At Pinguin, we’re all about consumer retention marketing. In this article we’ll go through the topic of consumer retention, specifically, the why, as in why retention marketing is important to all businesses. The how, meaning how you as an e-commerce merchant can avoid sales funnel drop-off when working towards re-activating said consumers.
Why your customers retention is important
Most importantly, consumers not re-activating will hurt both your growth and your profit margin. The average business loses somewhere around 20% of its customers annually, simply through not paying enough attention to its relation to the consumer. Your company’s growth journey can become a lot easier if you would lose only half of that amount.
Profit margin medicine
In terms of profit margin, especially in relation to running an ecommerce business, consumer retention becomes even more important. Cross-sector figures talk of how it is up to ten times as expensive to convert a new customer compared to an existing one. However, those figures don’t look into the field of e-commerce at any depth. In e-commerce, these figures are even worse. This is because of the online customer journey being controlled by advertisers like Google and pricing comparison websites, for example.
Don’t lose them in the first place
So, what are we to do to increase consumer retention then? Well, the most simple tactic for both keeping the customer, and growing your SOW (share of wallet) with every customer, is to never lose the customer in the first place.
Of course that’s not a complete answer to this question in any shape or form, but it is really very simple. You should increase your budget for specifically targeting existing customers, because you’re probably not putting in enough resources right now, which is why you are interested in this subject of topic in the first place.
The customer loyalty program
Our recommended way is of course to put some time/money and effort into creating an addictive rewards program. The rewards program goes hand in hand with customer retention, and this is especially true when working in e-commerce. Loyalty programs allow for you to give your customers the right incentives to continually choose your service instead of competitors. With strong enough incentives, you can modify the customer journey, meaning, avoid the costly re-targeting and acquisition marketing tools (Google Adwords, Facebook Ads), and instead create paths through emails and other forms of owned communication mediums.
How can Pinguin help me elevate my customer retention?
Pinguin is a Magento 1 and 2 Loyalty Program provider, that integrates with the Magento standard SMTP. In this way, you can use the standardized Magento email function, but set up triggers with lots of consumer data to back your assumptions of who should be getting what emails at what specific time. Among lots of other things, it is also possible to set different pricing in campaigns towards customers placed in different levels of the loyalty program. Give us a call or book a demo on site to find out more about Pinguin.