Only 16% of companies focus on retaining a customer when all data points to the fact that acquiring a new one is at least five times more expensive.
In this modern digital world, with fleeting loyalties and diminishing attention span, brands and businesses are continuously trying to come up with new plans and ideas to keep their customers in the fold.
Today, this is largely driven by the data an organization can collect on its customers. Thanks to the proliferation of the internet and social media, much of this information is available freely. Brands are now studying customers’ behavior, expectations and motivations to learn more and more about what goes into their purchase cycle.
A large part of this is trying to engage with the customer once the purchase has been made. One common mistake that most brands (especially those in the e-commerce sector) make here is assuming that the customer will re-enter the sales funnel on its own.
Only 16% of companies focus on retaining a customer when all data points to the fact that acquiring a new one is at least five times more expensive. About 54% of potential clients are expected to make a purchase on their next visit. It then becomes even more critical to have post-purchase interactions and engagements with the customers.
Why engagement matters
Having an enduring and long-lasting relationship with your customers is vital in this fast-changing digital landscape. Experts estimate that - of any given target universe, the average conversion rate is about 1% to 3%. Considering that scenario, it will be easier for a business to convert a repeat customer.
Paul Farris, the author of Marketing Metrics, states that there is a 60% to 70% chance of converting a repeat customer. Unfortunately, most of the post-purchase engagement strategies today are restricted to servicing the customer, with respect to providing them with details about the shipment of their product and tracking the same.
This is one of the crucial parts of the purchase journey and holds importance for the customer, as is evident by the fact that email containing this information witness an opening rate of 70-80%. But since many retailers outsource their delivery system to courier companies, it becomes very difficult for them to utilize the opportunity for their benefit.
Several steps can be taken by businesses to actively engage with their customers at this level to bring them back in the purchase cycle.
How post-purchase engagement benefits organizations
Increased post-purchase satisfaction
Your work doesn’t stop at just selling the product. If you can find a way to create touchpoints with your customer after the sale has happened, the effects could be long-lasting.
For example, suppose a customer has bought a new dress, you can send out an email along with the delivery update, which can educate the customer regarding different ways that dress can be worn. Furthermore, you can suggest relevant accessories and more. This ensures a sense of satisfaction in the customer and creates a feeling of importance.
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In a study conducted by Accenture, a large portion of the customers were willing to share personal details in order to receive personalized suggestions. This reflects the fact that about 73% of customers prefer brands that provide them with customized solutions.
A big difference in customer loyalty is seen when the engagement starts even before the purchase occurs. Customers, especially millennials, look for great customer service. About 74% of millennials will switch brands if they are not satisfied. This number reaches 86% for GenXers and Baby Boomers.
Today, with the advancement of technology, it has become very easy to strike a chord with your customers. One big development in this field is the use of Artificial Intelligence (AI) in giving your customers great service experience.
A lot of e-commerce websites use chatbots to engage with their customers. This allows them to guide their customers throughout the shopping process whilst ensuring that they leave with a positive experience. According to research, 63% of the customers said they will return to a website that offers live chat support.
Reduced number of customer complaints
While you may be working towards providing an impeccable shopping experience to your customer, there are still variables that you can’t control. One bad experience and the customer can get frustrated easily.
However, all is not lost yet. How you react in a situation like these creates a lasting impact on the customer. For example, brands like GAP are doing a small survey at the time of delivery to find out about any unwanted problems and sentiments faced by their customers. This helps them in proactively tackling the situation in a quick and easy manner, and helps to ensure a seamless process in the future.
Higher volume of sales
In a cut-throat world of e-commerce, where every day a new brand springs up, just having a one-time customer is not enough. Brands are looking to increase their sales volume and are spending a great deal to achieve the numbers.
Providing a great post-purchase experience to your customers can help you in closing the gap in your sales numbers. Research shows that a mere 5% increase in the customer retention rate can increase profits by 25-95%. The marketing funnel has evolved and now includes both pre-purchase and post-purchase journey of a customer. In the post journey, there comes a phase called expansion, which suggests that existing customers are more likely to try new products and offerings.
Improved customer advocacy
The next phase in a customers’ post-purchase journey is advocacy. Here, the customers morph into marketers. They begin recommending a product, that they are happy and satisfied with, to their loved ones and in their friend circle. This helps a brand in growing a customer base and business.
Increased brand equity
Positive word of mouth and constant interaction of a customer with the brand in the digital media space results in an increase in awareness about the brand and gives a lift to its perceived image. This then eventually leads to an increase in brand equity.
Positive interaction between you and your customer also leads to an increase in the worth of the intellectual and physical properties of the brand. Thus, resulting in increased brand worth.
Devising a strategy
A relevant marketing strategy that projects the right brand image of the company to its customers and strives to provide the best customer experience will benefit the organization greatly. Tracking the right metrics and providing the right experience must be based on the customer journey and must keep the multiple touchpoints during that journey in mind.
Here are five things you must keep in mind while devising your own strategy to gain customer loyalty:
1. Design the engagement program on the pillars of brand essence and customers
As they say, communication is never one-sided and so is this. When designing a plan to build customer loyalty, it is very important to keep the needs of both sides in the line of view. A great engagement plan will:
Cater to the unique needs of its customers whilst focusing on building a lasting bond.
Adhere to the brand’s identity to maintain the difference in the customer’s eye vis-à-vis another brand.
