How to Retain Your Customers

Published in Online Marketing.

Your Current Customers Are Your Most Valuable Customers

In a study by F. Reichheld and P. Schefter from Harvard Business School, it was found that increasing customer retention by even 5% can increase profits between 25-95%. Moreover, a report by Jed Williams from a local & small business locator, Manta.com found that 61% of the small businesses surveyed indicated more than half of their revenue comes from repeat customers and that repeat customers spend 67% more than a new customer.

A final statistic provided by Lee Resource Inc. should give you plenty to think about: Attracting new customers will cost your company 5 times more than keeping an existing customer.
At this point you should be convinced that you should never underestimate the value of retention and it should be a priority in our marketing strategy.

When thinking about retention, the first ideas that come to our mind are related to the importance of offering a great service support and to directly contact to customers by phone or through mailing campaigns with new offers. Clearly, these are key in our retention strategy, but what about our website? What is its role in our retention strategy?

In a previous post, Optimizing Your Visitor’s Journey, I basically proposed to apply the customer-centric methodology of David Skok to analyze and remove blockage points on the marketing funnels. Then, in Optimizing Your Website For Customer Acquisition, How to Create a Great First Experience in Your Website, and How to Improve the Checkout experience posts I proposed A/B testing ideas to improve your website in the firsts two steps of the funnel: Acquisition and Activation. In this post, we’ll focus on new ideas for the retention of your customers following a similar schema to the previous ones.

Retention in the Marketing Funnel

First Step: Identify Concerns of Your Customers

If one of your customers, after signing-up for a free-trial of a service or after having bought a product, quickly has unsubscribed or has never bought anything else, what have been their main concerns or reasons to do so? Usually, after buying a product in a e-commerce, you’ll probably never buy something else because:

  • The product that you bought was not as expected.
  • You needed that product, but nothing else.
  • You needed that product and you didn’t find it in other websites.
  • You had a very bad experience during the buying process.
  • You are not sure if you know how to install the product (you’d need some instructions or help!)
  • You don’t know how to use the product you just bought.
  • You have a question about the purchase, but you don’t know how to get in contact.

Now, instead of thinking of an e-commerce, let’s consider that you’ve found some very valuable information in a website or blog. The reasons for your never visiting that website or blog again may be:

  • You were interested in that information, but you needed something else that was not in that website.
  • It seems interesting, but you would like to share your concerns with others.
  • They also offered you to download a file/e-book but, it did not contain the information expected.

Once we have identified the main reasons for not repeating visiting our website, let’s go to analyze what may motivate our customers to overcome their concerns.

Second Step: Identify Motivation of Your Customers

What would be the motivations to repeat your previous experience?

  • It really solved your needs!
  • The experience of buying was so satisfactory that, surely you’ll come back!
  • They really offer new exclusive special offers for registered users or returning buyers.
  • They have such a great support service! You can even chat through the chat on their website.
  • You’ve always found some new interesting information, product, etc.
  • The information of the blog helps me to learn more about new ideas or tips to use the service.
  • The posts in their blog are very interesting, but the contributions with comments of readers are even more interesting.
  • You like that they offer you the possibility of mentioning your website, which may also improve your SEO.

As you’ve guessed, calling or mailing are not the exclusive ways to maintain the loyalty of your customers. Your website may also be a great alternative to engage them.

Third Step: Help Your Customers and Provide Solutions

In this step, you should be able to guess what could be a solution to their concerns and how your website my contribute to nurture your customer relationships, encourage customers to buy again from your website, expand your relationships by cross-selling and up-selling, and continually deliver on your value proposition and brand promise. By doing this, you can build some serious long-term loyalty. If your clients know you are prepared to go above and beyond, they will stick with you when competitors start knocking on their door.

Example 1: Thanking & Information instead of confirming completion

Let’s start with the following reasons or concerns:

  • You had a very bad experience during the buying process.
  • You are not sure if you know how to install the product (you’d need some instructions or help!)
  • You don’t know how to use the product you just bought.
  • You have a question about the purchase, but you don’t know how to get in contact.

And the following motivations:

  • It really solved your needs!
  • The experience of buying was so satisfactory that, surely, you will come back!

I already commented in a previous post (Optimizing Your Website For Customer Acquisition) that customers like to be reassured that there is no risk on the buying process, the product will arrive in a fit and proper state, it’s secure, there’s money-back guarantee, … I’ve also give you some ideas to grant that the customer won’t have any bad experience in the checkout process in How to Improve the Checkout Experience. Is this all? Can we do anything else for our customers to provide them a really good experience?

Suggested A/B Tests:

For purchase completion try an A/B page experiment with different versions of Thanking instead of simply confirming completion. See as example, one of our alternatives of our Thank You page:

Thank You Page of Nelio A/B Testing
Thank You Page of Nelio A/B Testing

Example 2: Surprise & Delight Your Customers

Continuing with the same concerns and motivations of above, let’s see what other friendly gestures may engage your customers. Surprise and delight your customers is not an easy task: as described by Brian Handwerk in the article How to Give the Best Gifts According to Science, receivers really value convenience, feasibility and ease of use in a gift.

