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Return customers: Who are they and how to retain them?

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By Sam Nguyen

CEO Avada Commerce

Drive 20-40% of your revenue with Avada
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Return customers: Who are they and how to retain them?

Have you ever heard the saying “It’s cheaper to keep a customer than to find a new one”? It’s true! Return customers, also known as repeat customers, are the backbone of any successful business. These are the customers who have already purchased from your business and have decided to come back for more.

Why are these customers so important? Well, for starters, they’re more likely to spend more money with your business, refer others to you, and become brand advocates. In fact, studies have shown that repeat customers spend 67% more than new customers.

So, it’s clear that customer retention should be a top priority for any business. In this article, we’ll dive into who return customers are, why they’re important, and most importantly, how to retain them. We’ll cover strategies such as providing exceptional customer service, creating a personalized experience, offering loyalty programs, and encouraging customer feedback and engagement.

By the end of this article, you’ll have a better understanding of why customer retention is crucial to the success of your business, as well as practical strategies for retaining your valuable return customers. So, let’s get started!

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Understanding Your Return Customers

Retaining your return customers starts with understanding who they are and what they want. In the path to purchase, your target audience plays an important role as the decision maker or the supporter. To identify your target audience, your business needs to analyze customer behavior and preferences.

You can start by gathering data on their behavior and preferences. This involves gathering data on your customers, such as their age, gender, location, purchasing history, and browsing habits. You can also conduct surveys or focus groups to gain more insights into their needs and preferences. Customer data enables a business to identify a repeat customer. For example, customer loyalty metrics such as customer lifetime value, repeat purchase sales and customer retention rate can help your business to figure out repeat customers.

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Having the data to drill down to gain better insight into how each and every one of your customers spends can assist strategic decision-making about where you want your brand to be and who your core customer demographic is. By understanding the demographic, psychographic, and behavioral data of your customers, you can develop a customer persona that reflects your ideal return customer. A customer persona is a fictional representation of your ideal customer. It can help you to better understand their needs, desires, and pain points.

Creating a customer persona can also help you tailor your marketing efforts to attract and retain your ideal return customers. For example, if your customer persona is a busy professional who values convenience, you may want to offer express shipping options or a mobile app for easy ordering. On the other hand, if your customer persona is a budget-conscious shopper who values discounts, you may want to offer loyalty programs or special promotions. What kinds of offers you target in this group is an important question because when you optimize your spending by determining your repeat customers, you also need to consider what they respond to.

Once you have identified your customer personas, you can use this information to create a personalized experience for your return customers. This could involve tailoring your product offerings, marketing messages, and customer service to their needs and preferences. By doing so, you can build a strong relationship with your customers and increase their loyalty to your business. Understanding your return customers is the key to keeping them loyal to your brand.

Strategies for Retaining Return Customers

Now that you’ve identified your return customers and understand their preferences, it’s time to focus on strategies to keep them coming back. Here are some effective ways to retain your return customers as well as increase your brand loyalty.

  • Providing excellent customer service

Providing excellent customer service is crucial for retaining return customers. It’s not enough to simply offer a good product or service; customers expect to have a positive experience when interacting with a business. This is why investing in customer service can make a significant impact on customer retention rates.

By providing attentive, personalized support and actively listening to customers’ concerns, businesses can build strong relationships with their customers, which can lead to increased loyalty and positive word-of-mouth marketing. In addition, by demonstrating a commitment to addressing customer needs and concerns, businesses can improve their reputation and gain a competitive edge in the marketplace.

Going above and beyond to meet your customer’s needs will show them that you value their business and are willing to do what it takes to make them happy.

  • Creating a personalized customer experience

One size does not fit all when it comes to retaining return customers. Tailor your products, services, and communication to their unique needs and preferences. Remember the customer persona you created? Use it to guide your marketing and sales strategies to make your customers feel seen and appreciated. By customizing the customer experience, you can make each customer feel valued and appreciated, which can lead to increased loyalty and repeat business.

One way to create a personalized customer experience is to gather as much information as possible about your customers, such as their purchase history, preferences, and interests. You can use this information to tailor your marketing messages, product recommendations, and promotions to each customer’s individual needs and preferences.

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Another way to create a personalized customer experience is to offer exceptional customer service. Customers expect fast, friendly, and efficient service, and providing this level of service can go a long way in building customer loyalty. Make sure your customer service team is knowledgeable, responsive, and empathetic to customer needs and concerns.

In addition, providing a seamless and intuitive user experience across all touchpoints is crucial in creating a personalized customer experience. This includes optimizing your website and mobile app for easy navigation and checkout, as well as offering multiple channels for customer support, such as email, phone, and chat.

By creating a personalized customer experience, you can establish a stronger connection with your customers and increase their lifetime value. It is an ongoing process that requires a deep understanding of your customer’s needs and preferences, and a commitment to providing exceptional service and support at every stage of the customer journey.

