What Are the Top Marketplace Retention Strategies in 2023?

You have repeatedly heard it. Finding new consumers is more expensive than getting current customers to make repeat purchases. It holds true for a lot of firms, particularly in the competitive industry where the cost of clicks and conversions seems to be rising steadily. This is the science behind retaining customers.

In order to grow a firm, customer retention is crucial. Building a loyal client base is important while create a marketplace, but when businesses expand, they frequently tend to concentrate on using their time and resources to acquire new consumers rather than keeping their current customers.

When was the last time you sought out chances to re-engage consumers in an effort to get them to return? Now is a fantastic time to develop a comprehensive client retention plan if you haven't yet marketed to existing customers after the sale.

Which client retention techniques are effective, and why? With these effective customer retention methods, learn how to foster client loyalty and raise customer lifetime value. Let's examine the beginning process.

What is Customer Retention?

A company's efforts to keep customers on board as long as feasible are referred to as customer retention.

With a variety of techniques created to appeal to them, your company should ideally turn new customers into devoted and consistent buyers.

In addition to increasing and stabilizing your brand's income over time, this contributes to maximizing your customer lifetime value.

A continual endeavor is customer retention methods. To keep your audience coming back for more, you can't only rely on once-off fulfillment of consumer demands. You must consistently go above and beyond to win over new clients.

Why Customer Retention Is Important in 2023?

Any brand that wants to succeed in 2023 must have a solid plan for client retention. This is due to a number of factors.

• It costs money and takes time to find new consumers - A new client generally costs five times as much to attract as an old one does to keep.
• Existing consumers are receptive to more - They're keen to test out novel goods and services from a company they already know and respect.
• Maintaining devoted clients may enhance a brand's reputation- Customers who are happy with a brand are more inclined to tell their friends and family about it. Customer retention should be the top aim for every wise brand in the fiercely competitive industry of today.

Your budget may pay for itself through recommendations, which is another justification for concentrating on a customer retention plan rather than a new acquisition approach. Retained clients are more inclined to share their reasons for sticking with your company with others: According to a Nielsen study, 92% of consumers worldwide place a higher value on earned media (such as brand referrals from friends and family) than any other kind of promotion.

Your finest brand ambassadors are your customers, and their interactions with your company are crucial. The ideal consumer experience with your brand should resemble the following:

Attract (Find Lead) -> Convert (Turn Lead to Customer)-> Serve (Serve Customer and Inspire) -> Retain (Turn Customer to Loyal Customer)

Your existing customers will aid in bringing in new ones, and you may sell new goods to your existing clients to keep them on board. You may increase word-of-mouth marketing and, as a result, make it simpler to attract new customers by investing in a client retention plan.

Top Marketplace Retention Strategies in 2023

Use Integrated SMS And Email Retention Campaigns

A customer retention campaign is a type of marketing tactic created to prevent your current clients from conducting business with your rivals.

The goal is to stay in touch with your clients and give them benefits and incentives that will make it profitable for them to continue doing business with you.

Running separate SMS and email retention campaigns is a mistake that most businesses make.

To increase their efficacy, companies should combine SMS and email retention programs.

This entails sending users frequent text messages and emails that provide updates on loyalty points, invites to sales events, or notices of the debut of unique products.

You'll improve the chance that consumers will return to spending their points with you by keeping them informed of their point balance.

Additionally, SMS and email retention programs may be used to get consumer feedback and discover their requirements and preferences.

By using this information to enhance your goods and services, your company will become more centered around the needs of its clients.

In the end, with SMS and email retention marketing, you may increase client loyalty and create a solid clientele of loyal, repeat clients.

Offer The Best Customer Service Possible

To keep consumers and guarantee their ongoing contentment, it is crucial to provide the greatest customer service conceivable. Providing exceptional customer service may be accomplished in a few main ways.

Responding quickly to consumer questions and concerns is first and foremost crucial. Calls, emails, and other communications should be returned as soon as possible. Second, being amiable and helpful is crucial. The sentiment that customers are cherished and that their business is respected should be present.

In order to fix issues and allay anxieties, it's crucial to go above and beyond. This can entail going above and above to track down a discontinued item or devising a novel fix for a particular issue faced by a client.

Businesses may develop devoted, happy clients who are more inclined to patronize them again in the future by providing the greatest customer service imaginable.

Use Customer Accounts

By providing clients with immediate access to prior orders and pre-filled shipping information, accounts may make repurchasing simpler. The key is to provide customers with the choice to register for an account after their initial order has been placed.

Improve Your Customer Support

Your ability to communicate with consumers and offer them the appropriate amount of support is aided by your support systems. Whether a consumer contacts you in person, via email, or via social media, having a live chat or help desk tool accessible may transform their inquiry into a sale or their grievance into a remedy.

Ensure A Seamless Client Acquisition Process

Once a transaction is made, the connection with the customer does not stop; rather, it is only the beginning of a new journey with new obligations. In order to build a favorable brand image, you should think about building smooth customer acquisition methods.

Consistently Delight Customers

To satisfy a consumer, you must go above and beyond their expectations. Excellent customer service, promotions, the sharing of personal anecdotes, or even the inclusion of presents, may all help with this.

Offer Personalized Shopping Experiences

An average of 40% more money is made by brands that perform personalization well than by brands that don't. This could involve giving customers personalized product advice, creating unique experiences, and educating them on certain products.

