3 Ways To Increase Your Revenue Through Improved Customer Loyalty

dog.jpegIf you’re not already focused on return customers, you should be. According to our recent analysis of customer data, return customers are incredibly valuable not only as brand champions, but also from a profitability standpoint.

Over the course of a year, the average return customer spends over 120% more than new customers. In 2015, the average return customer spent a cumulative total of $86.16, more than double the $38.81 spent by new customers. Not only are return customers valuable because they shop more than once, they also spend 15% more on any given order.

Since it costs about 7x more to acquire a new customer than it does to retain an existing one, it’s worth the effort and budget to invest more in return customers. Here are a few pointers for making your retail business more focused on customer loyalty.

1. Personalize Your Marketing Efforts: Use targeted, personalized email to entice customers to buy more. Forty one percent of consumers in a recent survey said they would buy more from retailers that send them personalized emails. One example of a retailer who proved this statistic is Vera Bradley, a popular quilted handbag and accessories company. The company used customer data insights to better segment and target their marketing emails. As a result, they managed to send 63% less emails while achieving a 101% increase in click through rates and a 275% spike in conversion rates.

2. Run Custom Promotions On Social Media: Consider running a promotion for a specific network or event, as 33% of consumers have acted on a promotion on a brand’s social media page. One of our customers, Flash Tattoos, an accessories brand based in Austin, Texas, often offers Instagram-exclusive giveaways and promotions for their loyal followers. Flash Tattoo’s VP of Operations, Michelle Garza, says, “offering exclusive promotions on different social channels makes customers want to connect with us wherever we are. In offering promotions where customers can tag friends in a post as a way to win, we’re creating customer advocates and having them spread the word about Flash Tattoos to their network. We gain followers, and customers feel valued by getting special deals, so everybody wins.” 

3. Anticipate Customer Needs: Use the data you have on customer habits and trends to inform your business decisions. If a customer purchases a swimsuit and flip flops from you, don’t continue serving them ads for the items they’ve already purchased. Instead, consider serving ads for a beach bag or sunglasses because you can anticipate that these might be logical next purchases for this customer. Furthermore, you don’t always need Big Data to anticipate customer needs. Carmine Gallo, a contributor for Forbes, wrote about a hotel in San Diego that provided exceptional customer service based on anticipating guests’ needs. As his daughters settled to play in the sand, a hotel staff member quickly dropped sand toys in front of them. On a hot day, their car was loaded with water bottles. Paying attention to your customers and what’s important in their lives (for example, promotions for the holidays or back to school shopping) is the first step anyone can take to successfully anticipate customer needs. 

Measure Your Customer Loyalty Impact with Stitch

However you go about retaining loyal customers, our data proves you should be doing something. We’ve even created a new Customer Loyalty report to help measure your progress toward increasing customer loyalty and lifetime value. With this report, you can track customers by monthly cohort to see how successful you are not only attracting new customers, but also increasing their purchases and profitability over time.

The customer experience and marketing chapters of our Ultimate Guide to Scaling Your Retail Business have more tips for creating an experience that customers will want to share with their networks, and will keep them coming back for subsequent purchases.

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