Suggested A/B Test:

Create an A/B Page experiment of the checkout page with different alternatives: giving either a discount for next purchase, a coupon with some certain value, a free shipping, and so on…

Mockup of Alternative Thanks Page with a Gift
Mockup of Alternative Thanks Page with a Gift
Mockup of Alternative Thanks Page with a Gift
Mockup of Alternative Thanks Page with a Gift

Example 3: Upselling, Cross-selling & Downselling

Look now at the following concern and motivation:

  • You needed that product and you didn’t find it in other websites.
  • They really offer new exclusive special offers for registered users or returning buyers.

An upsell is a sales technique whereby a seller induces the customer to purchase more expensive items, upgrades, or other add-ons in an attempt to make the sale more profitable. Upselling usually involves marketing more profitable services or products by simply exposing the customer to other options that were perhaps not considered.

Typical upselling example is: a customer purchasing a computer being up-sold an extended warranty, more storage capacity, a bigger, higher-res screen…

Cross-selling is the action or practice of selling an additional product or service to an existing customer.

Typical examples of cross-selling are travel agencies: when you book a flight, you’ll also receive suggestions of hotels, rental cars, and other travel related services.

The down-sell is, as the name implies, offering a product at a lower price. This is an excellent way to ensure that you are getting everything the customer wants to spend, while still providing them with a greater advantage in the process. Car dealers down-sell all the time. They offer a car model until you see the price tag; rather than missing out on a sale altogether, they then suggest a similar car with similar features but at a more affordable price.

Be careful with upselling and cross-selling! You must ensure that your relationship with your client is not disrupted. Depending on your business, your customer’s perception of the attempted upsell can be viewed negatively and impact the desired result. It’s important for a good upsell and cross-sell to convince customers that the offer will make their lifes a little bit easier.

I recommend the reading of Intelligent Upselling by Mike Waite, where he recommends that intelligent upselling and cross-selling doesn’t just increase customers spending one time. It enhaces the guest experience in a way that converts to greater satisfaction, loyalty, and referrals.

In general, these techniques are better used in recurrent customers who already trust in you and may appreciate your recommendations.

Suggested A/B Test:

Create an A/B Page experiment of the checkout page for recurrent customers with an alternative including an upsell or cross-sell of your product or service.

Mockup of Alternative Page with Cross-selling
Mockup of Alternative Page with Cross-selling

Example 4: Collect feedback from your customers

Let’s now consider the following concerns:

  • You were interested in that information, but you needed something else which was not in that website.
  • They also offered you to download a file/e-book but, it did not contain the information expected.

Sometimes, your are not able to offer the solutions that your customers need for the simply reason that you don’t know what are their preferences. You may ask them by directly contacting them by phone, by e-mail, by asking them to fill a survey. However, why don’t you try to ask them in your own website?

Suggested A/B Test:

Create an A/B Widget experiment with different versions of opt-in forms to ask for contributions of your visitors or customers. Alternatively, you may consider offering a gift for their contribution.

Page with an alternative opt-in form
Page with an alternative opt-in form
Page with another alternative opt-in form
Page with another alternative opt-in form

In general, I recommend to use this type of experiment for recurrent customers who already trust you. Keep also in mind that the survey on your site should contain just one or two highly relevant questions to the page it’s being displayed on. You’ll get much better feedback this way.

Example 5: Blogging 

Finally, let’s consider the following concerns:

  • You’ve always find some new interesting information, products, etc.
  • The information of the blog helps you learn more about new ideas or tips to use the service
  • The posts in their blog are very interesting, but the contributions with comments of readers are even more interesting.

I’ve already mentioned in the post Optimizing Your Visitor’s Journey that once you’ve got a customer, the next objective is to keep the customer engaged in your product or service so they continue to gain value from you and remain a customer.

Blogging is integral to your online content marketing strategy. It’s an important tool for developing better customer relationships and, in addition, it drives traffic to your website, increases your SEO/SERP and positions your brand as an industry leader.

To ensure what posts engage more to your customers, I recommend two different types of experiments:

Suggested A/B Test:

Perform as many Headline experiments as you can of your most relevant posts. Remember that you may find plenty of tips about what works best in a headline. Some examples are the post of Jeff Bullas 10 Awesome Headlines that Drive Traffic and Attract Readers, or the one from Courtney Seiter 8 Winning Headline Strategies and the Phsychology Behind Them, among others.

Heatmaps:

In addition to headline testing, heatmaps offer valuable information about what our visitors do, whether they land to our website or read any post.

Screenshot showing a heatmap created by the Nelio A/B Testing service.
Heatmaps are one of the most powerful tools available to comprehend what users do in your website.

In fact, as described by David Aguilera in What Heatmaps Teach Us, heatmaps are a perfect tool for retaining your customers, detecting what your users are not doing and detect flaws in our design.

I hope you now have a better idea that your website should be seen as important channel to keep the loyalty of your customers and retain them.

Please, feel free to add any comment or suggestion!

You may be interested in the full series that shows you the importance of conversion rate optimization through all the marketing funnel and provide different ideas and examples to improve your website:

  1. Motivation – Optimizing Your Visitor’s Journey
  2. Acquisition Optimizing Your Website for Customer Acquisition
  3. Activation (I)How to create a great first experience in Your website
  4. Activation (II)How to Improve the CheckOut Experience
  5. RetentionHow to Retain Your Customers
  6. RevenueHow to Increase the Revenues on Your Website
  7. ReferralsHow to Improve Your Customers Loyalty and Referrals

Featured image: Picture of Butterfly by Scott Ableman

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