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Every business wants new <a href="https://www.afterpay.com/en-US/for-retailers/access/operations/customer-service-examples" rel="noopener noreferrer" target="_blank">customers</a> in the door to boost sales and grow the bottom line. But what about those customers that have already come through and made a purchase? Are they the key to unlocking long-term business growth?Studies by <a href="https://hbswk.hbs.edu/archive/the-economics-of-e-loyalty" rel="noopener noreferrer" target="_blank">Bain &amp; Company</a>, working with Earl Sasser of the Harvard Business School, show that increasing customer retention rates by 5% increases profits by 25% to 95%.1&nbsp;To help you take care of your existing <a href="https://www.afterpay.com/en-US/for-retailers/access/customer-service/customer-centricity" rel="noopener noreferrer" target="_blank">customers</a> and get them coming back for more, here are four ideas worth exploring.

<h3>Treat your loyals like royals</h3>One way you can increase in-store sales is by introducing a loyalty program that offers rewards, discounts or other incentives to customers who shop in-store. They’re a great way to recognise loyal customers and can be highly effective at encouraging them to keep shopping with you. <a href="https://www.semrush.com/blog/customer-retention-stats/" rel="noopener noreferrer" target="_blank">83% of people</a>2 say joining a loyalty program will keep them shopping at that business.&nbsp;There are typically four categories: points, paid programs, social media and tiers. You can offer anything from free shipping to exclusive discounts and early access to new products.&nbsp;According to research by global consulting firm KPMG, <a href="https://home.kpmg/xx/en/home/insights/2019/11/customer-loyalty-survey.html" rel="noopener noreferrer" target="_blank">81% of Millennials3 </a>say that being a member of a loyalty program encourages them to spend more with the company. Given how effective it can be at driving sales, it could be a cost-effective way for you to say “thanks'' to your most valuable shoppers and build long-term trust so you get repeat business.

<h3>Tap into your POS system</h3>A good point-of-sale (POS) system is more than just checkout software. It can provide&nbsp; valuable data on your inventory and insights into your customers, which you can use to your advantage.Knowing what your customers like to purchase can help inform your marketing plan, and tailor customer experiences and build relationships. It can also help you identify repeat customers, which you can target with special offers.&nbsp;From an inventory perspective, your POS system can help you identify your most popular items so you can feature them in your store. It will give you insights on seasonal trends, which can help you plan your displays and sales.&nbsp;It can also help you deliver better customer service by knowing exactly what stock you have in-store. And when you consider that <a href="https://blog.hubspot.com/service/customer-service-stats" rel="noopener noreferrer" target="_blank">93% of customers</a>4 are likely to make repeat purchases with companies who offer excellent customer service, it pays to prioritise a good customer experienceIf you implement a loyalty program, you can use the POS data to segment your customers and provide personalized rewards and offers based on their past shopping behaviour.

<h3>Offer digital receipts</h3>A great way to get contact details on your customers is by offering digital receipts. It’s not only convenient for them—it’s so much easier finding an email than a small piece of paper—but it also lets you capture valuable information about their shopping preferences and gives you their email address and/or mobile number, which you can use to market to them later.Knowing which products and offers appeal to a particular customer means you can create more personalized experiences and target them with relevant information, deals and updates.&nbsp;There is also an opportunity to cross-sell to them when you email the receipt. Use that real estate to promote other deals or experiences that could trigger a repeat purchase.&nbsp;And if you have a loyalty program, the data you captured here means you could add them to your program and start building a long-term relationship.

<h3>Good returns deliver greater returns</h3>Allowing your instore and online customers to easily return their items to you instore not only creates a great customer experience, but it gives you the opportunity to upsell.Letting your online customers return items in-store can also significantly cut down processing and handling time for you, and it means you could resell the product at full price.&nbsp;According to <a href="https://www.incisiv.com/report-2021-state-of-the-industry-retail-returns#download-ebook" rel="noopener noreferrer" target="_blank">research by Incisiv</a>,5 shoppers expect fast, free and easy returns and 95% of those surveyed said a poor returns experience will make them less likely to shop from a brand again. Conversely, customers who find it easy to do returns with you are more likely to shop from you—making larger and more frequent purchases.&nbsp;The best way to tackle returns is to keep them hassle-free for your customers, and easy and straightforward for your staff to process. Try to reduce the friction as much as possible to deliver a positive customer experience. Done right, returns can increase the lifetime value of a customer.&nbsp;Retaining customers should be front and centre of your plan for long-term growth. Customer retention <a href="https://hbr.org/2014/10/the-value-of-keeping-the-right-customers#:~:text=Depending%20on%20which%20study%20you,the%20one%20you%20have%20happy." rel="noopener noreferrer" target="_blank">costs 5 – 25 times</a>6 less than customer acquisition, so it pays to have a strategy in place that takes care of your most valuable customers and ensures you embrace customer loyalty as a top priority.

Source:<ol><li>The Economics of E-Loyalty, Harvard Business Review, July 2000.</li><li>70 Powerful Customer Retention Statistics You Need to Know in 2021, Semrush, 16 April 2021.</li><li>The truth about customer loyalty, KPMG.</li><li>40 Customer Service Stats to Know in 2022, Hubspot, 27 June 2022.</li><li>2021 State of the Industry Report, Retail Returns, Incisiv, Q2 2021.&nbsp;</li><li>The Value of Keeping the Right Customers, October 2014.</li></ol>

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To help you take care of your existing customers and get them coming back for more, here are four ideas worth exploring.

Unlocking the value of long-term customers

Unlocking the value of long-term customers US

These days, to build long-term relationships with your customers, you need to
 do more than just add their first name in an email. Customers expect a
 personalized experience from the brands they buy from. Research conducted by
 <a
 href="https://www.mckinsey.com/business-functions/growth-marketing-and-sales/our-insights/the-value-of-getting-personalization-right-or-wrong-is-multiplying"
 target="_blank"
 >McKinsey</a
 >1 confirms
 this. It showed that 71% of customers expect personalisation and 76% get
 frustrated when they don’t find it!


 There’s big money to be made when you get it right. The same report showed
 that brands that go beyond ‘know me’ and can demonstrate ‘understand me’
 generate 40%1
 more revenue than those that don’t.


