Every website owner understands the importance of SEO to attract visitors to their site.  Some businesses spend hundreds, if not thousands, of pounds on marketing and promotional campaigns to get their websites seen by the right people, at the right time.

But what about your existing customers?

Are you taking steps to ensure that people who have already made a purchase with you will want to return?

This is where customer retention comes into play, and it could have a profound effect on your overall profits, so if your business doesn’t already have a retention marketing strategy, this is something that you need to know about.

Why customer retention matters

You’ve spent time and money attracting a customer to your site, whether it’s through SEO, PPC or other form of advertising, so why not capitalise on your initial investment once your new website visitor has made a purchase?  Rather than focussing all of your efforts on attracting new visitors to your website, – important though that is – you need to consider the CLV (Customer Lifetime Value) to your business that follows their initial interaction with your site.

Keep in mind that retaining customers is cheaper than acquiring new ones, so it makes sense to capitalise on your initial investment.  And that means developing an effective retention marketing policy tailored to your exact needs.  The tactics that you employ will depend upon the type of business that you run: obviously someone who sells high-value items, such as cars, will need a very different strategy from someone selling pet food, which will be a regular purchase – you just need to make sure that they return to your store next time, whether that’s next week, next month, or even next year.

Another factor that will influence your retention marketing policy is how long your business has been established.  New businesses will need to focus the majority of their marketing budget on attracting new customers, whereas a business that is already established should direct a greater proportion of available funds on retaining the current customer base.

Know your customers

In order to establish an effective customer retention strategy, you need to understand how your customers are currently interacting with your brand.  Do you know how many customers are returning to make another purchase, for example, or how much they tend to spend on average on each visit?  Even the frequency of their purchases can have an impact, so it’s vital to examine the relevant metrics to understand your customers’ behaviour patterns. Some e-commerce platforms, such as Shopify, provide you with these figures, making it relatively simple to analyse the data and see where there is scope for encouraging your customers to visit your online store more often, and purchase more of your products.

Developing an effective retention marketing strategy

Whether you sell large or small items, and whether these are occasional or regular purchases, there are lots of ways that you can engage with your customer, encouraging them to return to you in the future.  Loyal customers make for healthier profits and could earn you additional word-of-mouth referrals into the bargain, so it’s a win-win situation for your brand.

Consider an online clothes store where a new customer has just purchased a dress.  You could target them with an email a few days later, offering them free postage on their next order, invite them to review their new dress, or send them a newsletter with links to new stock that may be appealing to them. You could even offer your customers a loyalty program, offering rewards every time they make a purchase from your site.

And what about those abandoned shopping carts that are so common in online stores?  A well-thought out email reminding them that they have items waiting to be purchased could be just the nudge that’s needed to encourage them to complete their purchase.  Perhaps you could offer them a discount too?

Your overall retention marketing strategy will be governed by numerous factors, but whatever your type of business, there’s so much to be gained from encouraging new customers to become regular customers.

According to Gartner, a leading global research company, just a 5% increase in customer retention leads to an increase in profits of up to 125%. That’s a figure that’s hard to ignore!