Collect Customer Feedback

Customers who get feedback can participate and feel heard. Your consumers will feel more involved and consequently more loyal if they believe that their input is valued rather than being treated as a number on a spreadsheet.

Makes Returns Easy

If they had a bad experience with a return, almost 33% of loyal consumers would stop shopping there. Good customer service includes simple and painless returns, which fosters loyalty among your clients.

Start A Customer Loyalty Program

Brand loyalty programs sometimes referred to as customer retention programs are an effective way to increase purchase frequency because they motivate customers to purchase more often in order to earn valuable rewards.

Optimize your loyalty program

One of the best ways to retain customers is to create a loyalty program that offers incentives for repeat purchases. By optimizing your loyalty program for your marketplace business, you can keep your customers coming back for more. Here are some tips to get started:

• Make it easy for customers to sign up for and use your loyalty program. The easier it is, the more likely they are to participate.
• Offer a variety of rewards that will appeal to your different customer segments. Consider discounts, free shipping, exclusive access to sales and promotions, and more.
• Keep track of customer behavior and adjust your loyalty program accordingly. Regularly monitor customer activity and make changes to keep them engaged.

By following these tips, you can create a loyalty program to help you retain your existing customers and attract new ones.

Build A Community

While there are many strategies businesses can use to improve customer retention, one of the most effective is to build a community. When customers feel a sense of connection to a business, they are far more likely to remain loyal.

There are a few key ways to build community. First, create meaningful interactions with customers. This could involve things like responding to their comments and questions on social media or sending personalized emails.

Second, give customers a platform to connect with each other. This could be done through online forums or in-person events.

Finally, make sure to keep customers updated on what’s happening with your business. Let them know about new products, special offers, and anything else that might be of interest.

By taking these steps, you can create a strong sense of community that will help improve customer retention.

Start A Referral Program

A customer referral program can be a great way to generate new leads and build brand loyalty. However, many referral programs fail to live up to their potential, often because they are too complicated or offer meager rewards. To create a referral program that is actually useful, businesses need to focus on simplifying the process and offering significant rewards.

One way to simplify the referral process is to integrate it with existing customer accounts. This way, customers can easily refer friends and family members without having to remember a special code or sign up for a new account.

Additionally, businesses should offer significant rewards for successful referrals, such as a product discount, store credit, or free products. By making the referral process easy and rewarding, businesses can encourage customers to spread the word about their products and services.

As an example, here’s how Nuud offers customers a useful referral program. When shoppers refer their friends with Nuud’s Happy Plan, Nuud gives the advocate 10% off their next order and the new customer who’s just been referred gets 20% off theirs.

Customer Retention Metrics You Need To Know

The key to improving your customer retention rate is understanding the underlying key metrics.

Repeat Customer Rate

Repeat customer rate is the backbone of customer retention. It measures the percentage of customers willing to make a second purchase from you. Measuring your repeat purchase rate is an excellent way of evaluating how well your retention strategy is actually working. The higher this metric is, the more willing customers are to return to your store.

When it comes to measuring retention metrics, it’s easy to get lost in a sea of complicated calculations.

Purchase Frequency

Purchase frequency shows you how often customers are coming back to buy from your store. This is especially important when you consider that repeat customers are often responsible for a significant portion of a store’s annual revenue—depending on the product category.

Calculating your store’s purchase frequency is similar to calculating the repeat purchase rate. Using the same time frame you chose for your repeat purchase rate (e.g., a single month), divide your store’s total number of orders by the number of unique customers.

Purchase Frequency = No of Orders Placed / No Unique Customers

Average Order Value

Once you understand repeat purchase rate and purchase frequency, it’s time to maximize how much each of those purchases is worth. This metric is known as average order value and refers to the amount of money a customer spends in your store on each transaction.

Just like purchase frequency, your average order value should be calculated using the same time frame you set for your repeat purchase rate. From there, all you have to do is divide your yearly revenue by the number of orders your store processed. Shopify reports also calculate this number for you.

When you write out this equation, it looks like this:

Total Revenue Earned / # Orders Placed

Customer lifetime value

Whether you hope to increase these metrics one at a time or simultaneously, the ultimate goal of retention marketing is to increase customer value. Customer value is the final piece of the puzzle because it helps you understand how much each customer is actually worth.

In order to calculate it, you need to already have a handle on your purchase frequency and average order value. By multiplying these two values together, you can truly see the fruits of your labor and understand the power of retention marketing.

Customer Value = Purchase Frequency x Average Order Value

Churn rate

The customer churn rate is the percentage of customers who’ve stopped being your customers during any given time period. There could be a number of reasons for your customer churn rate to increase. Reasons like:

• Customer expectations weren’t met (bad experience with a product or customer service)
• Found a cheaper or better alternative
• If it’s a subscription service, their payment method could have expired Network failures

The goal is to keep your customer churn rate as low as possible. But first, you need to find out what your rate is. To do that you can follow the equation written below.

Conclusion

Your current customer base is the best asset your store has. Customers already know your brand, they know your products, and they appreciate your service.

Focusing your time and energy on improving the experience for this group, as opposed to always trying to find new customers, can be a powerful way to supercharge revenues for your store. Make customer retention a priority from this day forth!