 With access to so much data, and the platforms and channels to connect with customers, how can you introduce it in your business to good effect?

<h3>Start by collecting customer data</h3>

 Customers are drawn to companies that make them feel like their interests and
 preferences are not only being considered but are understood. They appreciate
 the personal recommendations, offers and content that resonates with their
 needs and wants. It makes them feel valued. And that’s the key to creating a
 loyal customer.


 Whether you operate an online store or bricks-and-mortar shopfront (or both),
 you’re collecting data on your customers every time they interact with you.
 The more information you collect, the richer each customer story becomes. And
 that gives you more to work with.


 Over time, you’ll start to build up a library of intel on your customers’
 shopping behaviours, preferences, preferred times to shop, channels they
 engage with, and so on. This data is gold. You can leverage it to build
 tailored offers and experiences for your customers that are based on their
 individual preferences and shopping history.


 There are plenty of sources for capturing your customers’ data—transaction
 records, surveys, competitions, activity on your website and socials,
 subscriptions, inbound and outbound calls, in store conversations—the list is
 massive.


 The real challenge is not how to capture the data, but how to access it so you
 can use it. That’s where a customer data platform can help. It pulls data from
 different sources, like your website, socials, and POS system, into a
 centralized database and creates detailed profiles for each customer.


 Platforms like Insider, Klaviyo, Microsoft Dynamics 365 Customer Insights, SAP
 Emarsys HubSpot and Optimove can take care of this for you. They each offer
 different services depending on what you need and your budget.

<h3>How to make it personal</h3>

 Once you have the insights on your customers, you can start to make personal
 recommendations that are tied to their individual profile. They’ll love you
 for suggesting something that is relevant to them.
 <a
 href="https://www.mckinsey.com/business-functions/growth-marketing-and-sales/our-insights/the-value-of-getting-personalization-right-or-wrong-is-multiplying"
 rel="noopener noreferrer"
 target="_blank"
 >78%</a
 >1 of customers said personalized content made them more likely to repurchase. Here are a few examples of how you can do personalization in your business

<h3>Use an upsell feature </h3>
Amazon’s ‘Frequently bought together’ is an automatic upsell feature that’s based on the browsing and purchasing behaviours of its customers. It’s designed to get customers to add more items to their order. And it works.
Imagine you’re searching for a new TV on Amazon. You find the one you want and add it to your cart. When you do, immediately below your chosen item will be a range of related items that other customers bought, such as a wall mount bracket, DVDs, HDMI cables and so on. Showing these related items others bought not only acts as a form of social proof, giving customers added confidence to buy, but it can increase order size. 
While most businesses don’t have access to the algorithms and AI technology that Amazon has, it does offer you a clue on how you can market to your customers. 
Knowing what your customers are buying and then sharing that information with other customers who have a similar profile, through emails or on your product pages, can help you drive more sales and repeat purchases.
Apps like ReConvert Upsell & Cross and Frequently Bought Together can help you deliver a more personalized experience and increase your conversion rates.

<h3>Create a personalised web experience </h3>

 Using cookies on your site means you can save your customers’ preferences. Next time they visit your online store, you can serve up relevant offers, products or services that are based on their previous interests and behaviours. So, rather than them landing on your generic home page and navigating to where they want to go, you can take them straight there. That means a better shopping experience for them and potentially higher sales for you.


 Ecommerce personalization tools you can use include HubSpot, Google Optimize, Adobe Target, Personyze and Klaviyo. There are literally hundreds to choose from, so you should have no trouble finding one that meets your needs and budget.

<h3>Show recently viewed items</h3>

 As a customer browses through your online store and clicks on items they like, you can capture this information and display it both in real time and next time they return to your store. Not only does this make it easier for your customers to find those items again, but it acts as a reminder that could prompt them to make a purchase.

<h3>Make it personal in your emails</h3>One of the easiest ways to do personalization is through your <a href="https://www.afterpay.com/en-US/for-retailers/access/marketing/what-is" rel="noopener noreferrer" target="_blank">emails</a>. Simple things like including their first name in the subject line is a great way to make the email feel more personal.Celebrating milestones with your customers, like their birthday or an anniversary of when they signed up with you, is another effective way to make a personal connection. Consider sending them a special offer or incentive to mark the occasion, like 10% off a haircut on their birthday or free shipping to celebrate an anniversary.Creating personalized experiences for your customers, based on their preferences and behaviours, is a great way to build trust in your brand, drive repeat purchases and foster loyalty.

Source: 
 <ol>
 <li>The value of getting personalization right—or wrong—is multiplying, McKinsey & Company, 12 November 2021. </li>
 </ol>

With access to so much data, and the platforms and channels to connect with customers, how can you introduce it in your business to good effect?

How to use personalisation to drive loyalty

How to use personalisation to drive loyalty NA

Cart abandonment is a constant bugbear for any online retailer, and for good
 reason.
 <a
 href="https://www.salesforce.com/resources/research-reports/shopping-index/"
 target="_blank"
 >Salesforce’s Shopping Index</a
 >1 (which
 captures insights from over 1 billion shoppers across 61 countries) revealed
 that the cart abandonment rate for Q1 2022 in the US was 75% for desktops and
 85% for mobile. That’s a lot of missed opportunities!


 Getting the checkout experience right is one of the best ways you can see your
 customers complete their purchase and, hopefully, return at a future date to
 do it all over again. It all starts with creating a frictionless process that
 avoids unnecessary steps and form fields so customers can make a B-line to the
 checkout.

<h2>Creating the path of least resistance</h2>
1 Pre-populate fields with customer details

 Make it easy for your existing customers to do repeat purchases with you by pre-populating their shipping and billing information. Give them the option to checkout by signing into their account, where all their information is securely stored. Doing this will result in a faster checkout and give them fewer fields to complete, so there is less risk of them walking away too early. 
 <a
 href="https://www.afterpay.com/en-AU/express-checkout"
 rel="noopener noreferrer"
 target="_blank"
 >Afterpay’s Express Checkout </a
 >can do this for you and it’s super easy to set it up.

