In the world of E-commerce Marketing, acquisition of new customers does not come cheap. The cost of attracting new customers is significant. The first page of Google is becoming difficult to crack; competition is high as brands with their content and social marketing efforts have set a high new benchmark along with rising cost of clicks. That is why it is important for e-commerce marketers to also shift their focus towards customer retention strategies.
Let us consider the example of cricket. A team may spend millions to train its batsmen and bowlers for playing in a world cup, but if it has none or a bad fielding capability it is prone to lose matches as the other teams will be able to easily score more runs. To be a winner, you need balance in your components. An equilibrium that makes you stable so that you don’t fall. That same applies to ecommerce. Rather than spending significant amounts in a competitive market attacking to score more customers, you also need to pay attention on your defense i.e. your existing customers.
According to a study of the Harvard Business School catering to your existing customers is potentially a more sustainable method to generate revenue and make it surge. A 5% increase in retention rates is claimed to increase the profits from anywhere between 25 to 95 %. But unfortunately, many online stores are ignorant to this fact and opt for the traditional strategy of trying to acquire more customers.
The following are more advantages associated with customer retention for you to consider:
- Revenue per visit
Repeat customers can produce anywhere from 3 to 7 times more revenue as compared to the first time visitors according to Adobe. This is an astounding fact and should influence online retailers to shift their attention to the customers they have.
- Predicting profits becomes more reliable
It will enable you to have more information about your customer and how they spend their money. This can lead you towards a more accurate forecast of profitability.
- Greater and better acceptance of price changes
A research has suggested that long-term and repeat customers are much less sensitive to changes in prices as compared to new customers.
- Loyalty breeds more customers
The fact is that if you are able to retain your existing customers, the more purchases they make instills a sense of loyalty in them towards your brand. Such customers are more likely to make referrals and recommendations.
These are all convincing arguments to opt for retention marketing but note that for best results, you should implement it alongside other modes of marketing. Also, if you are looking for an, searching it on Google might be a good idea.