Ecommerce Panel, Week 2: Increase Loyalty and Retention Through Personalization

As we roll into week 2 of our Ecommerce Panel, it’s time to talk customer loyalty and retention during the busy sales season. This week’s guest post comes from Demac Media, where they discuss valuable strategies to ensure your customers come back during – and long after – the holiday sales boom…

During retail’s busiest months (September – December) consumers are making lists and checking them twice, to buy gifts or treat themselves to something nice. This uptick in consumption habits of course means an increase in traffic, and ultimately sales for most retail businesses.

For months you’ve been preparing your campaigns to bring old and new holiday shoppers to your site, or in-store, do their seasonal shopping. Your hard work shouldn’t stop there though!

Even during the holiday sales season consumers are demanding exceptional experiences, throughout the customer journey.

Retailers will see an influx of current and new customers during this time period, and you’ll want to focus on not only driving sales to be in the black, but also increasing the value of current customers and keeping new customers. The average eCommerce store devotes more than 80% of their marketing budget to acquisition, forcing retention to take a back seat – even though 40% of an ecommerce store’s revenue is created by only 8% of its customers.


So how can it be done? Personalization!

Personalizing the online shopping experience is not by any-means a new concept, but it will help you increase customer loyalty and new shopper retention rates. The good folks at McKinsey even developed a personalization value equation that highlights the key issues that retailers need to address:




The Importance of Building Customer Loyalty

Having a loyal following of customers is worth A LOT to your business, but it will also be one of your biggest challenges to overcome. A 5% increase in loyalty can drive the avg. revenue per customer up 25-100%! Especially during the holiday season, you should be looking to help increase the loyalty of your current customers.


Before you can begin, ask yourself the following questions – Are you…

  1. Aligning your offering with the needs of consumers?
  2. Communicating in a way that your customers understand?
  3. Being human?
  4. Making the shopping experience seamless across all channels
  5. Using the data that you’ve collected?

Next you should have already taken the following steps to get your customers more comfortable with your personalized shopping experiences (because no one likes a creeper!). Have you:

  1. Built Trust?
  2. Increased awareness?
  3. Communicated your value?
  4. Remained transparent?
  5. Followed security best practices to protect your customer data?

Then you’re ready to boost customer loyalty!

Personalization Actions That Drive Customer Loyalty

  1. Allocate more marketing budget on your most engaged customers.
  2. Adapt your customer experience based on past preferences.
  3. Personalize the holiday campaigns you send to your most loyal current customers.
  4. Offer a balance of hard (monetary discounts) /soft (experiential opportunities) benefits to customers.
  5. Mind your manners and say “thank you” to help increase customer loyalty.


The Good and Bad News of Holiday Retention

What a lot of companies forget to think about though, is that you’ll want to keep the business you got over the holidays going consistently for the rest of the year!

Did you know that it costs 16x more to bring a new customer to the level of a current one? Not to mention your returning customers spend up to 3x more at your store than one-time customers.

The good news is that customers will be easier to acquire during the holidays.

The bad news is they’ll be harder to retain.

The real journey for you starts after the first purchase is made. Unfortunately, lots of brands/retailers forget that customers are buying for people other than themselves for the most part. According to RJMetrics, holiday customers have a 13% lower CLV. This means it will be more difficult to keep them coming back – but not impossible!

In an analysis of data from the 2016 shopping season RJMetrics also found that the probability of a customer making a second purchase is highest during the first 30 days, then falls off throughout the year.

If you want new holiday shoppers to purchase again, you need ideally want to remarket to them before mid-January or within 30 days of their first purchase. Increase the odds of retaining their business during and post-holiday season, using these retention marketing tactics with sprinkle of personalization to keep them coming back for more.


How Retailers can Turn One Purchase into Many More with Personalization

1. Email Marketing is your best retention tool

To power business growth you need to implement a marketers favorite tool – email. Loyalty driven personalized email content drives more revenue and higher rates of transaction per customer. What customers really want is relevancy first and foremost.

2. Personalized overlays

Don’t be basic in your content! Guide your customers toward information and content that highly relevant to them. The higher the relevancy of what you’re showing them, the more likely that they’ll return to your site. Be powerful and persuasive.

3. Offer a buyer’s discount

Reward your new shoppers. Did they buy something from you on Black Friday? Show them a little love with a buyer’s discount on their next purchase. Even better, put a time limit on the discount to add a sense of urgency. If they bought on Black Friday Cyber Monday, get them to come back before the New Year.

4. Have a loyalty program

Signing-up for a loyalty program locks in customers, and makes it harder for them to go to a competitor once they’ve started shopping with you. More purchases = more rewards, who doesn’t love that?!

5. Open the lines of communication

Online, conversations are a two-way street. Encourage your new shoppers to communicate with your brand, and your community. Ask for their personal suggestions and input. By opening this line of communication shoppers will feel like you truly care about meeting their needs.


Personalization in 2018 and Beyond

While all these tactics will help you achieve lift during the holidays, your efforts shouldn’t stop when the New Year begins.

To futureproof your business, these are some key points to remember as we move into 2018 and you continue refining your personalization efforts:

  • Data is the most important part of your success. Having the right data will help you understand your shoppers and their behavior, which in turn will help you create more successful marketing campaigns, and exceptional experiences.
  • Reward those customers who have been most loyal to your business, they’ll spend more with you and keep coming back throughout the seasons.
  • Acquisition will be a breeze during the holidays, but retention should be your primary focus.

 About Demac Media

Demac Media is a commerce agency across platforms – Magento, Workarea, and Shopify Plus – to help high-volume brands, retailers, and merchants sell anything anywhere. Over the last 10 years we’ve helped build 100+ customized commerce solutions. We work in close collaboration with our clients, from initial scope to final delivery to help them plan, build, and grow!

For more actionable insights download Demac’s 40+ holiday prep ebook – The Retailer’s Guide to the Galaxy Holiday Season!

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