2 - Remove unnecessary fields

 When it comes to converting a sale online, you want to minimise distractions and reduce friction so a customer can get through the checkout as quickly as possible. Make sure you’re only capturing data that you need to fulfil the order. Don’t be tempted to ask marketing questions or add in ‘nice-to-have’ fields. Save these for follow-up emails.


 By reducing the number of fields they need to complete, you can increase the likelihood of them making a purchase.

3 - Create targeted cart abandonment emails

 There are so many reasons why customers fill their carts only to abandon them.
 But sometimes it’s because they’re called away from what they were doing.
 Their intention always was to checkout; they just didn’t quite get there.


 For these customers, a follow-up reminder email can be just what they need to
 return to your store and complete their transaction. And it’s a good idea to
 sweeten the deal by offering them something extra like a discount, coupon code
 or free shipping. But you need to act quickly. The longer you leave it, the
 less likely they are to return.

Here are some examples of cart abandonment emails that you can use.

4 - Add a cart abandonment pop-up When displayed at the right time, an abandoned cart pop-up can be highly effective. They can help overcome common shopper objections and nudge them back on track to finishing what they started.A great way to encourage them to checkout is to offer a discount or free shipping. But only for a limited time. You need to create that sense of urgency to compel them to take action straight away.You could also consider adding a pop-up that captures their <a href="https://www.afterpay.com/en-US/for-retailers/access/marketing/what-is" rel="noopener noreferrer" target="_blank">email</a> address in return for a coupon code that they can use next time they return to your online store. With this email on hand, you can market to them later.

5 - Retarget via social media

 Retargeted display and search ads can be a powerful way to bring back your abandoned-cart shoppers. They work like a reminder that pops up whenever your shopper visits certain sites. For example, a Facebook ad that says: “Return to your cart and take 20% off” or shows images of items that are in their cart.


 Retargeting ads are typically more effective than regular display ads because you’re speaking to shoppers who have already shown an interest in your products. And if you link the ad directly to their abandoned cart, you can increase your chance of them checking out.

6 - Offer a guest checkout 

 Customers are often time poor, so you don’t want to slow things down by
 forcing them to register and validate an account before they can checkout. And
 let’s face it, not everyone wants to, even if time isn’t an issue.


 Offering a guest checkout lets them get what they need when they’re ready to buy without the hassle of signing up. This is particularly important for first-time buyers, who may not be loyal to your brand or familiar with your checkout process. 


 If you’re worried about them not signing up, you can always ask them if they’d like you to save their details for future purchases. And if you’ve captured their email address as part of the guest sign up, you can send them communications encouraging them to sign up. Once again, offering an incentive to do so, like a discount coupon, might be all they need to become a regular customer.

Source: 
 <ol>
 <li>The Shopping Index: Global online shopping statistics and ecommerce growth trends, Salesforce, Q2 2022.</li>
 </ol>

Six ideas for reducing cart abandonment

Six ideas for reducing cart abandonment  NA

Emphasized Text

Forget slashing prices. Discover alternative ways to boost customer loyalty and retention.

Long gone are the days when loyalty programs and discounts were the only way to boost customer retention rates.Today, businesses can choose from a myriad of options – from events, personalized emails, VIP clubs and even fractional shares – to increase loyalty and create superfans.The following are some leading examples employed by Afterpay merchants around the world…&nbsp;<h2>1. How fashion retailer Review created a secret VIP club&nbsp;</h2>Offering a loyalty program has become a popular way to build brand love, and fashion retailer Review has long had a program, which is available to all customers and offers perks and even a dedicated loyalty app.Browse through the retailer’s website, however, and you won’t find any mention of its other loyalty program - The Dress Circle - which is only available to a select group of VIPs.&nbsp;“Our Dress Circle [program] is unspoken,” says Anna Samkova, head of loyalty and digital marketing at PAS Group, which owns Review. “You won’t find any reference to it our website.”The program came about after Samkova asked the marketing team to identify Review’s highest spenders. “I wanted to know how much our highest spenders actually spend - and how many we had - because we didn’t know at the time.”The team quickly discovered that there was a cohort of around 450 shoppers who each spent between $5,000 and $20,000 a year. “We thought, ‘Wouldn’t it be a good idea to acknowledge them and do something special for them?’” says Samkova.But in creating The Dress Circle, which offers discounts, perks and previews, Samkova made an unexpected discovery. It wasn’t the discounts that Review’s top spenders valued most.

Article Quote

"They just wanted to be acknowledged and thanked for shopping with the brand.”

“Nine out of 10 of them came back to us and said, ‘You’re really generous with your discounts, we don’t want more. We really just appreciate you acknowledging the fact that we are your valuable customers. That was it. It was as simple as that,” says Samkova, who adds, “Sometimes we think we should give [customers] more [discounts] but they really just wanted to be acknowledged and thanked for shopping with the brand.”The Dress Circle, which requires customers to spend $5000 each year to retain membership, has been a successful initiative for the brand. Members of the VIP club routinely spend more, and the program has grown from 400 customers to 1400. Today, the Dress Circle accounts for 11 percent of the brand’s revenue, despite representing just three percent of customers.<h2>2. How Wolf &amp; Badger uses events to encourage customer retention</h2>In just over a decade, independent design marketplace Wolf &amp; Badger has grown from a small boutique in Notting Hill, London, to a global chain with stores in London and New York, and an LA outpost due to open soon.The retailer credits its success to creating a true sense of community. This is achieved by designing stores that are created to be places in which to linger - with juice bars, stationery concessions and, in London, even a restaurant - and through an events program.

“Bringing to life the soul of our designers is really powerful."

