How eCommerce Brands Win in 2020 Part 3: Retention Strategies

Retention is critical for any eCommerce brand that wants to sustain growth. If you acquire twenty new customers every month while having twenty other customers churn on a monthly basis, your growth is stagnant. If you bring in ninety new customers every month but have ninety-five customers churning at the same time, you have a failing business.

Brands need to get serious about plugging their leaky buckets to sustain growth and it starts with understanding and identifying churn. Most of the time, churn boils down to the customer experience – the post-purchase experience. In order to reduce churn, companies need to become intimately familiar with where their post-purchase experience is falling short. Once brands do that, they can figure out which retention strategies to execute so they can go above and beyond for their customers where it counts, increase their CLV, and maintain a healthy growth rate over time.

Below is a list of strategies from the must-haves to the next-level ones that’ll help your eCommerce subscription business retain more customers.

10 Strategies to increase customer retention

The must-have strategies

1. Improve your next order and subscription management

A lot of churn occurs in eCommerce simply because customers want to modify their next order or subscription but can’t. Not having a system in place to enable this is a huge missed opportunity for brands and should be non-negotiable for companies looking to increase their retention. Having a customer portal that provides customers the option to make changes to either their next shipment or subscription, like swapping or adding a product, can remove a ton of churn without a lot of extra lift.

Another way brands can improve their subscription management is to offer an easy way to skip shipments. Oftentimes, customers don’t want to outright cancel but just skip a shipment because they have too much product on hand. A brand that does this well is Billie, allowing customers to skip or adjust their orders at any time.

2. Send upcoming shipment emails

Retention is all about the post-purchase experience and getting customers excited about their upcoming orders. A way to build hype and make customers as excited for their next order as they were the first time they purchased is to send them emails about their upcoming orders. Not only does this keep them in the loop, but it creates more touchpoints for you to engage them from the time they purchase to when their order arrives.

3. Make customer support a customer success

Sometimes automated processes aren’t enough and you need the human touch to save an unhappy customer. BarkBox has a great example of this. A pet owner started a subscription but realized the toys were too big for her dog, so she went to cancel and gave them feedback about her experience. BarkBox made her cancellation process seamless and sent her a free shipment of smaller size dog toys.

No surprise that the woman reactivated her subscription. Make sure your support team is equipped to act on scenarios like this so you can exceed customer expectations at every touchpoint (even after a bad experience).

The should-have strategies

4. Optimize your customer onboarding

Having a great customer portal is the first step, but you need to make sure your customers know how to use it. Create an onboarding sequence showing them how to navigate the portal, write up support documentation or use in-app tooltips to point them in the right direction.

Once a subscriber completes a purchase and is on the thank you page, redirect them to the customer portal and show them how to navigate it. Point out where they can find their upcoming order, how to skip a shipment, or swap products in their order. When you send them an upcoming shipment email, mention and link back to where in the portal they can find everything about their subscription to increase engagement.

5. Implement failed payment flows

Failed payments are the main contributor to involuntary churn. The good news is that because it’s involuntary churn, fixing these failed payments can be a quick win. eCommerce companies can execute on this low-hanging fruit by implementing some failed payment flows to notify customers that their payment method failed. For B2C brands, credit card issues are common, so get ahead of the problem by emailing customers to update their payment info. If a card is about to expire, brands should send communications letting customers know so they have time to switch it and make the process easy. Consider setting up alerts anytime a failed payment email bounces so an account rep can reach out manually.

6. Create cancellation flows

Understanding why customers churn is foundational to any retention strategy so it’s important to create cancellation flows for your eCommerce brand. For starters, don’t make figuring out how to cancel difficult–that will make customers call customer support or complain on social media. Instead, make it simple for them to cancel but make sure you capture why they’re canceling. Understanding what their motivations for canceling are and when they decided to cancel is key to preventing future churn.

