Any scientist will tell you that it takes significantly more energy to begin moving an object than to keep it in motion—and conversions are no different. Although customer acquisition is a crucial piece of the puzzle, customer retention is vital in sustaining your momentum.
Why retention is so important
Customer loyalty is not to be undervalued or taken for granted. On average, it only costs one-fifth as much to lure an existing customer back as to convince a new one. Studies show that repeat customers spend 67% more than first-time customers, and profits can jump about 75% with just a mere 5% increase in retention, so a higher repeat customer rate will help grow your business exponentially.
Turning a new customer into a repeat customer is as simple and as complicated as providing an excellent experience for shoppers. You may think you don’t have the tools at your disposal to properly offer the things customers are looking for: an easy-to-navigate website, efficient and friendly customer service, low prices or discounts, the list goes on.
That’s where the concept of collaborative commerce comes in. With VTEX, for example, you have access to an entire network of potential partners at every step in the supply chain. Its omnichannel platform helps you create a seamless experience for your customers between your online and physical commerce presence. This strategy enables companies to retain an average of 89% of customers, contrasted with only 33% for businesses with poor inter-channel strategies.
With collaborative commerce, you’re able to find other businesses to lift some of the burden off your back, so you can work together to provide more for your customers. Even teaming up with competitors by selling on their marketplaces, or letting them sell on yours, can create unexpected opportunities for success.
What customers want
One of the most popular ways to entice customers to come back is offering rewards points. Usually points are earned through purchases, but some e-commerce stores, such as SHEIN, offer points simply for “checking in.” This encourages customers to visit the site every day to accumulate points, and spend them before they expire, often spending over the point amount. Offering this incentive is alluring to almost 70% of consumers, despite the fact that roughly $100 billion worth of loyalty points go unclaimed each year.
Customers also consistently value having their needs and desires not only met, but anticipated. Understanding your market is a good start, and sending customers surveys or asking for reviews after purchases is even better, but tapping into customer data may help you hit pay dirt. This can come in many forms, for example through making personalized suggestions to encourage more purchases, or larger ones.
Providing attentive customer service is another huge factor for consumers. Real-time support, whether through a chatbot or over the phone, is a deal-breaker for 42% of customers. Furthermore, over 60% of customers assess returns policies before making a purchasing decision, and are willing to spend a whopping 158%-457% more if offered free returns.
How collaborative commerce can help
Each aspect of improving your customers’ experience and ultimately retention rate can be accomplished more easily through collaboration. By selling on marketplaces, either others’ or your own, you instantly have access to loads more data. Why does a certain percentage of customers choose a competitor’s product after viewing yours, and what can you do to change that?
You’re also more likely to be able to offer lower prices, more discounts, and free shipping if you’re pooling resources with other businesses. Even Red Oxx, a company that prided itself on its independence and holistic approach to selling, found VTEX’s collaborative style to be incredibly useful and take their store to the next level.
So think about what you can do to increase customer loyalty, and consider what collaboration can do for your business.
