Wednesday, October 14, 2009


Customer Retention:

Keep Them Locked In Place

How much did it cost you to get your latest customer? $0.50? You should be so lucky. $5.00? Ummmm, maybe. $10.00? You’re getting warmer.

The fact is, most site owners don’t have a clue how much it cost them to acquire a customer. More importantly, they don’t know if the customer made enough of an initial purchase to even cover customer acquisition costs such as Google AdWords, a press release, syndicated content or some other means of attracting attention on the W3.

However, you can get a rough estimate of cost per customer by totaling up marketing and promotion expenses and dividing by the number of customers – not just site visitors but visitors who converted to buyers. And this is far from a pointless exercise. When you determine just how much it cost you to recruit a customer – a paying customer – you’re going to want to keep that person coming back time and time again.

The Importance of Customer Retention to Site Success

It’s called customer retention and if you’re just starting out in the wild world of e-commerce, you’ll soon realize how critical customer retention is to your long-term success. And, even if you’ve been doing this a while, there are plenty of steps you can take to retain the customers you’ve accumulated over the years. Is it worth it? What do you think?

So here are a few tips that have worked for companies as diverse as Amazon and Netflix. And both of those e-businesses are doing well with their customer retention strategies.

Personalize the Buying Experience

You can do this using your database to deliver customized content to each visitor. You can welcome each customer by name and offer suggestions for purchase based on their past buying history.

Gather Customer Data

Two ways to do this: either through the use of metrics software or by providing repeat buyers (those are the ones you love) a form to write both gripes and praise. Fix the gripes. Expand the praiseworthy features. Easy. Oh, and don’t forget to mention that this form is for repeat customers only so you can improve both your products and services to enhance that repeat buyer’s on-site experience.

By the way, this kind of “personalized” input will probably reveal problems that never occurred to you. Conversely, it’ll point out your site’s under-utilized strengths like a one-click checkout, for instance.

Stay In Touch

Even small sites have new products and special sales. Use your database to provide email announcements for “customers” only.

Now don’t overdo this or your emails will end up in the recycling bin. However, the judicious use of email is very effective. Check out It’s a relatively small site that does big business in selling authentic Italian olive oils and other hard-to-find foods from Italy.

During the holiday season and a few weeks before Mother’s or Father’s day, this company sends out an email announcing gift ideas – and these emails pull big time.

Create a Customers Only Section

This requires a log in name and a password but it provides lots of useful informational content about the company’s products or services. Again, not too much hype. Keep the content informational to provide a little bonus for your regulars.

You may also want to consider adding a customer’s forum in this section – a place where regulars can share their experiences – good or bad – with your company (fix the bad) – they can exchange recipes, strategies, ask and answer questions. It’s a great way to build a site community – a group that returns to your site on a regular basis. And buys stuff.

Reward Loyalty

Free stuff. That’s always a nice reward. Offer free shipping to all of your regulars or offer a free gift with their next purchase. A free ebook download – anything that says “Thank you, we appreciate your patronage.”

BTW, these loyalty rewards may do better when placed in the “Customer Only” section so you don’t alienate newcomers to your site.

Surprise Savings

Regular customers will stay that way when you offer surprise savings on certain items. As items are placed in the shopping cart, you can flash a “Surprise Savings” icon announcing that “because you’re a regular customer, this item is only $5.99 instead of the $10.99 new customers pay.” Think of the old-time Blue Light Specials. It’s like free money and your regulars will definitely appreciate it.

Coupons work, too. Place them throughout your site so that visitors have to search for them, like a treasure hunt. Coupons can knock 10% off your total purchase price, provide free shipping and handling or offer a free thank-you gift – a show of appreciation for the customer’s regular patronage. And the customer gets the benefit today at the POP!

Simplify Everything

Keep things simple for regulars. Provide a one click checkout so these regulars can load up their shopping carts, make a single checkout click and their goods are on the way. Easy.

Provide a 24-hour customer service line. And even if you’re just starting out and cash is tight, this might be worth outsourcing. Otherwise you may end up spending your days handling customer care – not a happy thought – when you could put your time and energy to better use – like growing the business!

Make returns easy, too. Larger online businesses keep complete records of the buying practices of their customers. So, if you call in with a problem, your account pops up on screen telling the representative everything s/he needs to know about you.

If you’re a big spender and a regular, the service rep will do handstands to make sure you’re happy – even if it means the business loses money on this one sale. Your customer profile shows you’re worth keeping.

However, if you’re a first-time buyer or, worse, a customer who complains about every purchase, don’t expect the same treatment that good customers receive. Good customers are worth the effort. Problem buyers aren’t.

Always Over Deliver

One online company that caters to new brides always includes a little extra gift no matter how small the order. One woman ordered two bed side lamps and received, as a gift, four place mats – which probably cost as much as the two lamps she ordered. Think that customer will be back? She will.

This is a great way to get rid of excess inventory and maintain customer retention. But it doesn’t have to be a gift. It can be going the extra mile – overnight delivery or a special order – anything that makes the buyer feel as though you care – because you do care…a lot.

It costs you money for every buyer you get so it just makes sense that once they’ve become a customer, you keep them coming back by creating customer loyalty in lots of little ways.

Finally, No Unpleasant Surprises, Please.

Don’t forget to eliminate any unpleasant surprises. For example, a customer places a $9.95 order only to discover at the checkout that there’s a $7.95 shipping and handling fee. There’s an abandoned shopping cart and rest assured, that customer won’t be back.

Or, how about advertising an item on site only to inform the buyer that the item has been back ordered and won’t ship until the boat arrives from China. Think that customer will be pleased upon hearing that? How about orders that take six weeks to fill? That’s a no-no for sure.

Look you worked hard and paid for every one of your customers so everything you can do to keep them customers is, in the long run, going to improve your bottom line.

Back in the day, there was the view among merchants that “The customer is always right.” Somewhere along the way, that idea got lost. But in the intensely competitive world of e-commerce, the idea is making a comeback.

So, have a sign made up. Hang it where all employees (including you) can see it. In big bold letters, it should read:


That’s the best way to keep the customer base you’ve worked so hard to build.

Hey, it costs 10 times the dough to find a new client than to keep an existing client. Doesn't it make sense to keep the clients you have? Call me. Let's talk.


No comments: