E-commerce is a dynamic industry. In this rapidly evolving landscape, customer retention plays a pivotal role. The process by which companies bring in new clients is similar. Convenience is more important to consumers than ever in the current retail environment. The source of customers and the cost of acquiring new ones are shifting as a result of the marketplace’s explosive growth and the opportunity to shop while surfing social media. Since the pandemic, marketplaces have experienced exponential expansion, with that industry rising by 80% in the last quarter of 2022.
According to a recent study, respondents now value convenience 78% more than they did before the pandemic, and 76% of respondents rank convenience as a top consideration when choosing a retailer. A whopping 46% of respondents claim that convenience even takes priority above cost-saving measures, and 38% of respondents now take convenience for granted when they purchase. It is getting more crucial to keep repeat customers as the cost of customer acquisition rises. Here, we will discuss everything in detail.
Meaning of Customer Acquisition
The process of marketing your brand, creating onboarding and conversion experiences, and encouraging potential consumers to make their first conversion is known as customer acquisition. This initial conversion may take the form of a purchase, subscription, app download, order, etc., depending on your line of business. As a potential client progresses from being blissfully unaware of your brand to weighing your product against competing choices to making a purchase decision, the process of gaining a new customer may involve numerous steps.
Goal Of Customer Acquisition
The goal of customer acquisition is to draw in new clients. Getting new clients requires convincing potential customers to purchase a business’s goods and services.
How Can You Measure Customer Acquisition?
The cost a company incurs to bring in new customers is known as the customer acquisition cost (CAC). It assists in calculating the ROI of client base expansion efforts.
Ways to Calculate Customer Acquisition Cost
CAC = MC / CA, where,
- CAC: Customer Acquisition Cost
- MC: Marketing Costs
- CA: Customers Acquired
To spread the word about your brand and draw in new customers, use acquisition marketing. As a result, it is essential to any company’s e-commerce marketing strategy. More specifically, prospects in the “interest” or “review” stages of the conversion funnel are the target audience for acquisition marketing.
Ways to Minimize Customer Acquisition Cost
- Boost website conversion rates by optimising landing pages, making your site mobile and tablet compatible, and editing copy.
- Increase the value of existing customers’ purchases. You can do this by offering them new product releases or upgrades.
- Modify and improve your customer acquisition approach. Budget for your acquisition and determine the costs associated with each method.
Customer Acquisition Strategies That You Must Try
Your potential customers have previously been exposed to and expressed an interest in your product during the consideration stage of the marketing funnel. Provide all the details as to why your product is the perfect fit for their needs to ensure that you don’t leave them hanging here.
If you educate your customers about your product, then they won’t opt for other options. It will help you to acquire your customers in the long run.
One of the quickest ways to promote your brand and your products to potential buyers is through paid marketing. In contrast to waiting for potential customers to find you naturally, paid marketing purchases adverts that can target a specific audience.
Search engine results pages (SERPs) and social media platforms display paid marketing. Choose a specific channel and specify your target market when developing paid marketing advertising. You should determine your target market based on location, search phrases, interests, demographics, previous purchases, and other pages you visit.
Because they are so easily accessible today, influencers have strong opinions. As a result, more and more businesses are using influencer marketing. In most cases, when a business chooses to work with an influencer, it provides the influencer a complementary good or service. Influencers receive a good or service, use it, and then give their audience a review.
- It assists in reaching a large audience
- You can develop trust
- Your brand increases its reach.
By enabling recurrent access to your website, email marketing is a quick, adaptable, and affordable approach to attracting new customers and keeping existing ones. Email marketing also makes it possible to create personalized and targeted messages.
- A flexible style
- Segmentation and personalization
If you run a good business, your present clients will suggest a business to you, which will eventually increase your revenue. But it will likely draw additional clients. Unfortunately, altering this is difficult, so switching to a larger, more lucrative account typically takes a lot of time, effort, and a knowledgeable salesperson.
- The lowest cost per lead is via referrals
- The conversion rate for referrals is more
Traditional marketing draws in target markets by promoting goods, services, and enterprises through offline channels. Therefore, conventional marketing is crucial to the expansion and success of your company, just as online marketing channels are.
- It allows you to reach your local audience
- It builds credibility
- Promotional items are reusable and recyclable
Search Engine Optimization (SEO)
SEO is the process of obtaining free, organic, editorial, or natural search engine results. The goal is to raise the website’s position in the index of search results.
- Increase recognition of the brand
- It elevates you to the top of the market
You can already be developing your audience without even realizing it, which is crucial for any business.
- Creating a community
- Establish trusting relationships
- Increased collaboration
In the end, content marketing increases sales by drawing in more customers and fostering stronger relationships. There might, however, be unique difficulties.
- Increase brand recognition, loyalty, and trust
- Boost visitors and conversions
- Helps other marketing strategies
Increasing your consumer base is the secret to creating a successful business. Some clients may quit making purchases from you, which is natural. People do move around, after all, and their needs occasionally change. But if you consistently lose clients, especially if they choose to do business with your rivals, you have an issue that requires fixing.
Poor customer retention costs you money and hinders your firm from growing. Acquiring a new customer is five times more expensive than retaining an existing one. Additionally, the likelihood of selling to an established customer is 60% to 70%, compared to only 5% to 20% for a new customer.
