Top Customer Retention Strategies for 2022

Sep 13, 2022
  • 86% of surveyed customers said they would stay loyal to a business that actively welcomes them. 

  •  75% of consumers prefer companies that have some sort of loyalty program.

  • A seamless digital experience can not only drive growth but also cut expenses and boost loyalty by an astounding 80%.

  • Approximately 63% of customers would rather purchase from purpose-driven brands.

Let’s face it. Staying competitive in the digital age is no easy feat, especially when brands are constantly trying to convince consumers that their products are superior to others’.

While it is not wrong for businesses to focus a great deal of their marketing efforts on attracting new customers, it is equally if not more crucial to nurture the ones they already have. After all, customer retention has been proven to be much simpler and cheaper than customer acquisition. According to a study by Frederick Reichheld of Bain & Companyincreasing customer retention by just 5% can result in profit growth of up to 95%!

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With these statistics in mind, we have compiled a list of the best customer retention strategies that e-commerce companies nowadays are using to inspire customer loyalty. From offering membership programs or referral programs to prioritizing customer service, we will cover a range of tactics that can help any business succeed.

Retain Customers with a Smooth Onboarding Process 

The importance of onboarding has long been underestimated in terms of its impact on customer retention. Even today, many HR professionals still regard them as two separate processes that have little to do with each other. In reality, however, onboarding represents a make-or-break-process — one that can ultimately retain customers and reduce consumer churn down the road. It is critical to set customers up for success from the start as 86% of surveyed customers said they would stay loyal to a business that actively welcomes them

Zendesk is one company that does a fantastic job of onboarding by giving their new customers a whole slew of resources to get familiar with their product based on their varied needs. For instance, they kick things off with a series of onboarding emails with tips for getting started as well as recommended next steps. This way, Zendesk is able to ensure that users understand the true value of their product(s), thus increasing the likelihood of them sticking around for the long haul.

Reward Promoters and Loyal Customers

Did you know that 75% of consumers prefer companies that have some sort of loyalty program? With so many e-commerce sites selling similar products, it is definitely a smart move to design a unique rewards scheme that differentiates your business. When you provide points and/or discounts in return for their money spent at your store, you are essentially making shoppers feel like VIPs, thus enticing them to become brand advocates.

In 2016, ASOS launched an A-list loyalty scheme following in the footsteps of its competitors such as Boohoo and Missguided. Under the program, every dollar spent would contribute to a point and after accumulating 500 points, a customer can receive a reward to offset his or her future purchases. Smashbox is another retailer that is known for its one-of-a-kind membership program. True to its tagline, “the more you spend, the more you gain,” the company encourages its satisfied customers to spend even more by giving them the option to exchange points for cash.

(Image Source: Sprout Social)

Offer Shoppers a Seamless Digital Experience 

A seamless online experience is among the most basic expectations of today’s consumers, with 65% of them revealing their preference for brands that offer quick and easy transactions. When done right, a seamless experience can not only drive growth but also cut expenses and boost loyalty by an astounding 80%.

Amazon is one of the many merchants that have placed a huge emphasis on creating a seamless online experience for its customers. Just recently, the retail giant has adopted Mastercard’s tokenization technology to ensure that the cards consumers store on file are updated seamlessly. As network tokens do not have an expiry date, it eliminates the hassle of re-entering their credentials while simultaneously minimizing the odds of interruptions during checkout.

Make Customer Service a Top Priority 

There is no denying that customer service is one of the most effective customer retention strategies for any business out there. This is because satisfied customers are more likely to return for repeat purchases and also spread the word to their social networks, thus bringing in new customers as well. 

Most people in the retail industry are familiar with Zappos and the extreme lengths they go for their customers. Just for starters, Zappos responds to every email it receives, even if it is addressed to the Chief Executive Officer. Over the pandemic, Zappos even created a hotline for customers to call and chat with their support team about anything under the sun. The good news is that providing good customer service is not as complicated as it may seem. With the help of marketing and social media management tools like CRM and Sprout’s Smart Inbox, retailers can now keep tabs on customer enquiries, complaints and whatnot without burning resources excessively. Many companies have also integrated call center technologies into their customer service strategy, and it has been proven to be one of the effective methods to communicate with customers. 

Meanwhile for Nespresso, prioritizing customer service comes in the form of creating excellent post-purchase experiences. With the help of Parcel Perform’s streamlined data from over 700 carriers, Nespresso is able to provide users with accurate tracking updates across all continents. Following the launch of its track and trace webpage, Nespresso observed a 45% decline in calls made to their customer relationship center, which indicates an overall improvement in customer satisfaction levels.

Highlight Strides Towards Corporate Social Responsibility 

The rise of conscious consumerism in recent years has put companies under immense pressure to work on fulfilling social responsibility. Corporate Social Responsible (CSR), in simple terms, refers to “a business’s obligation to purchase achievable and good long-term goals for its people and the world at large.” 

With the younger generation increasingly looking for ways to give back to society, it is more vital than ever before for businesses to stand up for issues that matter to their customers, as a way to build loyalty on a more personal level. As a matter of fact, research done by Accenture showed that approximately 63% of customers would rather purchase from purpose-driven brands.

Take global shoe brand TOMS, for example — one of the most recognized brands internationally when it comes to CSR. For every TOMS clothing purchase made, a specially designed item of the same kind will be donated to a US homeless shelter as part of the company’s “one for one” business model. Today, TOMS invests one-third of their profits in grassroots organizations that are creating change at the local level for 3 focus areas – namely, promoting mental health, ending gun violence, and increasing access to opportunity.

Leverage Post-Purchase Notifications to Retain Customers

In order to keep customers coming back, brands need to ensure that they are providing a great shopping experience from start to finish. One way to do this is by leveraging shipping notifications to enhance their post-purchase experience.

Shipping notifications refer to automated emails or text messages that are sent to customers throughout the different phases of the order fulfillment process. Some examples include a dispatch message, a "parcel in transit" update, a failed delivery notice and so on. While the type and frequency of such notifications may vary from brand to brand, all of them serve the common purpose of keeping customers in the loop. After all, the waiting time between order placement and delivery is one of the best times to build trust and brand loyalty with existing customers, so why not leverage shipping notifications to offer value instead?

Having said that, shipping notifications can do way more than just update customers about their parcel whereabouts. E-commerce business Chewy, for instance, does an exceptional job at communicating potential shipping delays through its suite of transactional emails (i.e. order and shipping confirmations), especially ahead of the peak shopping season. They even went the extra mile to send out additional emails to explain their situation and apologize for the shipment delays.

Leverage Post-Purchase Notifications to Retain Customers. - Chewy

(Image Source: Klaviyo)

Finding the Right Customer Retention Strategy for Your Business

Needless to say, there is no one-size-fits-all solution when it comes to choosing the right customer retention strategy. Just as every customer churn is caused by a different reason, not every retention strategy will work well for every business. While the implementation of a smooth onboarding process may be possible from the very beginning of your business launch, a loyalty program will only be successful for companies with a steady customer base. With that being said, the most important thing is to keep your customers’ needs in mind and focus on developing an unbreakable bond between them and your brand.

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