2. Quantify the impact of the program
A well-crafted plan will not only focus on sales. Although that is the aim. However, if you focus only on sales numbers, you are bound to falter at some point. It is important to use this opportunity to create a wonderful shopping experience for a customer by improving on the following areas, using the input received through the interaction:
Increasing the efficiency of the servicing/sales team.
Proactively tackling any complaint or problem that may arise by learning from past experiences.
Finding ways to save costs for both the customer and the brand.
Providing fulfillment to the customer.
Reducing the number of returns from the customer.
3. Create a roadmap
Once everything is in place w.r.t. the objectives and directives of the plan, it is now time to get the entire team behind it and create a framework to accommodate everyone effectively along the customer journey. You will require all the key parties to extend support for successfully carrying out the plan.
4. Address problems in order of priority
To test your plan, it will be advisable to launch it keeping any one goal, for example, providing fulfillment to the customer. Run the program for a stipulated period and then go back to the table and analyze the metrics of your run. This will give you confidence and will help you in molding the plan as and when required.
5. Track and measure the impact of the program
The success of your program will depend on the goal that you set at the beginning. For example, a reduction in the rate of returns or an improvement in social media engagement might tell you that the steps taken by you are working in the right direction. Measuring the impact of the program is necessary for deciding the longevity of the program.
How to effectively drive engagement
You have set a goal for yourself and you have devised a strategy. It’s time to skillfully implement the same. Follow these 9 ways to achieve an effective post-purchase engagement:
Personalized confirmation and delivery emails
Brands have set-up automated systems to send out emailers to customers when they have made a purchase and when the product has been shipped. A little innovation can turn these touchpoints into a wonderful engagement tool. These post-purchase emails can be designed to provide the customer with customized information like informing them about related products to complete the set or ways to use the products they have bought.
Similarly, the emailer can contain information about upcoming launches, call to action buttons asking the customer to engage with you on Facebook, Instagram, Twitter, etc.
Ask for Product Reviews
One of the very successful engagement ideas is to ask your customers to submit a review post they have experienced the product. In the world of social media, everyone wants to tell their story, experiences about a service or a product.
These reviews work in two ways, first as a reliable information source for prospective customers (an estimated 80% of buying decisions taken online are influenced by the reviews posted on e-commerce websites and other portals) and secondly as a source of information for the brand to improving upon itself.
This video testimonial from Gillette is a great example of how a brand can encourage customers to turn into advocates for their product, and in turn, improve brand equity and drive loyalty.
Respond to customer queries on all platforms
Any communication, good or bad, is a two-way street. Especially in the social media universe, no interaction is as good as a bad interaction. Plus, it speaks volumes about a brand that engages with its customers on social media platforms, be it for a general query or allaying their issues.
A customer feels more connected to a brand that strikes a one-on-one conversation with them. This communication also has a huge impact on a prospective customer.
Send replenishment emails
Everyone wishes to have someone who cares for them. A brand too can fulfill that role, just by sending timely replenishment emailers. This ensures that the customer will always the product in their stock and that they will not consider any other seller. A study conducted by RetailMeNot found out that 67% of Millennials prefer email reminders from the brands.
This is possible when a customer has created an account with a brand’s website by filling in all the details. For example, during birthdays and anniversaries, a customer often looks for ways to treat themselves or their loved ones. Sending a timely emailer with customized offers and products may result in a conversion. This email from Simons is a great example:
Running a loyalty program for recurrent customers is an excellent way to boost customer engagement. It is found that customers who are enrolled for loyalty programs and earn rewards or discounts from the same, tend to return again and again. Offering regular promos and discounts can help a brand in retaining the customer for life.
Build a community
One of the key factors in creating a lasting relationship with a customer base is to develop a community. Social media platforms provide an excellent solution to this effect. Most of the communities around several brands are already existing and were created by customers. Though the brand doesn’t own the page, and so can’t control the communication or information flow, it still can steer the conversation as a party.
Existing customers can be a very staunch advocate of a brand to a new customer. According to a survey conducted by The Manifest, about 96% of the people interact with the brands they follow on social media. A huge potential waiting to be tapped.
Most e-commerce brands, today, are focused on getting that first sale with a customer. They should be more concerned about the second. A survey by Adobe found out that out of 100 first time buyers, only 30 return to make a second purchase. But out of 30, almost 15 will come back to make third order.
The brand can achieve this by creating value for their customer base. Emailers with personalized offers and cross-sell/recommendations can be sent out. This increases the chance of conversion as most customers look forward to communications like these. This makes them feel loved and connected and they notice that the brand is really invested in having them in the fold.
It is extremely necessary, with this constantly moving landscape, to think beyond making sales. Selling is but a very small part of today’s purchase cycle. Brands must find new ways to connect with their customers. Getting customer loyalty is an uphill task but one that will result in great revenue numbers. Communication, mostly one-on-one, is the key to the customer’s mind and heart. It determines the future course of interaction between the brand and the customer. A marketer’s goal today should be to keep their customers engaged with post-purchase activities in order to bring them back to shop again and again.
Koushik Marka is the founder and CEO of an explainer video production company titled Studiotale. With strong entrepreneurship and professional skills, his qualities do not end there. With expertise in Vector Illustration, 2D Animation, Motion Graphics, and Digital Marketing, he loves what he does. Apart from being a work enthusiast, his off-work preferences are playing video games and traveling. You can contact him on LinkedIn, Facebook or Twitter.
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