Customer Retention Principles to Live By

Updated: October 13, 2016

When a customer walks into a brick-and-mortar storefront, the store owner has the opportunity to build a relationship with them right then and there. They can come out from behind the register to greet the customers, assess body language in order to anticipate needs and answer questions. They can also make sure that the purchase process is smooth, thank their new customer by name and invite them to come back soon.

An online shopping environment, however, is completely different.

The emphasis here is on efficiency. Knowing this, you work to create an environment ripe for conversion with an appealing layout, easy access to the information your customers need, and a simple checkout process.

While it sounds easy, anyone with an online store knows that this takes a lot of work, as does generating website traffic. After all that time and effort, seeing an order come in can feel like crossing the finish line. All that’s left to do is fulfill the order and celebrate, right?

Not so fast!

Let’s reserve that celebration for when that customer orders again and/or refers a friend.

Why Retaining Customers Matters

We’ve all heard that it’s cheaper to keep existing customers than it is to acquire new ones. But did you know that existing customers are 6 times cheaper to convert and they spend an average of 33% more than a new customer?

We know that referrals are great, but did you know that people are 4 times more likely to buy when they’re referred by a friend?

I’m not suggesting that landing a new customer isn’t something to celebrate. But if you’re only watching the new customer conversion stats, you’re leaving a lot of potential wins on the table.

Remember that kid’s song, “Make new friends but keep the old. One is silver and the other is gold.”

3 Principles of Customer Retention

There are lots of articles out there that will list the top 5, 12 or 21 things to do to retain customers. But every brand and store is different. Each has a unique voice and story, so instead of gimmicks let’s focus on principles:

Email Communication the Right Way

Applying these principles can be easier than you think. Service after an online sale is incredibly predictable:

• Boring confirmation email
• Simple shipping notification email
• Endless email solicitations

Now that we’re focusing on customer retention, these simply won’t do. It’s time to stop being routine and start being awesome.

Let’s look at a brand that does this really well.

Meet Native. They sell $12 deodorant. Really. Twelve-dollar all-natural deodorant that outperforms store brands. I know this because I’m a customer. While the product is great, I loved the company before my package ever arrived.

Their email communication accompanying the sale was so different that I was immediately rooting for them and desperately hoping that their product would live up to the hype. Take a look at their confirmation email:

Fun, right? Of course, my order specifics were outlined as well, but it was the personality of the greeting that caught my attention. Native took what is typically an afterthought – a simple order confirmation – and used it as a way to surprise and delight their new customer.

I loved it so much that I replied to let them know. I had no expectations about getting a response to my message, but I got a real human reply…within four hours. Now THAT is awesome!

The next step was a shipping notification email, which was branded beautifully, but pretty standard. Then came another surprise: a delivery day email. When my package was confirmed as delivered, I got this email within hours:

A quick scroll gave me four illustrated tips for using my new deodorant as well as their contact and social media information. Someone at Native thought about what information I need to make the most of their product. Then they communicated that information, in their unique style, at the moment I needed it. Pretty slick.

How Will You Encourage Repeat Business?

Certainly we can all agree that Native is doing post-sale emails really, really well. But the larger message is this: make the most of every opportunity to be awesome.

Think about what happens after someone purchases your product. They’re no longer a website visitor, they’re now a customer. How will you welcome them to the family? Are you making the most of every opportunity to listen to your customers, to stand out from the crowd and to treat each one as a VIP?

How do you approach customer retention? Need to make some changes? What about the companies you purchase from? What do they do they make you feel special and earn your repeat business? Let us know in the comments below.