You’ve done the hard work of getting a customer to purchase. The best way to build your business is to focus on the customers that have purchased your product and get them to purchase from you again. Focusing on a customer’s lifetime value is a great way to figure out which of your customers are frequent flyers and how to get them to buy more products and tell their friends. These tried and true customers are also great for reviews and word of mouth advertising.
There are many e-commerce tools out there to help you track your customers but Shopify for Dropshippers and Small Business is the easiest we’ve found to use. With Shopify’s reporting you are able to easily filter your customers by name. You can easily figure out the lifetime customer value by taking the average order value and multiply that by the purchase frequency. This will allow you to easily figure out your lifetime customer value.
Recently, CPMs on Facebook and Instagram have increased making customer retention more important than ever. With easy customer reporting and the initiation of customer loyalty programs, newsletters, and customer engagement through social media you can build your existing customer base with ease.
By increasing customer retention you are increasing profits over new customers. In almost all cases there are some sort of advertising costs included to bring new customers to you. When you’ve already converted a prospective buyer to a customer, those costs will no longer be necessary. If you sell a product for $1.00 but pay 10 cents for the lead, you only get 90 cents from that customer. If that customer continues to purchase you would get the full $1.00 of that sale. This can dramatically increase profits over time.
Simon Grabowski, CEO of Get Response further drives home the need for a specialized approach regarding customer retention, “It’s not difficult getting to $2,000 a month; it’s staying there that possesses the challenge. Unlike a coffee shop or bakery that may provide more predictable and stable cash flow, successful companies require a deeper understanding of client behavior and what they desire from the online experience. Your channels for client retention and maintenance and acquisition via marketing should be managed separately, each having its own dedicated team. Don’t mix the two.”
Independent strategies for customer retention will increase success and build your business over time. While there are many traditional marketing choices that you can pursue, consider these Shopify Apps that can improve customer retention:
- Conversio allows you to easily take your customer lists and make targeted marketing outreach lists. Targeted marketing is the best way to increase customer retention. Conversio allows you to easily create professional looking email campaigns to keep customers coming back.
- PushOwl allows you to easily create targeted push notifications to further engage your customers. These small callouts and calls to action allow you to increase the lifetime customer value of your customers easily.
- Smile.io is a great way to let your customers earn rewards by referring you to their friends and family. This allows for your customers to earn rewards on future purchases increasing their lifetime customer value and allows you to earn customers for free.
Increasing the lifetime customer value is the best way to build your business to last. With specific strategies and ecommerce solutions that work with Shopify, you have a lot of tools at your disposal. These tools allow you to filter customers, engage them directly, and build loyalty and referral programs to increase leads. Focus on increasing customer lifetime value and you’ll reap the benefits by increasing profits!