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Designing Your Customer Retention

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Designing Your Customer Retention

Customer Retention

How Well Thought Out Design Choices Lead to Customer Loyalty

Whenever I get to talk to eCommerce business owners about marketing, I find that the discussion is, almost without fail, focused on acquiring new customers. SEO and PPC get more traffic to your site, but they can be big investments, especially if you’re just starting out. And I’m left wondering, why do the customers you’ve already got miss out on the marketing love so frequently? After all, it is six or seven times more expensive to acquire a new customer, than it is to convince one you’ve already converted to make another purchase. If I had one piece of marketing advice for almost all the eCommerce entrepreneurs I talk to, it would be to think more about customer loyalty and retention when deciding where to spend your marketing dollars. And beyond that, to realize that everything about your eCommerce business, from your packaging, to your fulfillment service, to your site design affects customer retention.  

When we say customer loyalty, we’re describing the health of the relationship between a brand and its customers. Brick and mortar stores can tell how their customers feel based on conversations they have everyday, but eCommerce is a different story. It can be a lot harder to get to know your customers, to know what motivates them to make a purchase, and then use that in your retention efforts. Knowing your customers not only makes your customer retention program more effective, but can keep those efforts from doing more harm than good. Research has shown that shoppers will abandon accounts and subscriptions if they constantly receive poor or irrelevant communication.  

A great way to combat this problem, from a design and development perspective, is to give your customers the ability to weigh in at every opportunity. You might prompt them to leave a review with a follow up email after completed purchases, or automate an email to ask what went wrong following abandoned carts. Your analytics can also tell you quite a bit about which products your customers are going wild about, and which ones they’d rather not hear about as often. The more information you’re able to collect about a customer as they transact, the beefier your analytics data will be. If you have trouble reading analytics data, there are plenty of third party applications which can compress analytics data into easily understandable reports. There is a tricky line to walk here, though. You never want to make any of these opportunities for feedback an impediment to proceeding down the sales funnel. Too many tough to close popups, or mandatory information fields can degrade that customer relationship rather than build it. They might even cost you a conversion. A smartly constructed eCommerce design can walk this line without crossing it.  

Customer Retention

Customer acquisition efforts, while important to growth, can sometimes create a situation where you’re buying customers for more than they’re worth. Acquisition campaigns tend to focus on transactional value, discounts, and bonuses when you sign up. This means that often they self-select for cheapskates, and other customers only interested in bargain hunting. Retention efforts, on the other hand, focus on the emotional connection that a customer has with a brand, and how that brand aligns with the customer’s range of values and interests.

A sharp eCommerce custom design is a great foundation for building this kind of lasting relationship with the type of customers you want. A site design makes a strong impression on visitors about what kind of brand they’re interacting with. It gives you the real estate to tell your company’s story, and lay out your case for why you’re worth an emotional investment. While tough to quantify, the effect of making this kind of connection with customers is real. An effective, and smartly branded eCommerce site is a growth asset because it increases a customer’s lifetime value, and will decrease your need to spend money on acquisition.   

On the other side of the coin, if your online presence is cookie cutter, you could be actively hurting future customer retention.  What’s the point of providing really great service, fixing a customer’s shipping issue, or handling their return smoothly, if in 6 months to a year, they can’t remember who did it? How many first time buyers might you have converted, who never offset their acquisition cost, because they never came back to order a second time? When your online branding makes a specific impression, it lays groundwork for every good turn you do down the line to stick in your customer’s head, and pop back up when it’s time to reorder.

customer retention

Amazon, the 800 pound gorilla, has recognized the advantage of strengthening relationships with existing customers rather than going after new ones. Amazon Prime is without doubt the most effective customer loyalty campaign since Betty Crocker launched the first one back in 1929. Research has shown that Prime members are measurably more loyal than non Prime members. They prove it through their spending habits. Prime members make more purchases, have a higher average order value and report greater satisfaction than customers not enrolled in the program. And a customer’s spend, order frequency, and satisfaction goes up each year they are in the program. Amazon knows that they create more value by investing in customers who already have a connection with their brand. Their marketing dollars are better spent persuading customers they’ve already converted to come back and purchase again.

When you have an eCommerce business that is maturing, you need a mature marketing strategy to go along with it. Here at 1Digital, we provide the complete set of eCommerce design, development and digital marketing services. Our expert designers work with you to create an eCommerce design that not only follows all the industry best practices for engagement and retention, but also gives you a platform to tell the story that’s unique to your brand. If you’ve been thinking about taking your eCommerce design to the next level, drop me a line at jchilson@1digitalagency.com and mention Internet Retailer Magazine for a free consultation with an eCommerce design expert about how your online presence can be better at engaging and retaining your most valuable growth asset, your customers.

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