“Bringing to life the soul of our designers is really powerful,” says Wolf &amp; Badger’s head of growth David Walby, who adds that it’s a priority to create a sense of connection among customers, designers and staff. “We offer pop-up spaces for designers where they can show off their work in fabulous surroundings. Our events are highly personable, lots of fun and sculpted around what customers find engaging, informative, valuable and entertaining.”Wolf &amp; Badger gives designers the freedom to host the type of event they choose. “We’ve seen everything from lampshade-making workshops to wreath-making sessions, to sip-and-shop events around new collections.”The brand measures the success of events in the form of customer feedback, designer feedback, social shares and designer sales from shopping events. “Relevancy wins in this world, so customers’ experiences sits at the core [of this].”<h2>3.How Shhh Silk surprises and delights its customers</h2>Few people expect to receive flowers or chocolate from their favorite brand, but silk bedding brand Shhh Silk has been known to send this – and more - to its top customers. And it’s an approach that pays off.“At the end of January, we sent flowers to our most loyal customers [with a note saying] ‘Hey we just wanted to let you know that you’re currently one of our most loyal customers’” says founder Olivia Carr.She describes her approach as ‘random acts of kindness’ and the brand aims to do it regularly, with the intention of creating brand love that “goes beyond loyalty”. The key to success says Carr is an organic and customer-centric ethos.“We don’t sit down and say, ‘OK who are we going to surprise this month?’ We might see that one of our customers – and we follow a lot of them [on social media] - is having a bad time or maybe it’s their birthday and we will send something, whether it’s a gift card [or product]."&nbsp;It’s an approach that isn’t reserved for top spenders, either. Recently Carr realized that rising gas prices were a challenge for many of her customers, so she ran a social media competition for $300 in gas gift cards.

"Loyal customers can’t help but be powerhouse advocates for your brand."

<h2>4.How St Tropez uses regular communication to build loyalty</h2>Self-tanning brand St. Tropez launched in the U.S. in 1992, and soon became market leader. Part of this success – along with the strength of their products – comes down to regular communication with customers, says Tessa Taylor, St. Tropez’s acting global head of brand.&nbsp;This communication starts with replying to every correspondence received from customers or potential customers. Taylor explains, “We reply to every comment, email and direct message across all channels and welcome all feedback, positive or negative. We keep customer feedback in mind to help shape future brand plans, ensuring that people are at the core of what we deliver. The fact that our customers feel heard and respected is of utmost importance to us and definitely drives that customer loyalty.”

“We reply to every comment, email and direct message."

The tanning brand, which has 185,000 followers, uses different social media channels in different ways. “We have a close-knit Facebook group where we share exclusive content, quizzes and polls with brand enthusiasts, and members share their tanning tips and thoughts on their favourite glow," says Taylor.“On Instagram, we often share question boxes and polls, giving customers the opportunity to provide honest feedback. This creates a sense of community where customers feel a part of something, helping them feel connected to the brand on a deeper level and therefore creating brand loyalty.”St Tropez also emails customers regularly, sharing exclusive offers and tanning tips. “These emails re-connect customers to the brand and engage them so they continue to come back,” she concludes.<h2>How Hey Bud Skincare created a Facebook Group to drive retention&nbsp;</h2>Since launching in 2019, hemp skincare Hey Bud has built a loyal following of Gen Z fans.Today, the brand boasts a customer retention rate of 25 per cent, thanks to the efficacy of its products and a focus on building and listening to its community.Alex Roslaniec, who founded the brand with Fedele D'Amico and Ollie Watts, explains that Hey Bud launched a VIP Facebook group early on. There, customers can share tips, pre-order new products and share feedback.“We rigorously listen to our customers and take on board all feedback,” she explains. “For example, we have reformulated products, changed the messaging of our brand, and launched the most requested products – all of which led to a higher retention.”“We believe in reaching out and closely listening to our customers,” she says. “Over time this has led to higher retention. With our emails and comms, we don’t try to sell to our customers straight away, instead we educate, entertain, build a community first and we find people naturally want to buy anyway.”<h2>Want more inspiration?</h2>Discover the creative ways in which some of the world’s biggest brands drive customer retention.Ulta Beauty offers true brand ownership&nbsp;<a href="https://www.ulta.com/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(0, 102, 204);">Ulta Beauty</a> has one of the world’s most successful loyalty programs, with <a href="https://www.businessoffashion.com/articles/beauty/how-to-build-customer-loyalty-a-guide-for-beauty-brands/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">30 million </a>members and 95 percent of the retailer’s sales coming from shoppers who belong to the program.Recently they tried a new loyalty tactic, and worked with tech company<a href="https://bumped.com/blog/case-study-rewarding-customers-in-ulta-beauty-stock-up-levels-their-loyalty/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(34, 34, 34);"> </a><a href="https://bumped.com/blog/case-study-rewarding-customers-in-ulta-beauty-stock-up-levels-their-loyalty/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(0, 0, 255);">Bumped</a> to reward loyal customers with fractional shares (or fractions of shares) in the company. An <a href="https://www8.gsb.columbia.edu/newsroom/newsn/10797/owning-a-companys-stock-drives-brand-loyalty-and-increases-spending" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">independent analysis</a> revealed success, with customer rewarded shares transacting 73 percent more per month and increasing their monthly spend by 67 percent.Cole Buxton gifts fans NFTsLuxury sportswear brand <a href="https://www.colebuxton.com/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(0, 102, 204);">Cole Buxton </a>places a premium on rewarding community, which is why the British fashion label gifted its first collection of NFTs to its most loyal customers. If the NFTs are sold or traded the brand’s royalties will be donated to its soon-to-launch charitable foundation.&nbsp;Another way the brand strengthens customer loyalty and a sense of community? The founders recently filmed a documentary about the brand and how they found success.&nbsp;Sephora treats top spendersBeauty retailer<a href="https://www.sephora.com" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(0, 0, 0);"> </a><a href="https://www.sephora.com" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(0, 102, 204);">Sephora</a> is known for its tiered loyalty program. The brand also encourages shoppers to stay engaged and active by sending members a sample on their birthday.Sephora’s <a href="https://www.businessoffashion.com/articles/retail/customer-retention-loyalty-programme-repeat-purchases/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(17, 85, 204);">top spenders</a> are even treated to travel packages, which might include flights, a makeover and a dinner for two at a buzzy restaurant.&nbsp;

Forget slashing prices. Discover alternative ways to boost customer loyalty and retention.

Worried about customer retention? Here are the best examples of customer retention strategies to help your business retain your customers 

Customer retention examples: The best customer retention strategies

Customer retention examples: The best customer retention strategies US

It’s a typical dilemma for small business owners. Should you invest in reaching new customers or nurturing your existing customer base?

