The Antidote to Skyrocketing Acquisition Costs? Retention

Advice

A question we’ve been answering a lot lately is how much brands should be focusing on customer acquisition right now. And it’s a great question — costs are skyrocketing; competition keeps rising as more eCommerce brands enter the space; and economic uncertainty is impacting consumers’ spending habits.

The short answer? Brands absolutely still need to focus on acquisition, but it’s a shortsighted strategy not to have a heavy emphasis on retention as well.

A recent Yotpo survey of 2,000 consumers found that more than 51% are spending less due to news about the economy. That’s bad news for eCommerce brands, but there’s a silver lining: more than 82% of them said they will still buy from their favorite brands. Brands that double down on turning first-time shoppers into loyal customers will be better positioned to succeed no matter what the eCommerce industry or global economy throws at them.

To boost customer retention, it’s important to focus on building relationships. Here are some strategies that will help you foster those connections, so you can make sure you’re maximizing the return on every dollar spent on acquisition.

Deliver value through your loyalty program.

Having a basic loyalty program with points for purchase is table stakes. Build out a program that truly delivers value to your customers, and communicate that value clearly to get them to join. Offer them access to perks they wouldn’t otherwise get, like free shipping, early access to sales, and most importantly, personalised experiences. Use a tier-based loyalty structure, where the rewards get better the higher they go, so customers get more incremental value the more they shop.

Incorporating referrals into your loyalty program is an effective, low-cost way to boost organic acquisition and retention at the same time. By giving rewards to both the giver and the receiver of a referral, you’re giving double the incentives to purchase again and again.

Offer your customers subscription options.

Encourage shoppers who buy replenishable products, like skincare, beauty products, food and beverages, to sign up for subscriptions. Subscriptions are a win-win for brands and customers alike — brands get a predictable, recurring revenue stream, and customers get ease and convenience for buying the products they use most often. You can even offer loyalty points to your happiest customers to incentivise subscription sign-ups.

Subscriptions work for more businesses than you probably think, too. Don’t sell replenishable products? Consider a curated monthly subscription box. You can also use the access model, and offer consumers exclusive products, discounts, and other perks for a subscription fee.

Lifestyle brand Jill & Ally’s “Crystal Candle Club” is a curated monthly box with seasonal candles and crystals and other perks. Members also get early access to new launches, exclusive sales, and surprise products. With this subscription, the brand gets to showcase some of their best selling products in a way that generates customer excitement.

Build long-lasting trust with social proof.

Most brands think of customer reviews as an acquisition tool, but the quality of your customer feedback affects more than that first conversion. The more detailed the reviews, the more informed the purchase. That means a higher likelihood that a customer buys the right product for them — in the right size, color, etc. — and a higher likelihood that they’ll be satisfied with that purchase, and want to come back again. An added bonus: happier customers make fewer returns.

Ask customers to submit photos or videos with their reviews. This helps get shoppers over the main hurdle when it comes to shopping online — not being able to experience the product in real life. Seeing clothing on someone with the same body type, or makeup on someone with the same skin tone could turn a would-be browse abandonment into a conversion.

One example of a brand using effective social proof is skincare brand Barefaced. They display “Before and Afters” on their site using real customer photos. There’s a lot of skepticism around the efficacy of skincare, and Barefaced helps win customer trust with authentic user-generated content.

Use SMS for 1:1 personalized communication.

The best way to reach and retain consumers is with a channel that’s as mobile as they are: SMS. SMS marketing can easily drive your brand’s retention strategy forward, allowing you to foster loyalty and maintain a direct line of communication beyond the point of sale. SMS helps brands get in front of customers quickly, respond to real-time behavior like cart abandonment, and keep customers engaged post-purchase.

SMS is effective on its own, but it can be used in tandem with your other marketing strategies to drive more sales and retention. Send texts with loyalty updates, review requests, and information about upcoming subscription deliveries to keep your brand top-of-mind in between purchases.

Show your customers what you stand for.

Our research shows that more than 84% of global consumers prefer to shop with a brand whose values align with their own. And that number is even higher for Gen Z, at over 90%. Shoppers want to support brands who stand for something, so it’s important to communicate your brand values at every touchpoint.

Some easy ways to let customers know you care include:

Having a page on your website that clearly lays out your commitments
Giving customers the chance to donate to causes you support at checkout
Creating campaigns around holidays like Earth Day or Giving Tuesday where you donate a portion of sales to relevant charities.
Incentivize donations or charitable actions through your loyalty program

Showing customers that you care about your business’s impact will go a long way toward earning their loyalty.

Sustainable clothing brand tentree makes their commitment known in everything they do, from the name of their brand — they plant 10 trees for every item sold — to letting customers measure their impact through their loyalty program and tree-planting subscription offers.

At the end of the day, retention is about relationships. Focus on building those relationships through engagement, delivering value, and fostering an emotional connection, and you’ll be able to turn every new visitor to your site into a loyal brand advocate.
Learn how Yotpo’s eCommerce marketing platform helps brands boost retention through connected solutions for reviews, SMS, loyalty, subscriptions, and more.