Customer attraction and retention strategies are integral to any business. According to experts, more than half of a company's profits come from loyal customers. That is why it is important to focus not only on advertising campaigns aimed at new users but also on working with existing customers.
We offer an overview of the main strategies: how to avoid losing a customer after the first order, encourage a loyal audience to make new purchases, and how expanding payment options contributes to customer retention.
Why Is Customer Retention Profitable
Building long-term relationships with customers helps:
- Reduce marketing costs. A business spends five times as much to attract a new customer as it does to encourage an existing customer to make a repeat order. Having a loyal audience reduces the cost of advertising campaigns.
- Increase profits. There are many different ways to increase revenue, but customer retention and increased customer loyalty keep profits stable. Pay.com estimates that existing customers make 46% of orders, even though they make up only 21% of the audience.
- Form a connection with your audience. A customer retention strategy helps create a loyal audience for a company. These customers don't waste time searching for other stores and analyzing competitors, are more likely to offer feedback and participate in loyalty programs.
What Is Customer Retention Rate
This important indicator reflects a brand's ability to build long-term relationships with its audience.
To calculate the Retention Rate, you need to know the number of new customers for the period (N), the total number of customers at the end of the period (E) and at its beginning (S). The calculation formula is (E - N) / S. The resulting number should be multiplied by 100.
The result is the percentage of customers the company was able to retain during the period under review. It reflects how effective the company's customer retention methods are. A decrease in the Retention metric compared to the previous period may reflect problems that cause customers to stop coming back.
Ways to Retain Customers
A company can use several customer retention tools to increase its Customer Retention Rate. Let's take a look at the main options.
Loyalty Rewards
One of the working strategies is to launch a loyalty program for store customers. Their terms can be different: discounts on birthdays and holidays, special offers, accumulation of bonus points, participation in prize drawings, early access to new products, personalized recommendations.
Loyalty programs contribute to customer retention by offering unique favorable conditions. Discounts and bonuses are an incentive to return for repeat purchases. According to a survey, almost 70% of customers are willing to participate in such programs.
Easy checkout
A simple checkout process is important for attracting new customers and ensuring returns. A clear and convenient checkout reduces cart and order abandonment, increasing conversion to purchase.
Ensuring this can be accomplished in a number of ways. These include making the interface user-friendly, optimizing for different devices, and reducing the number of steps required to complete a purchase. For example, the need to register with phone or e-mail confirmation increases the likelihood of abandonment by increasing checkout time.
Improving customer service
Good tech support and quality customer service are other factors to consider when dealing with customer churn and retention. If a user has questions or problems, they should be resolved as quickly as possible.
Service organization can vary from company to company. As a rule, support includes chatbots on the website and the ability to contact a live specialist.
It is recommended that customers be provided with several ways to interact with store representatives: online chat, e-mail, social media, and phone. In addition, it is recommended that they pay attention to responding to reviews to improve the service.
Plan for working with the customer after the purchase
The strategy for working with customers should include attracting users to the store and encouraging them to order, as well as working with them after the purchase is completed. Proper interaction increases the likelihood that the customer will return for repeat orders.
Many companies use automated e-mails after customers receive an order to ensure return customers. The letter may contain a thank you for the purchase, an offer to write a review or take a survey, a personalized selection of products, a discount promo code for the next order, or an offer of additional service.
Marketing personalization
Personalized offers are another key customer retention tool. In modern marketing, businesses are expected to take a personal approach: birthday greetings and discounts, unique product selections according to previous purchases and positions in the “favorites”, personalized promo codes.
For personalization, the data obtained during the customer's interaction with the store is used. The company can use information collected from purchase history, customer profile on the store's website, surveys, etc.
Offering more payment options
Expanding payment options is a way to attract new customers and retain old ones. You should study which payment methods are relevant to your audience and not limit yourself to popular methods (bank cards, e-wallets). For example, local and crypto payment methods can help increase sales and attract an international audience.
It is important to remember that paying for an order should be convenient for any connected method. Cryptocurrency payment gateway, such as CryptoCloud, can be used as an additional payment method.
The service will help simplify cryptocurrency payments, process them in the minimum time, and offer buyers a high level of security. The cryptoprocessing commission is 0.4%, which is much lower than the fees of fiat services.
Offer discounts on subscriptions
A subscription system is an opportunity to automate customer retention. This tool helps ensure regular purchases that benefit both the store and the customer. Typically, this approach involves discounts that increase with a one-time payment for a long-term subscription.
Subscriptions can include regular delivery of kits, such as ready meals, snacks, beverages, cosmetics, etc. Companies may also offer subscription discounts for loyal customers. Finally, many services and online platforms are turning to paid subscriptions.
Creating wishlists
The option can be realized in various ways: «favorites», «favorite products», «planned purchases», and «wishlist». This list can be part of the menu, pop up when you enter a site or application, or be used in the formation of personalized applications.
The presence of a Wish List helps the customer decide to order and not forget about the product that attracted attention during previous purchases. Some stores also give users the opportunity to share the list with other people to simplify the choice of gifts—this helps to attract new customers.
Returning customers through cascading e-mails
The customer retention system through mailings includes e-mails, SMS, and push notifications. The algorithm determines how long ago the previous order was placed and automatically sends the appropriate notifications.
For example, a week after placing an order, a customer may receive a push with an offer of a specific product selected based on the purchase history. Two weeks later, the company may send a notification about an active promotion. After a month, a personalized promo code is sent. The purpose of such a mailing is to remind the customer of the brand.
Improvement based on feedback
Another customer retention tool is offering to leave a review, give a rating or take a survey. Feedback can be asked through post-order mailings, push notifications, when logging into an app, etc. Many companies use bonuses and other rewards to encourage feedback.
Requesting feedback and improving service based on it helps build customer loyalty by demonstrating that the company considers their opinions. In addition, it helps the business fix problems in a timely manner.
Accepting Cryptocurrency Payments With CryptoCloud
One tool for retaining customers is connecting various payment methods, including crypto payments. You can do this through CryptoCloud.
CryptoCloud is a cryptocurrency payment gateway that allows users to automate the processing of crypto payments. The service's commission is 0.4%, and connection is free of charge.
Gateway allows you to organize the acceptance of payments in cryptocurrency on a website or in an application and use payment links to work in messengers and social networks. Features include checkout customization, auto-conversion of incoming funds into USDT stablecoin, automatic AML checks, choice of commission payment side, and fast withdrawal of funds.
Checkout is available in several languages, simplifying working with an international audience. The service supports Bitcoin, Ethereum, Tether and other popular currencies.
Customer Retention for a Successful Business
Attracting new customers and building a loyal audience are important for a company's development. Customer retention costs are lower than attracting new customers, and more than half of a company's profits come from orders placed by a loyal audience.
There are many ways to keep customers returning, from improving service to launching a loyalty program. One tool to retain customers is to expand payment methods, including incorporating crypto-payments.
You can do this with CryptoCloud, a convenient service that makes it easy for both parties to accept cryptocurrency payments. Learn more about the platform's capabilities on our website.