If there’s one mistake that entrepreneur Olivia Carr watches new business owners make time and time again, it’s pursuing new customers at the expense of their existing ones.“I mentor e-commerce brands, and they’re always chasing new customers,” says the founder of wellness and beauty brand Shhh Silk. “I go into their Shopify [analytics] and I see their return customer rate and think, ‘Whoa, we have some work to do here.“If [business owners] want more sales, it’s important to look at the customers they already have. Those customers already know the brand and have experienced the quality of the product.”&nbsp;

“Businesses who want more sales should look at the customers they already have."

In reality, customer acquisition and customer retention are both important for growth.&nbsp;And there will be times when businesses choose to focus on one over the other - depending on the maturity of their business, their industry or even the time of year.“Acquisition and retention must ultimately work hand in hand to attract customers to a brand, encourage the first purchase and then build a relationship that endures,” says Adam Simms, the co-founder of <a href="http://loypal.com/" rel="noopener noreferrer" target="_blank">LoyPal</a>, which uses data to drive value from brands’ existing customers.&nbsp;Here’s how to decide whether (and when) to invest your time and money in retention or acquisition.<h2>Why investing in acquisition is important</h2>Acquiring new customers is the fastest way to grow your business - and it’s particularly important for brands that are just starting out or have a new product offering.There are also certain times of the year that businesses may choose to concentrate on acquisition over retention. Black Friday, Cyber Monday and Christmas are specific periods when brands use compelling offers and discounts to attract new customers, for example.“The challenge is the quality of that acquisition,” says Simms. “You may be bringing people into the brand purely on the basis of <a href="https://www.afterpay.com/en-US/for-retailers/access/growing-with-afterpay/drive-more-sales-with-afterpay" rel="noopener noreferrer" target="_blank">discounting</a>.”&nbsp;In other words, these customers may be less brand loyal, more price-sensitive - and difficult to engage with in the long term.One solution? A strong lifecycle marketing strategy. To encourage customers to make a second or third purchase, brands need to keep customers engaged after that first sale by building a relationship that isn’t just transactional.&nbsp;<h2>How to measure acquisition&nbsp;</h2>For e-commerce businesses, measuring acquisition is as simple as checking your analytics. Google Analytics, for example, records whether users are visiting your website for the first time on their device or have visited before, and popular platforms like Shopify also provide reports on new versus returning customers. Brick-and-mortar stores can track shoppers by entering their details into a database, or via a loyalty program.But while investing in acquisition is one thing, acquisition that is cost-effective and profitable is another.There are lots of ways to assess the success or profitability of your customer acquisition strategy. Measuring the cost of customer acquisition (CAC) is one approach. If you’ve spent $100 in acquisition costs and brought in 20 new customers, your CAC is $5, for example.Alternatively, you can look at return on investment (ROI) or cost of goods sold (COGS). This involves factoring in all the costs and expenses related to creating your products or services, as well as the acquisition costs, to reveal whether your margins are healthy.<h2>Why investing in retention is important</h2>Acquisition isn’t the only way to scale your business. Keeping existing customers happy and encouraging them to purchase again and again, is another way to drive growth, but it is often overlooked.

“A customer’s relationship with a brand starts with acquisition, and finishes because of poor retention."

“A customer’s relationship with a brand starts with acquisition, and finishes because of poor retention,” says Simms.“Brands often wait too long before putting a real focus on retention,” he explains, adding that many younger brands are more confident with paid social media tactics than customer retention and loyalty strategies.The result? Brands with an impressive special media presence, but a less-than-healthy customer return rate, behind the scenes.&nbsp;Other common traps that lead to poor retention rates include waiting too long to build a connection with customers after the initial transaction and relying on heavy <a href="https://www.afterpay.com/en-US/for-retailers/access/smarter-discounting/sales-promotion-examples" rel="noopener noreferrer" target="_blank">discounting</a> to acquire customers in the first place.“Many brands will have in excess of 70 percent of customers only purchasing once,” says Simms.The solution is to focus on retention strategies, which are generally agreed to be more cost-effective than acquisition. An<a href="https://hbr.org/2014/10/the-value-of-keeping-the-right-customers#:~:text=Depending%20on%20which%20study%20you,the%20one%20you%20have%20happy." rel="noopener noreferrer" target="_blank"> oft-quoted statistic</a> is that acquiring a new customer is five to 25 times more expensive than retaining an existing one, although the precise figure depends on a myriad of factors.As Simms explains, “acquisition gets increasingly expensive over time, and acquisition strategies need to become more and more sophisticated to remain cost-effective”.

"Acquisition gets increasingly expensive over time."

In addition, building an early connection with customers to stimulate a second purchase helps offset acquisition costs. “The second purchase helps build a deeper relationship with the brand and payback faster on the cost of acquisition.”Retention marketing also offers greater financial security - after all, the bigger the pool of loyal customers, the easier it is to plan for the year ahead.Retention is a longer-term strategy, however.<h2>How to measure retention</h2>Businesses generally measure the success of their retention strategies according to their customer retention rate (CRR).A CRR is also a useful proxy for the overall health of your business; if customers are repeatedly purchasing your products or services, you’re obviously meeting their expectations.Like acquisition metrics, your business’ customer retention rate can be viewed in the analytics sections of your e-commerce platforms.Alternatively, software such as LoyPal not only tracks customer retention rates but allows brands to segment data and identify lapsed customers, too. Software such as Klayvio and Emarsys can then ensure these customers are targeted with personalized marketing – whether that’s discounts, perks or relevant content - to drive a repeat purchase.&nbsp;<h2>Top acquisition strategies</h2>Want to focus on acquisition? Try this:Social media advertisingUse paid social media to target specific customer groups and serve them relevant content or ads.Search engine marketingDevelop a paid keyword strategy to ensure that your business appears in customers’ search results.&nbsp;Organic content marketingCreate a sophisticated content marketing program to establish your authority and credibility, and raise brand awareness via organic search or organic and shareable social media.<h2>Top retention strategies</h2>Want to focus on retention? Try this.Email marketingRegular emails are an excellent way to stay top of mind with customers or stimulate a repeat purchase: and communication should be as relevant and personalized as possible.Loyalty program&nbsp;&nbsp;&nbsp;&nbsp;Offer customers rewards, in the form of discounts, previews and perks, for repeat purchasing.Use dataLeverage analytics – through software or a customer relationship management tool – to identify remarketing opportunities within your existing customer base.

