know your customers habits best. Incorporate best practices proven by top performers, then tweak according to your target market.

In sum, as we approach the Holiday Season, these are three areas to focus on:

  • Start early.  Avoid the “rush hour” and capture your customers early in their decision making stages.
  • Seek new customers with pre-holiday PPC advertising that highlights offers and packages that increase your  Average Order Value.
  • Segment your email marketing lists to target existing customers based on their past purchase history and to maximize holiday sales

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Thank you for reading.  Until next time, this is Manuel Gil del Real (MGR)

Sources: Shopify, Amazon, Google Ads, Facebook Marketing