Posted by Jennifer on Monday, August 5th, 2013 and filed under
Relationships can be fickle. And the retailer-customer relationship can be especially flaky. A customer has the right to break up with you at any moment. He/she does not have to call or even send an “it’s-not-you-it’s-me” text. Did you know that, according to Gartner Group, 80% of your company’s future revenue will come from just 20% of your existing customers? The good news is that, according to the Harvard Business Review and Bain and Company, just a small 5% increase in customer retention can increase your profitability by 75%.
A recent Bain and Company report, The Value of Online Customer Loyalty and How You Can Capture It, cites four factors as to why customer retention dominates.
• You won’t break even on one-time shoppers.
• Repeat purchasers spend more and generate larger transactions.
• Repeat customers refer more people and bring in more business.
• Loyal customers will buy additional products from you.
So how do you keep customers coming back for more?
Jon Roketenetz, CEO of GimmeAnother, says the key to customer retention lies in the evolution of relationship dynamics. “For example, “Jon says, “to have an order process that is the same one you had 10 years ago is inappropriate.”
Jon, along with the Recurrable team, created the GimmeAnother app, a mobile reorder solution that allows customers to make purchases with the touch of a button. “The changes in the last decade with mobile apps and other e-commerce solutions,” Jon says, “have created a paradigm shift of the expectation about how the order takes place. As retailers adapt to these various changes, they create the opportunity to build loyalty out of convenience.”
Essentially, in order to strengthen your bond with consumers, you’ve got to give them every reason to stay. But you have to do it in the right way. ‘There’s always going to be someone out there offering your product cheaper than you are,” Jon adds. “Slashing prices doesn’t create a long-term solution, however, and it doesn’t foster loyalty.”
Daily deals and mass e-coupons might temporarily lure customers away from the competition, but if a business doesn’t somehow create a relationship that goes along with the reduced sticker, the customer will be off and running to the next discount that comes along. “I think that mass e-coupons create a false dynamic,” Jon explains.
GimmeAnother provides that extra incentive for your customers to remain loyal. On-demand ordering through an intuitive app thwarts the need for remembering an awkward password and typing in the same ol’ billing and shipping info.
Bain and Company’s report lists improvements in order fulfillment and website functionality as key factors in building customer retention. “Thirty percent of customers leave sites because they can’t find what they are looking for,” the report says, “and even for those who do start a shopping basket, the abandonment rate is 66 percent!”
Statistics clearly show that mobile solutions are paramount to customer retention. Convenience instantly achieves supremacy over a mass daily deal. Customers demand the power to order a product when they want and where they want—like while sitting in the dentist’s waiting room. Give them the power, and they’ll show you the love.