It’s a typical dilemma for small business owners. Should you invest in reaching new customers or nurturing your existing customer base?

Are repeat customers more valuable than new customers? Read to find out more about customer acquisition vs retention.

Customer acquisition vs retention: which is more important?

Customer acquisition vs retention: which is more important? US 

Want to reduce costs, grow your business – and measure your brand’s overall success? Start tracking your customer retention rate now.

As a small-business owner, there are countless metrics to measure. However, one of the most important figures to track, aside from profit and loss, is your customer retention rate.Put simply, your customer retention rate (CRR) reveals how many customers stay with your brand after they’ve made an initial purchase.A high customer retention rate suggests your business is successful, while a low customer retention is a red flag; it suggests that one or more elements of your product, service or customer experience is not meeting customer expectations.As well as providing an overall health check for your business, strong customer retention rates are important in terms of acquisition costs, referrals and loyalty figures. Here’s how:Cost: A high number of repeat customers means you’ll need to spend less on acquiring new customersReferrals: Repeat customers are likely to be happy, loyal customers – who are, in turn, more likely to refer other customers to your businessLoyalty: Hyper-loyal customers are more likely to <a href="https://www.yotpo.com/blog/the-state-of-brand-loyalty-2021-global-consumer-survey/" rel="noopener noreferrer" target="_blank" style="color: rgb(17, 85, 204); background-color: transparent;">pay higher prices</a>, and support new releases or products<h2>How to calculate customer retention rate</h2>There’s a simple formula to calculate customer retention rate: CRR = ((E-N)/S) x 100<ol><li>Subtract the number of new customers (N) from the total number of customers at the end of the time period you’ve decided on (E)</li><li>Divide the result by the number of customers at the start of this time period (S)</li><li>Multiply by 100&nbsp;</li></ol>Let’s say you’re a fashion retailer with 100 customers during January. Then, in June you have 90 customers, 40 of whom are new. That means that your customer retention rate during that six-month period is 50 percent or (90-40)/100 x 100 = 50.<h2>What’s a good customer retention rate?</h2>Customer retention rates vary considerably according to a range of factors, including industry, cost of goods and the time period measured. Some industries - like banking - have extremely high retention rates of around<a href="https://www.bankrate.com/banking/best-banks-consumer-survey/" rel="noopener noreferrer" target="_blank" style="color: rgb(17, 85, 204); background-color: rgb(255, 255, 255);"> 75 percent</a>, with customers unlikely to make the switch between banks.Other industries, such as retail, have much lower customer retention rates, with one study finding that beauty retailers’ retention rates are around <a href="https://www.metrilo.com/blog/beauty-brands-ecommerce-benchmarks" rel="noopener noreferrer" target="_blank" style="color: rgb(17, 85, 204); background-color: rgb(255, 255, 255);">26 percent on average.</a> However, even within the beauty category retention rates can vary between products, with makeup enjoying a higher retention rate (<a href="https://www.metrilo.com/blog/beauty-brands-ecommerce-benchmarks" rel="noopener noreferrer" target="_blank" style="color: rgb(17, 85, 204); background-color: rgb(255, 255, 255);">20.4 percent</a>) than hair care (13.2 percent) for example.&nbsp;

Unordered Highlight List

<h2>How to improve your customer retention rate.</h2>Four ways to drive repeat purchases and create loyal customers.<h2>1. Understand why customers "churn"</h2>The flipside of customer retention is “churn," which is the number of customers who don’t return after they purchase from you. Boosting customer retention means taking a close look at your churn rate and those customers who aren’t returning.

"Start looking for clues in your data."

“Start looking for clues in your data,” says founder of ECommerce Growth Ian Rhodes. “Are people churning after one, three or six months? Do you understand why? Are you gathering customer insights that let you know why customers no longer use your product?”To better understand retention and churn, perform an audit to understand how, when and why people use your product. Even better? Survey customers about their experience and why they haven’t repeat-purchased.<h2>2. Map the customer journey and "surprise and delight"</h2>One way to strengthen customer retention rates is to map all the touchpoints on your customer journey – from the moment they first interact with the brand, through to purchase and post-purchase – and identify ways to "surprise and delight" them at each moment of their journey.That might mean offering visitors to your website a <a href="https://www.afterpay.com/en-US/for-retailers/access/smarter-discounting/sales-promotion-examples" rel="noopener noreferrer" target="_blank">discount</a> for signing up to your newsletter or adding a personalized touch to your delivery.

"They buy into our brand and appreciate how we make them feel."

Judy Fraser, founder of baby brand Bonnie + Kind, includes a personal note with every delivery bought online. “I believe part of the reason [customers] come back is the personalization upon purchase. They buy into our brand and [appreciate] how we make them feel like an individual [as opposed to] a label.”As well as the personalized note, Fraser photographs products that are purchased as gifts and shares them with the gift-giver, explaining, “This is so they get to see it and feel part of the whole gifting experience."<h2>3. Offer incentives</h2>Although <a href="https://www.afterpay.com/en-US/for-retailers/access/smarter-discounting/7-smart-retail-sales-tactics-that-can-work-at-christmas" rel="noopener noreferrer" target="_blank">discounting</a> should always be a last resort to avoid cutting into margins, offering incentives is a tried-and-true way to cultivate loyalty.This can be achieved through loyalty programs that offer rewards for repeat shopping, or perks such as previews of new collections or products, or other incentives such as early access to sales. Another option is to incentivize customers to refer other shoppers, a tactic that can drive sales among new customers and strengthen loyalty among existing shoppers.&nbsp;Find out more about how to launch a customer loyalty program that works here.<h2>4. Personalize the customer experience with tech</h2>Modern Point of Sale (POS) systems and Customer Relationship Management (CRM) software can deliver detailed data about your customers and the way they shop. Use these insights to make recommendations based on their purchase history or deliver content like email newsletters filled with products and recommendations (or even discounts) that will appeal to them specifically.