Like we mentioned in the subscription management example, you can try to retain on-the-fence customers with options to skip shipments or add or swap products. Additionally, the BarkBox example mentioned above highlights how cancellation flows can create opportunities for customer support to turn unhappy customers into happy ones.

7. Provide upsell opportunities

Companies can increase their customer lifetime value (CLV) by creating upsell opportunities. Not only does this lead to more revenue but it’s another touchpoint between your brand and customer. One way to do this is to increase your average order volume with post-checkout upsells customized to each subscriber. To do this, you’ll need to look at the data produced from your customer relationship and figure out what the right upsell opportunity is. A second option is to leverage the customer portal where merchants can select which products they’d like to showcase to buyers. Customers can then easily add any products displayed to their cart at checkout.

Another opportunity to upsell customers is when you send them emails about their upcoming shipment. Every time your brand lands in a customer’s inbox it’s an opportunity to build hype and a great time to provide an upsell to a relatable product or a special offer.

The next-level strategies

8. Offer referral programs

The most popular and effective referral incentive for subscription eCommerce brands is a discount or store credit toward a customer’s next subscription payment. Customers love telling their friends about products they love, especially when they’re getting something extra.. That’s why the post-purchase experience is important for referral programs – people are less inclined to share products with others if they’ve had a bad experience, even if there’s a discount.

Referral programs like this are also great at reducing churn because they keep the customer engaged. Receiving the future benefit of a referral reward is contingent upon them remaining a customer. What brands need to make sure of is that their referral bonuses incentivize current customers enough to take action and refer others to the product.

9. Offer loyalty and membership programs

Repeat buyers are much more valuable than new customers so rewarding top customers through loyalty and membership programs is a great way to enrich their customer experience and incentivize repeat purchases. If you’re going to implement one of these programs for your eCommerce brand, make sure there’s ample value in it. Today, a lot of companies launch loyalty programs that don’t offer enough value to incentivize customers to keep making repeat purchases. For example, something like, “buy four and get the fifth one free” isn’t that compelling. The incentive is lost after the fourth purchase and doesn’t give customers a reason to stick around long-term. The greater the commitment over time, the greater the rewards should be.

A great way to approach this is to build a tiered program where the more customers spend, the more bonuses they get with each spending tier they enter. This strategy plays off gamification, incentivizing customers to spend more to reach the next level. Note: you’ll need a customer portal where customers can track their loyalty points.

Membership programs are great way to build exclusivity and increase retention. Brands can create a “VIP” customer experience and incentivize customers to stick around by offering different perks like early access to new products, concierge services, and event invites. Four Sigmatic does this well with their Mushroom Membership, offering 20% off subscription products, free shipping, early access to new products, a membership concierge and much more.

10. Double-down on nurture campaigns

Keep in touch and engage your customers with regular nurture campaigns. Staying top of mind for customers is important and consistently hitting their inbox allows you to continue building your relationship with them so you can better retain them. Nurture campaigns are a great way to let customers know about cool things happening in your business. You can provide sneak peeks or behind the scenes looks at new products or initiatives you’re working on and build connection and hype with your subscribers.

Another great thing to include in nurture campaigns is customer stories. Check-in with your customers and see how they’re using or enjoying your products and ask if you can share their stories. Stories around how customers are getting value from your products or how they’re impacting their lives is a fantastic way to show the human side of your brand, build loyalty and let other customers see how people just like them are getting value every day from your business.

Remember: diagnose before you treat. Understand where churn is happening in your business and why before you go ahead and execute on any of these strategies. If you’re looking for a subscription software to help you get repeat, loyal customers and increase your CLV, Upscribe can help. Schedule a demo here.

Published by Nirav Sheth

Nirav is the CEO and founder of Anatta. Nirav received his engineering degree in 2006 from George Washington University. Prior to Anatta, he served as founder of Dharmaboost, a software company working with Cisco Systems, Hewlett Packard, and New Leaf Paper. He is also cofounder of Upscribe, a next-level subscription software for fast growing eCommerce brands.

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