  • Implementing a loyalty program or rewards program

Everybody loves perks and incentives, so offering a loyalty or rewards program is a great way to retain your return customers. By providing exclusive access to new releases or discounts on future purchases, you can build brand loyalty and increase customer lifetime value.

Loyalty programs can come in many forms, such as point-based systems where customers earn points for purchases that can be redeemed for rewards or tiered programs that offer increased benefits for frequent or high-spending customers. Whatever the form, it’s important to ensure that your loyalty program is easily accessible and that customers understand the value they can gain from it. Additionally, regularly reviewing and updating your program to ensure it remains relevant and engaging can help to maximize its impact.

With Joy Loyalty, you can easily create a customized rewards program that rewards customers for your loyalty and encourages them to return to the store. Customers can earn points for making purchases, leaving reviews, and referring friends. These points can then be redeemed for discounts or other rewards, creating a sense of excitement and value for the customer.

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By showing customers that you appreciate their business and providing them with tangible benefits for their loyalty, you can create a strong bond between them and your brand that encourages them to return time and time again.

  • Offering exclusive promotions and discounts

Sometimes, all it takes is a special deal to make your customers feel appreciated. Offering exclusive promotions and discounts to your return customers will make them feel valued and encourage them to keep coming back.

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This can be achieved through various means such as limited-time offers, exclusive discounts for loyal customers, and personalized promotions. By offering these promotions, customers are incentivized to make purchases and feel valued by the brand. In addition to increasing customer retention, this can also lead to increased revenue and brand loyalty.

With Avada Trust Badges Sale Pop-up, you can create eye-catching pop-ups that display exclusive offers and promotions, which can be highly effective in capturing customers’ attention and driving sales.

  • Encouraging customer feedback and engaging with your customers

Your customers want to be heard, so make sure you’re listening to them. This approach not only helps businesses to identify areas for improvement but also makes customers feel heard and valued.

One way to encourage customer feedback is by implementing a review system on your website or app. You can consider using Air Reviews - a top-rated Shopify app partner that can help you collect and display beautiful, simple product reviews to build trust and increase sales for your Shopify stores.

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Additionally, engaging with customers on social media platforms such as Instagram or Facebook can also be an effective way to gather feedback and build relationships with customers. Responding to comments, messages, and mentions can show customers that their opinions are valued and that the business is committed to providing a positive experience.

By implementing these strategies, you’ll increase the likelihood of retaining your return customers and building a loyal customer base. Remember, your customers are your greatest asset, so make sure you’re providing them with an exceptional experience every time they interact with your brand.

Measuring Customer Retention

Establishing a good relationship with your customers often starts with their first interaction with your business, but it’s important to keep track of their engagement and loyalty beyond that initial stage. That’s why measuring customer retention, or the rate at which customers return to make subsequent purchases, is a crucial aspect of evaluating the success of your retention efforts. Here are some important metrics to consider when analyzing customer retention:

  • Analyzing customer lifetime value and churn rate

Customer lifetime value (CLV) is a calculation that helps you understand how much revenue a customer will generate over their lifetime. This metric can be used to identify your most valuable customers and allocate resources accordingly.

Churn rate, on the other hand, is the percentage of customers who stop doing business with you. By analyzing the churn rate, you can identify patterns and determine the reasons why customers are leaving. This can help you make necessary improvements to your business and retention strategies. Ultimately, monitoring these metrics can lead to increased customer loyalty and revenue for your business.

  • Tracking customer engagement and behavior

Tracking customer engagement and behavior can provide valuable insights into what your customers are looking for and how they interact with your brand. Some key engagement metrics to track include email open and click-through rates, website visit frequency and duration, and social media engagement.

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  • Tracking revenue churn rate

Revenue churn rate is a crucial metric that gauges the customer lifetime value and how much profit your business is generating from each customer over time. This metric is useful for making informed decisions about marketing strategies and pricing adjustments that could increase long-term customer loyalty and overall profitability.

There are various factors that can impact revenue churn rates, such as customer cancellations, subscription changes, customer satisfaction, pricing alterations, and competition. It’s vital to measure this metric regularly to gain an accurate understanding of your business’s status and where you stand with your revenue churn rate.

Final thoughts

Without a doubt, customer retention is a vital aspect of any successful business. By focusing on keeping your current customers satisfied, you can build a loyal customer base and increase revenue over time.

To recap, customer retention should be a top priority for businesses as it can lead to increased revenue, brand loyalty, and positive word-of-mouth marketing. In order to retain return customers, it’s important to focus on customer service, create personalized experiences, implement a loyalty program, offer exclusive promotions and discounts, encourage customer feedback, and analyze metrics such as customer lifetime value and churn rate. By taking these steps, you can build stronger relationships with your customers and increase your store’s revenue.

Sam Nguyen is the CEO and founder of Avada Commerce, an e-commerce solution provider headquartered in Singapore. He is an expert on the Shopify e-commerce platform for online stores and retail point-of-sale systems. Sam loves talking about e-commerce and he aims to help over a million online businesses grow and thrive.