5 customer retention tips to drive sales and loyalty in your retail business
Customer acquisition can sometimes be the shiny new toy that gets all the attention. But old reliable retention is where the money’s at. Depending on which data you cite, customer acquisition is anywhere from 5 to 25 times more expensive than retention.
The question is, how can you cash in on all that customer retention has to offer? Here are 5 tips to get you started.
1. Implement personalisation (tech helps, but this doesn’t have to be fancy!)
Today’s technology, both online and in-person, is making personalisation more accessible to retailers of all kinds. Many ePOS systems will track customers’ purchase history and sync with a loyalty program, so you can identify trends or feed the data to a tool that will identify trends for you.
Accenture found that 65% of consumers will purchase from a brand that knows their buying history.
Personalisation doesn’t have to be fancy. At some stores, for example, they’ll ask for your name at the door and then write it on the board outside your fitting room. It’s a small effort, and all you need to do to implement this in your own store is by adding a chalkboard, dry erase board, mirror or other reusable writing surface to your fitting rooms. It’d be a smart move, especially considering that more than half of consumers will shop with a retailer that recognises their name, also according to Accenture.
2. Have a customer loyalty program
Speaking of personalisation, one way to drive customer retention is to get to know your customers and provide relevant value through a customer loyalty program. These programs provide deeper insights into your customers and also helps you stay top of mind.
When executed properly, loyalty programs increase customer lifetime value. Plus, basket size inevitably increases, as 66% of consumers who belong to loyalty programs will modify spending to maximise rewards. And they’ll return for future purchases to gain or redeem their rewards.
3. Take a stand
It’s becoming more common for brands to take stands on issues. There are a few benefits to this approach, one major one being customer retention.
First, 64% of consumers base their relationships with brands on shared values. And when brands are truly committed to those causes, they can build meaningful relationships with customers that turns into lifelong sales.
4. Create a community
We’ve previously discussed how you can build a community using your retail store. Community builds and nurtures authentic relationships and drives customer loyalty. Creating a community around your brand or store helps customer retention in a couple of ways:
- Gives customers a reason to return to your store. Hosting in-store community events encourages repeat visits and, eventually, transactions. The more a customer visits your store, the more likely they are to make purchases.
- Builds trust. Consumer trust leads to sales: 62% of consumers consider brand trust to have a great influence on their buying decisions. Creating a community, a safe space, establishes trust and a lasting relationship with your customers.
To see community-building done right, check out We Built This City, a London-based retailer that showcases and sells works from local artists. We Built This City promotes a sense of community in and around its store by allowing customers to interact with local artists directly. This practice not only strengthens customer relationships, but it also helps We Built This City stand out. As the founder, Alice Mayor explains: “Our point of difference is that we have this incredible artist community who can come and showcase their talents live in-store and connect with our customers in a truly meaningful way.”
5. Nurture relationships through post-purchase communications
Treating your customers as humans rather than sales numbers is extremely important for customer retention. A recurring theme in this article, strong brand-customer relationships drives loyalty and repeat purchases. One way to build on those relationships is through post-purchase communications.
Rather than taking a customer’s money and setting your sights on the next sale, use post-purchase communications to keep the conversation going, provide value, and demonstrate appreciation for their loyalty. This will make customers want to return to your store rather than a competitor’s.
As we’ve noted, personalisation is extremely effective, so incorporate a personal touch in these tactics. Implement an ePOS system that can track customers’ email addresses and purchase history, so you can make smart, relevant product recommendations and increase conversion rates.
Some ideas include:
- Give customers a coupon for their next purchase
- Request customer feedback on their recent purchase
Pro tip: Make sure you respond to and use the feedback you receive. If customers complain and you don’t respond, you may damage your brand.
- Invite shoppers to join or give them an update on their status in your customer loyalty program
- Provide personalised recommendations for products and content based on previous purchases
- Send product education content to help customers get the most of their purchase
- Email receipts that contain one or a combination of the above
Regardless of which tactic(s) you try, automation will help you save time and stay top-of-mind with your customers. Trial-and-error is key: Look at your data and see what’s working and what’s not. From there, you can establish theories to test new strategies and tactics.
Every retailer needs a reliable point-of-sale system. We’ve teamed up with Vend point-of-sale to provide members with exclusive benefits that will help grow your business.