Wise retailers know their best customers are a competitor’s top prospects. That’s one reason why tracking your customer retention rate – and putting retail marketing strategies into place to improve it – is essential for retail success. The other reason? Increasing your customer retention rate by 5 percent increases your profits by an estimated 25 to 95 percent.
Loyal customers do more than make regular purchases. As retailer-to-customer relationships deepen, loyal customers refer others, demonstrate immunity to offers from competitors, and go out of their way to be served by you. With each repeat visit to your store, you have an opportunity to add value for the customer – and your business. The likelihood of making a sale to an existing customer is 60 to 70 percent. Those are much better odds than making a sale to a new customer, where the success rate is only 5 to 20 percent.
Various retail marketing strategies to drive more repeat customer business and deepen loyalty make good business sense, and they all start with your point-of-sale (POS) data. Monitoring regular reports of your best customers, purchase frequency, and repeat customer rates gives you valuable insights into buyer behaviors and opportunities to incent those behaviors through targeted marketing. Here are four marketing strategies proven to inspire repeat purchases.
1. Give thanks.
This one seems like a no-brainer, but a sincere thank you strategy can be a real differentiator. Customers want to feel noticed, and sending a post-purchase thank you can help reinforce a good customer experience. In today’s busy and sometimes impersonal world, customers are nearly five times more likely not to return if they think a retailer is indifferent to them, rather than because of product dissatisfaction.
Start by collecting email addresses as part of your checkout experience. As a first step, send personalized thank-yous to new customers. The message can be simple – thanking them for their purchase and inviting them back to shop again. Consider including a new customer discount offer to be used on the second visit.
2. Reach out regularly.
Build an email program that enables you to reach out to customers on an ongoing basis. But don’t go with generic messages. Instead, create a trigger strategy that personalizes messages based on purchase anniversaries or milestone achievements within your customer loyalty program. Go a step further by sending one-to-one messages suggesting products or services to complement something they bought or send tips for caring for or cleaning a product they recently purchased. And, of course, send birthday greetings with a promotional offer to help them celebrate.
Personalization pays off. Sixty-two percent of consumers say they feel happy or excited to receive and respond to personalized messages from a retailer. And 72 percent say they only engage with email marketing messages when they’re customized to match their interests. Your POS data makes personalization possible
3. Put purchases on repeat.
When you sell products that customers will use up, turn repeat purchases into a value-add service. Sending a reminder message timed to arrive when the customer is about to need to repurchase is a good idea. Giving them an option to opt in to automatically repurchase on a set schedule is a convenience customers appreciate.
Even if you don’t sell products that have built-in recurring needs, get creative. Offer a subscription service that delivers a craft kit each month. Or share sneak peeks on new products through in-store events or video messages – with special promotional offers – delivered exclusively to loyal customers.
4. Win them back.
If you’re producing regular customer reports through your POS system, you can keep your finger on the pulse of any changes in customer behaviors as they happen. Put the insights to work by building a retail marketing strategy aimed at dormant or lapsed customers. Reaching out to re-engage customers who haven’t shopped with you recently is an easy way to remind them what they’re missing. Give it a twist by personalizing the message to tie to past purchases, suggest items they might like, or offer a “we miss you” coupon.
Done well, these types of emails make your customers feel recognized and let them know you appreciate their business. Don’t make it a one-and-done effort. Define the appropriate timeframe for identifying customers as dormant. Then design an email strategy that reaches out on a few different occasions over time with options to re-engage. Test different offers – invite them to an event, offer a “we miss you” coupon,” or simply give them a heads up on what they’re missing by highlighting new product lines or recently added services.
Bonus: Let data empower retail marketing strategies.
Focusing some of your marketing efforts on improving customer retention can be a big win for the bottom line. Download our new guide, Data-driven Decisions: The Definitive Guide for Retailers, for more insights into how you can harness the power of data and drive business growth. And explore what’s possible with POSIM, a point-of-sale and inventory management system designed to help you take your customer relationships to the next level. Contact us for a demo today.