Pareto Principle states the 80/20 rule. It’s a rule you’ll find highly intriguing. If explained in one line, it would boil down to “Maximum amount of results comes from a very minimal amount of inputs.” But, how is this relevant to your business you ask. According to this principle, 80% of the revenues in future will depend on 20% of your current eBay customer base. With the holiday season around the corner, it makes customer retention strategies important to gain loyalty during Holiday marketing. It creates a customer base for your eBay store that’s loyal and consists of repeat customers.
Managing Customers is a very important part of any business. An increased customer loyalty of mere 5% can give you profit of upto 25%. It makes customer retention even more important. When you start looking at your customers you begin to realize how satisfied they are, how well you’re managing your services and how much are the chances of them coming back to you. Moreover you get to know the mistakes you’ve been making and rectify them to improve significantly. Let’s dive into the blog to understand the entire customer retention process in a much better way.
What is Customer Retention?
Customer Retention means being able to retain your customer over a certain period necessary. High Customer retention rate implies the business has a repeat customer base who are loyal and did not switch to some other brand.
Perks of retaining Customers on eBay
Retaining your eBay customers will mean you’ve built a rapport with them. They trust your services and products and are willing to make repeat purchases from you. This in turn not only gives you a lifetime customer but also increases your revenue.
Moreover, retaining customers is always cheaper than acquiring new customers. And, you get free word of mouth promotions from them too. eCommerce is an industry where mistakes come in as a part of the package. And, you’re bound to make one someday while selling on eBay. The retained customers in such a scenario are more forgiving when compared to newly acquired shoppers.
Why is Customer retention important?
Every customer out there is looking for a brand they can trust with their money. Gaining that trust and keeping it that way makes customers rely on your services more.
- It’s easier and cheaper to retain a customer than finding a new prospect.
- Making a successful sale with a new buyer is 10-20% while for an existing customer it climbs to 60-70%.
- Existing customers spend 30% more and are 50% more likely to buy a new product you launch.
Calculating your customer retention rate
When we Calculate the customer retention rate it gives you a statistical figure to work upon. But, before we begin let’s keep in mind that the retention rate will vary if you keep shifting the range of duration for which you are calculating your business’s customer retention rate. Keeping a fixed duration will help you in future calculations and make comparisons easier.
The customer retention formula that gives you the opportunity to evaluate your store’s performance looks like this,
Let’s understand with an example,
Suppose you want to calculate the customer retention rate for a period from 1st October to 31st October. So we’ll consider a few factors to calculate the rate.
- The total number of customers you had before this given period started. We’ll take this number as 150 (So that the calculations are easy).
- The number of customers you gained in the given period that is to be considered. Let’s take this to be 40.
- The number of customers you lost during this period. Let’s take this number to be 25 (It’s sad but, you’ll lose some).
Customer Retention Rate = (Customers When Period Ends – Customers Acquired in the Period) / (Customers in beginning) X 100
Now, using the formula we get,
(165-40)/150 = 0.8333*100 = 83.33%
How to Increase Customer Loyalty?
Provide Impeccable Customer Service
The holiday season not only brings with it the sales, but it also brings returns too. You will have to deal with unsatisfied customers who want returns and exchanges. Having a great customer services team that is prepared to deal with the surge once the holiday season ends is of supreme importance.
It is during the holiday season your response time to the customers’ problem will determine your future relationship with each other.
Old is Gold! Email marketing may be the oldest of all the marketing techniques but it is still effective. According to studies email marketing still is the most effective with 4400% ROI or in other words generating 44 times the investment made. That being said automating the emails you send to your eBay customers can have great outcomes.
Try including the following email campaigns in your customer retention strategies
- Welcome email
- New Products email
- Upselling email
- Abandoned Cart email
- Thank You email
Quality has to top your list of things to acknowledge when operating your eBay store. A store gets judged by the product it offers and the product by its quality. Maintaining a high-quality production that serves the expectation of buyers will make them come to you automatically. It will lead to gaining their trust and advocacy.
Start a retargeting campaign. With retargeting, you can easily reach out to customers who purchased from you in the past. It is a great way to retain and reroute your customers back to shopping at your store.
With retargeting you can also retain those who abandoned the site midway. The users can be someone who:
- Already purchased from your site.
- Viewed only one product and left.
- Abandoned the product after adding it to the cart.
- Visited your site once.
Integrate Your eBay Store
If selling only on eBay, develop a store and integrate your website to the eBay account. Having an address to go to virtually, makes you credible and helps in getting established as a brand. Getting an online store is pretty simple nowadays.
Integrating the store will let you manage the entire selling process from the app itself. You won’t have to look out for Inventory, Shipping, Order and other related activities on multiple platforms. The app will do that for you. It means there won’t be any unhappy customers because of cancelled order due to overselling, or shipment delays. Also, it will give you more time to tend to your customers’ feedback.
So, select the framework you wish to use for your store and get your store ready from eCommerce solution providers. You can also find apps that integrate eBay stores to MagentoBigCommerceShopifyWooCommerce and many other frameworks.
When shipping orders for your customers, insert a Thank You note or fliers. You can also send small gifts associated with your brand enclosed in the shoppers’ packages as a note of appreciation.
Pens, Pocket diaries, Pocket Calendars can be some of the few things with your name on them. This way every time the buyer will use your gift, they’ll be reminded of your brand which ultimately will make them come to you for future purchasing.
Ask For Feedback And Act On It
It’s a simple equation. The better your customer service, the better your chance in gaining your customers’ trust. Every customer feels empowered when there is a possibility of two-way dialogue for his issues. If a customer has any issues or is unsatisfied with the services, you ought to be aware of it.
Knowledge is power, so use this feedback as your knowledge base to leverage your customer loyalty by improving your performance. And in turn, enhancing the customer retention rate. Having better feedback and a great seller rating has added benefits too as it helps you with product visibility on eBay.
Loyalty program is something that makes its way into marketing strategies of small or big eBay sellers alike. If you’re selling on eBay, try reaching out to your customers and provide them with certain loyalty programs.
Around 69% of customers agree that a customer loyalty program influences their choice of retailer. There are various ways to get your customers to come back for more and in turn earn their loyalty. You can introduce any of the following or all depending on your business model.
- Monthly Offers
- Loyalty Cards
- Points-Based Rewards
- Early Access to Sale
No matter how well you plan your Holiday season sales your first-time shoppers will vanish at the same rate at which they got to your store. Customer retention plan is what comes into play when you want them to convert into loyal and repeat customers.
Work hard to create your brand on value and follow these Customer retention strategies we’ve covered today. Also, keep calculating your Customer Retention Rate from time to time in order to calculate growth.
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