Meaning of Customer Retention
Customer retention refers to the actions a business takes to turn one-time customers into devoted ones. It counts the number of people that keep coming back over time to buy products from your business. Customer retention, in other words, is the art of understanding the customer journey, giving them a remarkable experience at every touchpoint, and exceeding their expectations to prevent them from switching from your brand to their rivals. A high proportion of customer retention suggests that clients like your offerings over those of rivals. You need to employ a variety of customer retention strategies to entice repeat business if you want to withstand the fierce competition when brand loyalty is not guaranteed.
The goal of Customer Retention
The primary goal of customer retention is to increase the number of repeat customers while lowering the turnover rate.
How To Calculate Customer Retention?
You must ascertain the customer retention rate (CRR) to compute client retention.
CRR is a strategy that displays the number of clients who stay on board over a predetermined time frame.
You should follow the steps listed below to compute the customer retention rate:
- Count the number of consumers you will have at the end of the period.
- Subtract this sum from the total number of new clients attracted over the same time.
- Next, increase this number by 100 and divide it by the total number of clients you had at the beginning of this period.
- This figure represents your client retention rate.
You can use the following s method to get your customer retention rate (CRR), which takes into account the clients you had at the beginning, the end, and the measurement period (S, E, and N).
CRR = ((E-N)/S) x 100
Why is Customer Retention important?
One of the most effective strategies to increase business profitability is through client retention. Loyal consumers help your business grow through excellent word-of-mouth marketing as well as by ensuring a consistent flow of cash. Measuring customer retention enables understanding a company’s performance in luring new clients while maintaining its current clientele. You can use it to determine how devoted your customers are, how effective your customer service is, and the dangers you need to avoid to increase customer happiness.
The cost of acquiring a new customer is also five times higher than the expense of maintaining an existing one.
In contrast to customer acquisition, customer retention increases ROI, increases customer loyalty, and is more affordable.
Ways to Boost Customer Retention
To enhance user onboarding
Users’ inability to understand how to make the most of a product is a major contributing factor to churn. According to the business, make the client aware of the main advantages that a product offers during the onboarding process.
Training sessions that inform users of recommended practices and established workflows are an excellent method to do this. Providing your clients with the tools they need to succeed will increase customer satisfaction and reduce churn over time.
Together with your customers, develop a workable roadmap
When it comes to establishing and meeting client expectations, be reasonable. What levels of success did similar businesses achieve? Make the time to arrange a meeting so that you can create a roadmap that your new client will find comfortable. A realistic roadmap should contain achievable objectives. The customer success team, for example, should be able to quickly view this customer roadmap and take appropriate action.
Collect Feedback from Customers
Getting customer feedback is the best method to keep them as a customer. In this situation, a well-crafted customer survey can provide actionable insights into what customers appreciate about your product and what needs improvement. In light of this, you might alter your product approach to increase client retention. Customers enjoy it when you openly ask them what they think. Additionally, it will please them if you let them know about the modifications you made in response to their advice.
Upsell to existing customers
Upselling can increase client retention among devoted consumers. They get more vested in your brand when you persuade them of the necessity for a more expensive or superior service. To keep existing clients as active as possible, it’s a wonderful idea to use existing content assets to remind them of all the benefits the product offers.
Use CRM software
By assisting you in tracking client behavior over time, the correct customer relationship management (CRM) software encourages and facilitates customer retention. It can inform you of the product usage and purchasing habits of your customers, as well as notify you when they stop making purchases from you. You can keep track of customer service encounters to learn about their problems and complaints.
These crucial customer behavior indicators are red flags that you might lose a client, giving you the chance to step in and possibly preserve the account. After comprehensively understanding your consumers’ behavior patterns, you can decide whether to revise your customer experience tactics or if you’re on the correct track.
Use Social Media
Many times, customers won’t reach out to you via phone or email. They may instead contact your company through social media. They might examine your social media profile, post a review or comment, or ask you a question. Therefore, it becomes essential to interact with your audience on various social media sites, such as Facebook, Twitter, Instagram, etc., since doing so helps to increase the retention rate. Customers will feel more cared for when you respond to their questions on social media platforms fast, which will enhance their relationship with your brand.
Fast Delivery and Free Returns
If you run an online store, you must concur that “free returns” and “fast delivery” are two essential elements in deciding the success of your enterprise. These two elements both have an impact on the rate at which clients leave. Customers prefer receiving their orders as soon as possible. They don’t want to have to wait longer than two days after placing an order because “2-day delivery” is now the new norm for delivery times. And they will switch to competitors if the store is unable to meet their demand within two to three days or as promised. Customers also favor companies who make it simple for them to return their purchases. One of the most efficient methods for keeping customers is to offer free returns on all orders.
Your company can gain insight into the thoughts and feelings of present and potential customers by utilizing customer acquisition and retention strategies. If used appropriately, these data can help streamline the customer journey, boost sales, and even lead to new business prospects. Tapping into customer retention and acquisition offers a means to gain a pulse on your target demographic. Customer acquisition and retention are just as important to startups and business owners as your organization’s expertise and technology.