Want to reduce costs, grow your business – and measure your brand’s overall success? Start tracking your customer retention rate now.

What is customer retention rate? Read to find out how to calculate customer retention rate and ways you can improve. 

Customer Retention Rate: How to Calculate and Improve It 

Customer retention rate: how to calculate and improve it

Customer retention rate: how to calculate and improve it US

Secrets to creating customer loyalty and encouraging customers to buy from you again and again.

Reaching a new customer feels great. But there’s something even better: customers who return to buy your products or services over and over again.&nbsp;Why? Because although customer acquisition is the fastest way to grow your business, customer retention is the secret to long-term success.<h2>What is customer retention?</h2>Customer retention is the practice of nurturing and growing customer relationships to turn customers into loyal advocates for your business.&nbsp;<h2>Why focus on customer retention?</h2>Put simply, retention strategies pay off. “There are a range of studies that have demonstrated that it is cheaper to keep an existing customer than acquire a new customer,” says Philip Shelper, CEO and founder of<a href="http://www.rewardco.com.au" rel="noopener noreferrer" target="_blank" style="color: rgb(0, 0, 0); background-color: rgb(255, 255, 255);"> </a><a href="http://www.rewardco.com.au" rel="noopener noreferrer" target="_blank" style="color: rgb(17, 85, 204); background-color: rgb(255, 255, 255);">Loyalty &amp; Reward Co</a>.

"It is cheaper to keep an existing customer than acquire a new customer."

In addition, focusing on retention can lead to acquisition. One<a href="https://home.kpmg/xx/en/home/insights/2019/11/customer-loyalty-survey.html" rel="noopener noreferrer" target="_blank" style="color: rgb(0, 0, 0); background-color: rgb(255, 255, 255);"> </a><a href="https://home.kpmg/xx/en/home/insights/2019/11/customer-loyalty-survey.html" rel="noopener noreferrer" target="_blank" style="color: rgb(0, 0, 255); background-color: rgb(255, 255, 255);">KPMG</a> study found that 86 percent of happy, loyal customers will recommend a brand to friends and family. In other words, loyalty breeds advocacy and word-of-mouth marketing.&nbsp;&nbsp;<h2>Getting started with customer retention strategies</h2>Before you start creating a customer retention strategy, it’s important to get the basics right. “The obvious route to customer retention boils down to great product and great service,” says Ian Rhodes, founder of ECommerce Growth. “You’re destined to fail without those two primary ingredients.”

"Customer retention boils down to great product and great service.”

Next, look at your existing retention rates and decide what metrics you will use to track the success of your customer retention strategies.

Numerical Highlight List

Now, you’re ready to start implementing customer retention strategies.<h2>1. Customer accounts</h2>Creating a customer account not only helps businesses track purchasing behavior, it helps customers, too. Allowing them to easily access past order information, track current orders and pre-fill their personal and payment details makes repurchasing faster and more convenient.Tip: Creating a customer account can seem like a commitment for a first-time buyer, so ensure that you offer them the option to check out as a guest – otherwise you might lose the sale. One approach is to allow them to check out as a guest but then suggest creating an account in a post-purchase email.<h2>2. An onboarding journey</h2>Creating an emotional connection early on will help build loyalty. Think through your customers’ initial contact with your brand, and consider how to create an automated email funnel that could include:&nbsp;A welcome<ul><li>An introduction to your brand or founders, and explanation of why you started the business</li><li>An opportunity to provide feedback after the first brand interaction</li><li>An opportunity to capture more data – such as date of birth or communication preferences – to serve them relevant content</li></ul>Tip: Ask your customers how and where they want to communicate. “The best channel [to focus on] is the one your customers tell you to engage with them on,” advises Toolin. This not only sets you up for successful communication but also makes customers feel heard and valued – as though they are, in fact, in a two-way relationship.&nbsp;&nbsp;<h2>3.&nbsp;Digital receipts&nbsp;</h2>Are you a brick-and-mortar business? One way to capture customer data is to offer to send customers their invoice via email rather than printing it out. Not only does this allow customers to choose how they would prefer to receive their invoice, it is a simple way to add customers to your email database and track spending in-store.<h2>4. Loyalty programs</h2>“Loyalty programs are the ultimate retention strategy,” emphasizes Shelper. “They provide a formal structure to recognize higher-value customers, reward them for repeat transactions, and capture data that can be used to personalize experiences and interactions.”

“Loyalty programs are the ultimate retention strategy."

There are many different types of loyalty programs:Points: where customers receive points for every dollar they spend. These can then be redeemed for vouchers, discounts or products.Tiered: where shoppers are categorised into different tiers or groups – such as gold, silver and bronze – according to how much they spend. Each tier receives different perks.Value: where shoppers can "earn" points and redistribute them to a charity of their choice.&nbsp;Learn more about loyalty programs <a href="https://www.afterpay.com/en-AU/business/access/customer-service/customer-loyalty-programmes" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(194, 133, 255);">here.</a><h2> 5. Segmentation</h2>For customer retention strategies to be successful – and profitable – it’s important to identify customer audiences that hold sales opportunities. These might be lapsed customers or formerly high-spending customers who are purchasing less frequently.&nbsp;To do this, you’ll need to segment your customer base. It is possible to do this yourself using what’s known as an “RFM framework," which identifies how recently, how frequently and how much customers have purchased.You can then identify four key customer groups:·&nbsp;Your best and most loyal customers who deserve the most of your attention·&nbsp;Your high-potential customers who you could nurture to become loyal customers&nbsp;·&nbsp;Your at-risk customers who you need to re-activate as soon as possible or they’ll churn&nbsp;·&nbsp;Your lost customers who will help you identify behavior patterns that you can prevent&nbsp;An alternative to running these analytics yourself is to use a data tool such as <a href="https://www.klaviyo.com/email-marketing?&amp;utm_source=google-brand&amp;utm_medium=paid&amp;utm_campaign=7013o000002L2yjAAC&amp;utm_content=klaviyo_misspellings-eta&amp;utm_keyword=klavyio&amp;utm_matchtype=e&amp;gclid=Cj0KCQjw06OTBhC_ARIsAAU1yOU3tjrKiuZhJgoHKbdrNYRj1rht6A3P1yD_SwLBHNi625hAvueKzNQaAiTzEALw_wcB&amp;gclsrc=aw.ds" rel="noopener noreferrer" target="_blank" style="background-color: rgb(255, 255, 255); color: rgb(0, 0, 0);">Klavyio</a> or <a href="https://www.loypal.io/" rel="noopener noreferrer" target="_blank" style="background-color: rgb(255, 255, 255); color: rgb(0, 0, 0);">LoyPal</a>.“Many of companies spend a lot of time trying to understand anything and everything about their customer, but then do very little with that information,” says Adam Simms of <a href="https://www.loypal.io/" rel="noopener noreferrer" target="_blank" style="background-color: transparent; color: rgb(0, 0, 0);">LoyPal</a>, explaining, “this can lead to analysis paralysis.

