Retailers know that revenue boosts rarely come from newly converted customers, but instead from loyal, repeat shoppers who return to make purchases on a regular basis. This is due both to the cost of acquiring new customers and their lower likelihood of making a transaction; in fact, acquiring a new customer can be 5 to 25 times more expensive than retaining an existing one, whereas increasing customer retention by just 5% can increase profits by 25% to 95%.
How can retailers take steps to measurably improve customer retention? While there are numerous approaches to retaining and continuously engaging existing customers, the common denominator between these strategies is personalization. In order to improve customer retention, retailers must be able to respond to specific customer needs rapidly and relevantly.
We’re exploring top customer retention strategies—each of which could be incorporated into a larger customer loyalty program or a shorter-term push to improve customer retention—that are united by their grounding in personalization. To drive retention, these strategies require retailers to:
Engage Customers in Real-Time Based on Location
In order to encourage existing customers to revisit a brick-and-mortar location, retailers must capitalize on engagement opportunities as soon as they arise. That means understanding when a customer is in the right place to be targeted—based on Wi-Fi beaconing and other streaming data—and what their mindset is likely to be, based on their environment, recent purchases, online browsing patterns, time of day, and more. This knowledge allows retailers to deliver offers that are personalized to each customer’s context in real-time, increasing their effectiveness and driving foot traffic.
Offer Tailored Deals, Messages, and Assistance
While increasing store traffic is important when striving to improve customer retention, not all retention-focused engagement needs to lead shoppers to their nearest store location. Instead, engagement should be focused on helping existing customers find exactly what they need to continue making purchases, both online and off. This may be a timely discount when browsing for a product online, directions to a certain area of the store where they can find an item they have repeatedly viewed online, or an opportunity to chat with a store representative—whatever the message is, it should be based on an in-the-moment understanding of what the customer is interested in. This relevance is key to retention.
Deploy Strategic Post-Purchase Follow-Up
When a purchase is finalized, retention strategy is only beginning—retailers should quickly begin engaging with the customer to proactively encourage their next purchase. By creating a customer touch point and thanking them for their continued loyalty with added rewards points, a free giveaway, a deal they’re likely to use, or another perk—even just a reminder about an upcoming sale can go a long way in delighting customers and bringing them back. By doing so, retailers are actively maintaining customer loyalty while also strategically shortening the time to next purchase.
Transcend Channel with an Omni-Channel Solution
Most importantly, retailers must be prepared to engage with existing customers on all of the channels they use every day, from email, to text, to web, to mobile, and much more. When retailers are able to seamlessly continue existing customers’ journeys across channels and engage them in a timely manner in the format that makes the most sense in-the-moment, they become less like companies and more like trusted individuals worthy of continued respect and loyalty.
Ultimately, in order deploy strategies that will improve customer retention, retailers must first lay the groundwork for personalized engagement with a stream of knowledge about where their customers are, where they go, what they’re interested in, and how they prefer to engage.
ZineOne’s AI-powered Customer Engagement Hub (CEH) does just this, offering continuous intelligence about existing customers based on their past behaviors, real-time signals, and current environmental variables. The platform then applies AI and ML models to deliver personalized experiences that strategically boost retention. Learn more about our CEH and discover how you can improve customer retention in real-time.