In ecommerce, a lot of work goes into keeping customers happy. That’s why it hurts when they leave your business. You’ve spent hundreds or thousands of dollars on email marketing, social media campaigns, PPC ads, and more, only to have customers buy something once or twice and never come back.
To slow down churn, you need a digital marketing strategy that helps you share relevant information and talk to customers on platforms where they spend time. A blanket approach where you share the same message on the same platforms, regardless of why customers churned, just won’t cut it. Customers are more likely to tune out and you’ll keep losing more of them.
Here’s a look at how to create a digital marketing strategy that will help you stand out from other retailers in your niche so it’s easier to connect with customers and convince them to stay.
Understand why your customers churn
Before we dive into how to create a digital marketing strategy, let’s take a step back for a minute to understand why customers churn in the first place. When you know what’s making your customers leave, you can create a targeted communications strategy to slow down churn.
In the retail industry, churn is when customers stop buying and become inactive after a certain amount of it. This happens for many different reasons: Your promised value doesn’t live up to customer expectations; you’re slow to respond to customer questions and concerns; the customer experience following the sale is bad; or there’s little or no personalized communication—for example, you don’t offer special discounts and product recommendations based on individual customer needs.
Churn rate—the percentage of customers lost over a period of time compared to the total number of customers—is important to track, because the higher it is, the more likely you are to spend a lot to welcome new customers while they’re leaving just as quickly. Keep in mind, it costs 5X more to acquire a new customer than it does to retain one, so lowering your churn rate boosts your revenue.
Churn rate differs by industry, but in retail, a rate of 5-7% per year is pretty standard. Anything higher than that is a red flag and needs to be fixed immediately.
Once you have an idea of why your customers churn, and how fast, it’s time to create a digital marketing strategy that will convince customers to come back and shop again.
Here’s how to get started.
1. Segment customers
Instead of a one-size-fits-all approach to digital marketing, like sending all of your customers the same emails or sharing the same messages across your social media platforms, segment your customers into groups. That way, you can see which types of customers churn, and then you can tailor your messages to include relevant content for each group.
Plus, once you segment your customers, you can standardize your digital strategies so you don’t have to create a new plan every time churn increases. Remember, one of the reasons customers leave is the lack of personalization, so customize your marketing so it does a better job of convincing customers to keep coming back.
This five-step process shows you how to segment your customers:
In ecommerce, replace step #1—understand customer needs—with the types of churned customers you’ve encountered. For example, group customers according to those who have
- lapsed and haven’t bought anything in a few weeks or months;
- abandoned their carts before checkout;
- bought only once; or
- spent a lot of time browsing products but rarely buy anything.
Use a tool like Google Analytics to see where these customers spend time on your website, what they click on, and where they bounce on your website. You can even use customer feedback to get more insight into why customers leave and then use this information to create even more segments.
Segmentation is an important first step because this is where you can start to think about the different types of communication to send each group. Base how you communicate with your segments on their preferences, what type of information you need to share, and how often you need to contact them.
2. Create customized messages
For each segment you create, come up with custom messages to improve the customer experience and relationship. As the Young Entrepreneur Council (YEC) points out, “Creating a message that speaks to your customers’ exact needs can allow you to reach them, be visible to them, and relate to them in ways that you have never done before — only then will you truly retain a customer for life.”
Go beyond simply customizing messages with the customer’s name; include specific information to encourage each group to come back and continue to be active, engaged customers. Let’s say one of your segments comprises lapsed customers who haven’t bought anything in two months. Here are some ways to customize their messages:
- Use their purchase history to send updates on products similar to the ones they bought in the past.
- Send them a survey asking about their current preferences.
- Reengage them by sending an invitation to use a special offer.
- Acknowledge special occasions, such as their birthday or the anniversary of their first purchase.
When customers see that you’re paying attention to their needs or that you’re making an effort to make their experience better, they’re more likely to come back and buy again.
Create message templates for each segment, and send them across multiple channels. We’ll get into this more in a minute, but the goal here is to have custom messages on hand that cater to the specific needs of each of your segments.
3. Decide which channels to use
When you consider how you’ll talk to your customers, think about the places they spend the most time online and the preferences they’ve shared. With an optichannel digital marketing strategy, you maximize your reach and improve the chances of getting customers to come back or of stopping them from leaving in the first place. Simply choose a mix of channels to use for each segment—anything from social media to video marketing.
Let’s look at an example of how this works using the lapsed-customer segment again. For customers who haven’t bought anything in two or three months, send them an email introducing a new product line that is similar to products bought in the past.
Here’s an example of an email introducing a new gift set. It’s a good example of how to reengage customers who haven’t bought anything in a while:
Include a link to your product pages to encourage these customers to browse.
After a few days, send a text or rich media message (RMM) that includes a limited-time special offer that also links customers to product pages to browse. The difference is there’s an incentive to buy now rather than later, and, with a few clicks, customers can complete the purchase on their phone.
The benefit of including mobile messaging in your digital marketing strategy is that customers are receptive to businesses that communicate this way. Mobile messages have an open rate of 99%, which is higher than that of emails. Plus, mobile messages “have a 90 percent chance of getting opened in the first 30 minutes after being sent.” Just keep in mind that the majority of customers in your segments have to share their phone numbers in order for this option to work.
To make sure you have the contact information you need to access different channels, ask customers at checkout to share information such as their phone numbers or email addresses or the social platforms they use.
4. Look for gaps
Now that you’ve created a digital marketing strategy that addresses churn, take a step back and assess whether these changes have had an impact on customers leaving or coming back. Ask yourself questions like:
- Is churn lower?
- Is churn higher?
- Which segments responded to notifications better than others?
- What types of messages resulted in the most engagement?
- What’s the open rate when mobile messages are included?
Use the results of your review to make changes to the types of messages you send, the channels you use, and the frequency with which you send messages.
The goal is to lower churn, so be prepared to adjust your approach and the types of messages you send to each segment until you have a process that can be repeated and gives you the lowest amount of churn.
Creating the best digital marketing strategy for your customers
It takes time to set up each step of the process, but this methodical approach pays off in the end. Don’t jump into customer communication without a clear plan because you’ll waste time having to go back and figure out why it isn’t working.
Your digital marketing strategy is a powerful tool that helps you connect with customers by using the right messages at the right time, so take advantage of these steps and you’re sure to see an improvement in customer retention.
Published on: 16th April 2019