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For every company there is a moment of truth: 'What do we do now, shall we focus on acquisition OR focus on retention?' The first strategy results in one-time revenue, while focusing on retention provides loyal customers which bring long term profitability. Or in other words: if your webshop is solely focusing on traffic, then you are losing money, my friend.
Focusing on acquisition puts efforts on brand awareness: the 'who are you?' questions. Focusing on retention however, puts effort on creating loyal customers and on the questions:
- What are you?
- What about you and me?
- What about our future?
When done right, focusing on retention will help you achieve customer-based brand equity.
A slice of theory
Kevin Lane Keller is a renowned brand management professor. He developed the Customer-Based Brand Equity model (CBBE), which explains the basic steps to develop a brand that achieves highly loyal customers. This framework has been of extreme inspiration for me in the past because it explains how and why customers perceive that a certain brand is worth more than the product/service itself. It is the reason to choose against competitors and a reason to re-purchase. Thus, the CBBE model is a strong foundation of the whats, hows and whys of the benefits of having a strong brand.
On Keller's CBBE model, awareness is the first necessary step because people need to know your brand before they become a customer. However, the brand efforts should move up the pyramid to generate favorable, strong and unique brand associations, which generate positive attitudes and experiences that start a customer-brand conversation.
The reward is priceless: a loyal customer.
What is happening in digital
Inbound marketing is one of the magic words in digital this year and great numbers of webshops are only focusing on generating traffic. Indeed, inbound marketing might help you bringing visitors to your website. However, you should take into account that:
- The majority of these folks leave after their first visit
- A visitor returns various times before converting
- Meaning that an average conversion rate is around 2%
So congratulations! After all these efforts in SEO, SEA, PPC, Adwords... you made one customer! Well done!
But now what? Do you leave it here? Because this is the end of the story if you only focus on traffic.
If you are one of those companies that are more focused on acquisition than on retention, , you might be asking yourself:
- How can we re-convert this one customer?
- How can we switch from a one-time sell into repeated purchases?
- And by doing so, achieving long term profitability?
Webshop's gold mine. Always be relevant!
Do not stop your marketing efforts after one sale!
As a webshop, the data that you have from your customers is a gold mine. What if you could use that data for marketing & sales purposes?
The key to get the gold: always be relevant!
- Relevant in content
- Relevant in time
- Relevant in the communication channel
When you target customers via the correct channel, with meaningful (personal) content and at the right time, your message will always be highly relevant. Your messages bring value to the customer, you are different from competition and are a reason to re-purchase. All thanks to that data, what you know about them!
Key channel for ecommerce
Email marketing is a powerful channel for ecommerce. With the right software, a webshop can create detailed segmentations and launch tailored campaigns that add value to the customer.
Obviously, every campaign must be relevant in content and time. It is very important to be relevant in content and accurate in time because this is fundamental to get higher open rates. There is nothing worse than getting a worthless / meaningless email (unless your name is 'spam folder' OR 'unsubscribe link').
As a tip, you could start with these retention campaigns:
- Cross & upselling campaigns
- Win-back campaigns: re-engage if not bought X numb of days/months
- 3rd, 5th, 10th customer order
- Abandoned shopping cart emails
- Warm up campaigns, for seasonal promotions
- Send timely emails for routinely purchases
As a webshop, this is what you need
So it all comes to the question:
'As a webshop, what do I need to launch retention campaigns?'
1. You already have that valuable customer data. 1. Now, you must enrich the information from your customers. For example with an online survey, a web form & understanding their interaction in the emails.
2. You need a software that:
- Enables your webshop to use that valuable data for marketing purposes
- Approaches the customer from different channels
- Automates the (customer) enrichment of information
- Is flexible, so you can design the structure of your database
- Automates campaigns, so you save time & resources
- Integrates with your eCommerce, CRM, CMS system(s)
- Is capable of advanced & dynamic segmentations
- And of course, which has powerful personalization capabilities
So, take a look on your database and your email provider. Which data are you using at the moment? How could you be more profitable by using relevant data? The possibilities are endless.
In the end, it is up to you. But keep in mind: if you're still focusing only on traffic then you are losing money.