Having a loyal customer base is the secret to running a successful retail outlet. Just bringing people in through the doors is no longer enough; you’ll also have to find innovative ways to keep them coming back. And there are reasons why!
Retaining customers will cost you less than getting new ones. Plus, repeat customers are more likely to buy from you, and they help promote your business. But stopping customers from walking away isn’t an easy job—especially not when your competitors are waiting for a single chance to woo them away.
In this article, we’ll discuss six ways to delight your customers and keep them happy every time they shop at your retail store. We’ll also see how a midsize retail store improved customer satisfaction by implementing different customer retention strategies.
1. Reward customers for their loyalty
Customers these days have many retail outlets as well as ecommerce options to shop from. So if they’re coming back to your store, it means they’re loyal to your brand. Reward such loyal customers for every repeat purchase they make.
Create an attractive loyalty program with exclusive discounts, access to the store lounge area and limited-edition goods, and other special offers. Loyalty programs will help you build long-term relationships with your customers and offer them value for money.
In a study, 83% of consumers said loyalty programs make them more likely to continue doing business with a company, while 49% agreed they spend more after joining a loyalty program.
Here are some top-rated loyalty program software options to help you start a customer loyalty program or improve the one you already have.
2. Get referrals from your current customers
With a referral program, you’ll be killing two birds with one stone—you’ll not only retain your current customers but also get new ones through them. Referrals work great if your margins are thin and marketing budgets tight—32% of all verbal referrals convert into sales.
Reward customers for referring your store to their friends and family. Give discounts on products or services (to both the referrer and the referee), use gift vouchers, or recognize their contribution on your website or social media page. You’ll be surprised to know that as much as 52% of businesses use gift cards as a reward for customer referrals.
Here’s a list of referral management tools to get you started with your own referral program.
3. Provide a consistent experience across channels
Customers research products online before making a purchase offline, or vice versa. And if they find conflicting business information, product catalogs, or prices, chances are they’re not coming back to you. So focus on providing a consistent experience across marketing and sales channels, including your retail outlet.
By offering a consistent customer service experience, you’ll likely see higher revenues and profitability. That’s because satisfied customers will trust your business, which means higher chances of repeat purchases. Need some proof? Companies using omnichannel customer engagement strategies retain, on average, 89% of their customers.
Check out these top-rated marketing tools that can help you provide a consistent omnichannel customer experience.
4. Keep in regular touch with your customers
Don’t always wait for customers to reach out to you. Instead, engage with them proactively. A “hope you’re keeping safe” message, a “we miss you” message, an email about new launches or store-only offers—these small gestures will help keep the lines of communication open.
You can use social media, emails, text messages, live chat, etc. to communicate with your customers regularly. To avoid invading their privacy, ask which channels they would like to be contacted through. Also, check your communication frequency; too many messages can annoy your customers.
5. Surprise your customers every now and then
Everyone loves surprises, so why not delight your customers every now and then? For your retail outlet, such surprises will create a buzz among shoppers. A free manicure or pedicure, freebies, a lucky draw during the holiday season, a giveaway or contest, or even a simple “thank you for shopping with us” note will make the retail experience a memorable one for your customers.
You can also send birthday or anniversary wishes via email and offer special “store-only” discounts or gift vouchers. This’ll delight your customers, make them come back to you, and also get them talking to friends and family about their experience. According to a survey, 61% of consumers say surprise gifts and offers are the most important way a brand can interact with them.
A surprise birthday gift voucher from Sephora (Source)
6. Use data to personalize retail interactions
Data can help you know more about the needs and preferences of your customers. Use the data you’ve captured through loyalty programs, shopping carts, point of sale (POS) systems, social media, and other customer touch points to personalize ads and communication for your existing customers.
There’s a reason why you shouldn’t ignore personalization. About 63% of consumers expect personalized services as part of the standard experience they get while shopping at your retail store.
Here are some leading analytics tools to generate insights from the customer data you already have. You can use these insights to improve customer satisfaction.
Case study: How e.l.f. Cosmetics increases retention and revenue
e.l.f. Cosmetics is a retailer selling beauty products and skin care items. Its business model focuses on selling trending cosmetic products at prices lower than its competitors’. The company needs a strong customer retention rate to sustain this model and drive high transaction value per purchase. Here are five ways how e.l.f. achieves that goal:
- Runs an innovative referral program to build a customer community
- Communicates with customers proactively before they raise an issue
- Operates a tiered loyalty program to maximize value for each customer
- Uses data insights to personalize customer experiences
- Has a unique, theme-driven brand positioning
The company’s referral program, named Beauty Squad, aims to make customers feel they are part of a cool beauty community rather than just pushing them to get more referrals.
e.l.f. understands customers don’t always voice their displeasure. It sends apology emails in case of delayed shipments or other issues. It also incentivizes potential future purchases.
e.l.f. runs a tiered brand loyalty program that groups customers under different “loyalty brackets” based on the number of loyalty points they’ve accumulated. Different brackets have different rewards, which maximizes value for all customers.
e.l.f. uses predictive analytics and AI tools to build accurate customer segments, offer personalized product recommendations, and predict the likelihood of customer engagement.
e.l.f. has positioned itself as a high-quality, 100% vegan, cruelty-free, and paraben-free cosmetic retailer. With this unique positioning, it promotes itself as a “green” retail business, attracting loyal, eco-conscious customers.
The results: e.l.f. Cosmetics’ customer retention strategy, powered by a combination of loyalty-building measures, has helped increase revenue per user by 4.2%. The company’s ecommerce site has also registered customer retention rates between 55% and 65%.
e.l.f. embeds loyalty and referral program sign-up links in its customer emails (Source)
Conclusion: Use technology to retain your retail customers
To retain more customers, you’ll have to offer value beyond a purchase. We’ve already discussed six ways of doing that and also suggested software options to get you going. Software tools can automate your marketing strategy and customer retention processes, so you don’t get caught in admin work and have more time to interact with your customers in person.
Here’s a recap of the tools you can use:
- Customer experience management software
- Customer loyalty program software
- Referral management software
- Retail management software
- Data analysis software
- Marketing software
Need more help? Have a free one-on-one chat with our software advisors, who’ll help narrow down your options in 15 minutes or less.
The applications selected in this article are an example to show a feature in context and are not intended as endorsements or recommendations. They have been obtained from sources believed to be reliable at the time of publication.