More time spent at home thanks to remote work, cancelled events and activities, and other pandemic-related factors resulted in consumers bringing more attention to digital shopping. Creating a consistent experience across all channels is what will keep consumers’ attention and business, driving both customer acquisition and customer retention efforts.
As a result of shifting consumer behaviors and the impact they have had on retailers’ marketing strategies, Total Retail, in conjunction with SMG, a leading experience management firm, recently produced a new report, The Changing Consumer: Adapting Digital Marketing Strategies to Acquire and Retain Today and Tomorrow’s Customer. The comprehensive report addresses how retailers must adapt their marketing tactics to acquire and retain digital-savvy, channel-agnostic shoppers.
To start, brand style, content tone, and other elements of a retailer’s marketing strategy must be consistent across all digital channels. The consumer needs to recognize at first glance the brand they’re hearing from. Emails confirming orders, advertising a special promotion, announcing a new product launch, etc., need to share consistent brand styles and tones, creating a familiar feeling for the recipient. If a customer goes into a brick-and-mortar store, their experience and how it makes them feel is likely going to be the same regardless of what task they went in to accomplish. This can be achieved digitally as well. Social media, text messaging, affiliate marketing, etc., all need to be consistent to ensure customers are associating the messaging they receive with your brand. As mentioned previously, consumers are habitual. Therefore, if they’re familiar and comfortable with your brand, they will think of it when they need something and return to make repeat purchases.
According to SMG data, 41 percent of consumers report they shop online weekly and 79 percent shop online at least once a month. Therefore, it’s clear there’s ample opportunity to boost online business. Acquiring new customers has long been a focus for brands, of course, but it has become increasingly important in today’s hypercompetitive online retail environment. With more people shopping and spending time online, retailers’ marketing plans must capitalize on such a captive audience. Increased online traffic has led to more retailers and brands selling their products online. This abundance of choice available to consumers has resulted in them becoming less brand loyal. Your competition is a mere click away.
Regarding brand loyalty, younger generations are more willing to try new brands and research new and improved product versions of what they seek. They’re less likely to buy something simply because it has a well-known name attached. Think about what, during their shopping experience, needs to happen to get them to convert. They’re paying attention to marketing campaigns around sustainable and ethical products, for example. This provides opportunity for smaller or newer brands to gain consumer attention and win their business.
Successful customer retention also lies in a strong customer experience. Just like in-store, if a person has a poor online experience they won’t return, regardless of what they were trying to accomplish. It’s fairly straightforward from a qualitative stance: the better experience your customer has, the more likely you are to retain them. And it’s more cost effective than acquiring a new customer, particularly given today’s rising online customer acquisition costs.
Quantitatively, outboundengine.com reported the following stats in April 2021:
- Acquiring a new customer can cost five times more than retaining an existing customer.
- Increasing customer retention by 5 percent can increase profits by 25 percent to 95 percent.
- The success rate of selling to a customer you already have is 60 percent to 70 percent, while the success rate of selling to a new customer is 5 percent to 20 percent.
- One customer experience agency found loyal customers are five times as likely to repurchase,
five times as likely to forgive, four times as likely to refer, and seven times as likely to try a new
- U.S. companies lose $136.8 billion per year due to avoidable consumer switching.
- American Express found 33 percent of customers will consider switching companies after just one instance of poor customer service.
In addition to the above data which illustrates the value of customer retention, the cost of digital acquisition continues to rise with the popularity of online shopping. It costs more for paid search ads and social media, efforts typically geared toward attracting new customers. As such, putting effort into retaining existing customers is going to be a better return on investment for retailers.
To learn more on how retailers must adapt their marketing and engagement strategies to optimize their customer acquisition and retention strategies for a digitally driven retail environment, download The Changing Consumer: Adapting Digital Marketing Strategies to Acquire and Retain Today and Tomorrow’s Customer today!