Retention is like the middle child of a marketing family. Perennially dwarfed by its siblings, Acquisition and Churn, you don’t pay much attention to it. Until things go belly up of course and then you’re left scrambling to salvage customer relationships beyond repair.

We all know the numbers involved in retention. But let’s focus on some real world actions that can help hold on to customers in the big bad world of online commerce.

Discount Ladder

Let’s face it. Apart from convenience, the main draw of online shopping will always be the never ending offer and discount shopping. While offering discounts can seem like a no brainer answer to retention, designing a discount plan to keep your customers as your customers does have a bit of science to it.

Imagine a typical customer lifecycle. While the path and journey of each customer is as unique as it gets, let’s take a bit of risk and generalize for the sake of discussion.

Ideally when customers start out as…well customers, their relationship with your store/brand is a slow takeoff. They’re apprehensive about first time purchases, and test the waters. And as positive experiences grow, so does the degree of purchases and engagements.  Eventually these tend to normalize and plateau over time before they start to show a dip.

Now let’s juxtapose a typical campaign strategy over this journey. For a customer just starting out, your onboarding campaign is just too difficult to resist. It could be a one-time half off coupon or a buy two get one free offer. The idea is to give that slight nudge to a first timer that sweetens the deal. And for the most part it works brilliantly.

Now imagine the same customer 3 months down the line, with a handful of purchases completed. Think you should push out the same offer as the first time? You very well could, but for a couple of reasons.

• It might not be the most profitable thing to do
• Your customer could be very well bored and consider you a one trick pony

For the reasons stated above (and more), it makes sense to maintain a sense of variety to your discount offerings and eschew the ‘one size fits all’ approach.

Creating a structured discount ladder is an effective approach to this quandary. A discount ladder takes into account multiple factors such as ‘AOV’, Purchase Frequencies’, ‘Engagement Levels’, ’Category Preferences’ and ‘Discount/Offers’. Such an approach is more likely to guarantee a message that resonates with the customers as it takes into account their preferences and needs.

An example of a discount ladder is shown below

Customer ID	Average Order Value (USD)	Purchase Frequency (per month)	Engagement Levels (High/Medium/Low/Inactive)	Category Preference	Discounting
11111	115	3	Medium	Electronics	10%
11112	32	5	High	Accessories	5%
11113	350	1	Low	Home Appliances	25% + Free delivery

  

Occasions

Reaching out to customers on occasions (Holidays, Black Friday etc.) is now a given. With every online retailer running promotions and campaigns in full swing at these ‘designated’ time periods, it’s easy to become invisible and disconnected with customers.

There exists a fine line between staying in touch and badgering online customers. Mapping out critical junctures in the customer lifecycle journey and padding them with contextually relevant communications helps achieve the former. Some ideas worth exploring include

• Welcome emails
• Thank You  emails
• Birthday Wish coupons
• Anniversary reminders (Up Sell Opportunities)
• 1 year sign up offers

Do remember that not all events might be applicable to all customers. Mining customer’s historical behavior helps extract insights with relevant significance to specific customers which should then be leveraged accordingly.

Personalization

Personalization can take on various forms and degrees within an ecommerce construct. Creating a personalized experience can be as simple as including the customer’s name in an email to using customized web experiences based on product affinity and predictive capabilities. The ultimate aim is to create a sense of connect with the customer and offer an engagement that closely mirrors their own wants and needs in a proactive manner whenever possible. Deliver such an experience helps foster customer loyalty and in turn help achieve high levels of customer retention. Typical examples of retention tactics include

• Subject Line Personalization
• Personalized Salutations/Greetings
• Historical purchases driven customized browsing experiences
• Affinity analysis based product recommendations
• One of a kind (incorporating the person’s name etc.) offers

In short, whatever the degree may be, personalization is an effective way to achieve retention success.

Loyalty Programs

Loyalty Programs are often touted as a key retention tactic. On the flipside there is an interesting school of thought that posits Retention as the means to the end, which in this case would be Customer Loyalty. Loyalty is a goal which requires an unyielding dedication to customer satisfaction. While many brands make Loyalty Program signups as a key priority, there is a tendency to forget that customer loyalty needs to be acquired organically. Focusing on creating an exemplary customer experience and achieving consistent levels of customer satisfaction at every interaction is the easiest way to customer loyalty rather than wave after wave of irrelevant offers and bonuses which lead to nowhere in the long term.

Takeaways

Summing up, here’s what you need to get right in the retention game

• Discounting – Staggered offers that are relevant to the preferences and vintage of the customer. Not a one offer for all  approach
• Occasions – Focus on not just big bang seasonal promotions, but the little ones that show that you care about your customers individually
• Personalization – Venture beyond like for like product recommendations. Get the details right in areas such as payment, delivery and so on
• Loyalty Programs – Focus on growing customer loyalty organically. The Loyalty Programs will fall into place automatically