Did you know that it’s five times more expensive to acquire new customers to your business rather than to keep your existing customers? Today, most businesses are mainly focused on getting new customers in order to increase their sales and spend a lot of money on advertising and attracting traffic to their online stores. But what you as a business owner need to focus on is a really valuable resource - your existing customers. This is not to say that you should stop acquiring new customers, but for more profitable revenue, it’s better to have a larger percentage of loyal customers.
The Numbers Say It All
“On average, loyal customers are worth up to 10x as much as their first purchase.” —MarketingTechBlog
It’s well known that investing in your loyal customers costs you less and gives you more. Let’s talk numbers: you probably heard about the 80/20 rule or the Pareto principle, which says that loyal customers account for 20% of all the customers but they generate around 80% of total revenue. It happens because loyal customers trust you much more than new customers do as they already have a connection with your shop, they are ready to purchase more expensive services and products from you and also give you an opportunity to up-sell and cross-sell your products and services to boost your sales.
A lot of studies show that loyal customers spend 10 times more over their lifetime. And new customers not only cost more to acquire, but they also don’t spend as much money as loyal customers do. It will cost you almost 16 times more to get a new customer to the spending level of your loyal customers. According to Huify.com the success rate of selling your products and services to an existing customer is 60-70%, while the success rate of selling to a new customer is much lesser - only 5-20%.
Loyal customers are not just more profitable, they can also promote your products and services as they refer to almost 50% more people than one-time buyers. Increasing your customer base is still an important part of growing your business that's why referrals mean that your business has a social proof and attracts more customers, irrespective of whether it’s a mouth-to-mouth referral or an online review.
6 Ways To Show Value To Your Customers.
It’s obvious that loyal customers are worth a lot for all types of businesses. But do you know what the best way to show value to your existing customers is to increase their loyalty? Or how can you convert your new customers into loyal customers? And what makes a customer come back to shop at the same store again and again? When asked, online shoppers said they returned to an online shop again because of fun and engaging reward programs, or emails with discount codes and vouchers, but mostly they would come back to shop for more because they enjoyed previous shopping and had a pleasant experience with a store. After analyzing we chose 6 ways that need minimal investments and can rapidly increase customers' loyalty:
Implement a Loyalty and Rewards Program
The greatest way to keep your customers loyal to your business is through Loyalty and Reward Programs. These programs offer value to your customers, strengthen the customer-brand relationships and increase repeat purchases on your online store. They also boost engagement using convertible points and VIP-tiers on your website. Increase repeat purchases and turn your customers into loyal advocates by rewarding customers with convertible points for actions and let them redeem earned points for cool rewards like the fixed amount of money, sweet percentage discounts or free shipping. The more points customers gain the more they come back to buy again and again from you.
Demonstrate the Quality of Your Products
One of the best ways to get customers’ attention and retention, and hopefully build a lifelong relationship with them is to demonstrate that you're offering superior quality products and services. Customers are more likely to trust an online store that shows confidence in what they are selling. This allows you to present to the customer what differentiates you from the other competitor stores and gives your customers something positive to focus on. It is a simple and yet effective way to build up customer experience.
Showing honest appreciation is one of the easiest ways to build a closer relationship with your customers. It’s a pretty simple task but can mean a lot to a customer because thanking them may add a feeling of personalization to their shopping experience. You can thank your customers for shopping at your store, for writing a review or for placing an order by giving out points or discounts or by adding a little gift with their order. There are a lot of ways to thank your customers that won't take much time from you but put a smile on their faces.
Take Advantage of Shopify Apps
There are a lot of apps that have features and tools that can help you reach new customers, engage with your existing customers and gain customer loyalty in order to increase your sales. But don’t forget that integrating with too many apps might slow down your online store’s page loading speed because of code conflicts from several apps. That’s why discovering Growave - an all-in-one marketing platform will make your work easier and save your company’s money and time. It’s features include Loyalty and Rewards, Comments, Reviews, Social Sharing, Wishlists, Community, Social Login, Automated Emails, Instagram app, and Notifications are under one dashboard. The app is easy to set up and makes the transition seamless. With Growave, you get all the tools for reaching, engaging and converting your customers from one place.
Send Follow-up Emails
After the customer has made a connection with your store and placed an order, make sure you send him a follow-up mail. These emails work as the customer has already engaged with your store. Follow up emails generate tons of revenue and enhances your customer's experience. But remember that there are so many emails that users receive daily, so make sure your emails stand out among the others, make them personalized, fun and let your customers know how happy you are to have them shop from your store.
Improve Your Customer Service
No matter what people say, customer service has a huge effect on a business’s ability to keep its customers. It builds the company's positive reputation, it retains customers and, of course, increases sales. Customer service needs to focus on treating your customers well, answering their questions, and exceeding their expectations. And don't forget that a great customer service can work as the best form of advertisement for your business.
All in all, in a world where your competitors’ shops are only a click away, make sure you a solid customer retention strategy in your portfolio of eCommerce start-up guide. This will help you know the values of your loyal customers and take care of them. In the words of Theodore Roosevelt, “People do not care how much you know until they know how much you care.”
Author’s bio: Aida Kubatova is a Content Strategy Manager at Growave. She believes in the power of eCommerce and loves online shopping herself. Every day she creates useful content to help entrepreneurs around the world to learn more about the latest news and innovations from the world of Digital Marketing and eCommerce in order to grow their online business and, of course, sales.