"Companies spend a lot of time trying to understand their customer, but then do very little with that information."

Once you have identified and prioritized customer segments, the next step is to create retention strategies that engage with each group of customers differently. For example, lapsed customers could be targeted with discounts to entice them back, while high spenders may appreciate VIP events to keep them engaged.&nbsp;&nbsp;<h2>6. Personalization</h2>In many ways, loyalty is the result of relevancy. Customers will remain with brands that offer products that are relevant to them and their lives, and that speak to them in a way that feels tailored and personal.&nbsp;&nbsp;So, once you have broken your customer base into segments and identified which groups are most valuable, it’s time to create content that matches their interests, preferred buying or communication channels, as well as past purchasing behavior.There are a range of customer relationship management (CRM) tools, such as Klaviyo and Emarsys that allow brands to automate this process by sending personalised emails based on this data.<h2>7. Focus on the post-purchase experience</h2>You’ve sold the product, closed the deal and wrapped it all up, right? Wrong. The post-purchase period is a key opportunity to build brand loyalty.&nbsp;Consider ways in which you can enrich the post-purchase experience, whether that’s an email thanking customers for their business or a note or information pack educating them on how to use a product. It’s a simple and effective strategy.<h2>8. Customer surveys</h2>One of the quickest ways to make customers happy and encourage repeat buying is to remove all the pain points.&nbsp;&nbsp;“What is it about your business that customers just don’t like? How can those irritants be removed?” asks Rhodes, who notes that you need to identify if there are repetitive or common pain points that multiple customers have experienced, as that signals a process or service fault.&nbsp;&nbsp;&nbsp;&nbsp;

"This is time to ask what it is about your business that customers don't like."

To get to the bottom of any friction points, institute customer surveys, whether that’s a quick "How did we do?" survey at the end of the purchase process or asking customers to review products. Whatever approach you take, make it easy for customers or they won’t do it. You could even consider a "value exchange", and reward customers who provide feedback by sending out a gift or freebie.&nbsp;<h2>9. Surprise and delight tactics</h2>“Cultivate repeat customers into advocates by delighting and rewarding them at each touchpoint,” says Shelper.&nbsp;Creating "surprise and delight" moments starts with mapping out your entire customer journey, and identifying opportunities to insert unexpected, positive surprises.&nbsp;&nbsp;

"Cultivate repeat customers into advocates."

Here are some examples:Celebrate customers’ birthdaysWhat better way to delight your customer and make them feel valued than celebrating their birthday? Why not send an email (email marketing platform<a href="https://www.omnisend.com/blog/birthday-emails-tips-and-best-practices/" rel="noopener noreferrer" target="_blank"> Omnisend reports</a> that e-commerce businesses’ birthday emails average a 45% open rate) or offer a gift card or reward.Celebrate your birthday by rewarding customersJust as you celebrate your customers’ birthdays, celebrate your own business birthday by rewarding customers with a contest, discount or giveaway.Personalized notes or newsIncluding a personalized note from a small-business owner can be a great way to build an emotional connection between customers and brands. You could also strengthen loyalty by keeping customers up to date with your news – whether that’s a new team member or <a href="https://www.afterpay.com/en-AU/business/access/exploring-sustainability/small-business-sustainability" rel="noopener noreferrer" target="_blank">sustainability</a> initiative.Gamification and mystery offersCustomer engagement should be fun, which is where<a href="https://www.rewardco.com.au/category/gamification/" rel="noopener noreferrer" target="_blank"> gamification</a> – turning marketing initiatives or campaigns into games – comes in. Create giveaways or contests, or offer mystery prizes to keep customers engaged.Add an extraThere’s no better way to surprise and delight customers than including an added extra into their package. Think samples, gift cards, invites to collection previews or other small bonuses customers will love. If you’re considering providing a gift card, don’t forget to add an expirtion date to incentivise customers to purchase again sooner.&nbsp;<h2>10. Product subscriptions</h2>Does your product lend itself to a subscription model? Is it something that customers require every week, month or season? Could you work in an automatic reorder that helps the customer?“A solid product subscriptions platform can prove to be a great investment if marketed and framed correctly, but ensuring customers have control over the delivery and scheduling to pause or rearrange shipping is critical,” recommends Rhodes.&nbsp;&nbsp;Product subscriptions are only appropriate for certain products, too, so ensure this is aligned to your brand and purpose.&nbsp;<h2>A final tip for all customer retention strategies:&nbsp;</h2>It’s often said that you can’t manage what you don’t measure, and that’s certainly the case when it comes to customer retention.Boosting customer loyalty means diving deep into your analytics to identify customer return rates, and then using data to track the success of any new customer retention strategies.This might mean setting up a weekly, biweekly or monthly reporting dashboard to track customer retention.

"Customer insights are at the foundation of your work in customer retention."

As Rhodes explains, “All the answers to common customer retention questions can be found in analytics and through building out a program to gather customer insight. Whether you’re selling one product or 1,000, whether you have 100 customers or 1,000,000, customer insights are at the foundation of your work in retention.”

Secrets to creating customer loyalty and encouraging customers to buy from you again and again.

Worried about customer retention? Here are the best examples of customer retention strategies to help your business retain your customers. 