Known and trusted by eCommerce brands around the world, Yotpo are the go-to solution for customer reviews, loyalty, referrals and SMS marketing.
A valued Statement partner, take a read of this featured blog from Yotpo to find out why DTC brands need to focus on the often-forgotten customer retention strategy.
Customer acquisition is getting more and more difficult. Online marketing channels are flooded with paid media, driving down inventory and driving up costs. This competition for new customers has led to many eCommerce brands shifting their focus and budgets to retention, which is a good thing.
Spending on loyalty and retention marketing is expected to increase by 30 percent this year meaning every brand everywhere is competing for consumer attention, and once they have it, they’re hyper-focused on maintaining it. But, with so many brands distracting consumers every day, how can your brand be sure you’re building a retention strategy that’s able to keep their attention?
The strategy is simple - spark a relationship by building experiences that create an emotional connection. To create those experiences effectively, brands need to get hyper-personalised via the two most effective components of a successful retention strategy: loyalty and SMS.
how customer retention benefits DTC brands.
Many DTC brands focus on acquiring customers but have no strategy in place to keep them engaged post-purchase. This presents an opportunity for brands who do put the time and resources into building retention — a chance to turn first-time customers into loyal brand advocates.
Here are some of the benefits of a good customer retention strategy:
Lower costs: Even without factoring in ever-rising customer acquisition costs, retention is almost always cheaper. You already have those customers on your email and SMS lists — now all you have to do is figure out the best way to leverage them.
Increased customer lifetime value: Customers that are loyal to a brand will make repeat purchases and spend more over time, leading to more valuable customers. It’s a much lighter lift to convince one customer to make three purchases than it is to persuade three customers to each make one.
More referrals: Happy, loyal customers will help increase brand awareness through word-of-mouth. They are also likely to generate positive product and brand reviews online, helping to win over more new customers.
Better data: The more a customer buys from you, the more data you have on that customer. Those metrics can then be used to personalise the customer experience, leading to more engagement. You can also solicit feedback from your return customers, which will help you optimise products and the overall customer journey.
A successful retention strategy is a cost-effective way to boost loyalty and revenue, while giving you an opportunity to build deeper relationships with your customers and deliver better experiences.
One of the best tactics for retention is turning your focus toward SMS and loyalty.
sms and loyalty drive retention.
Two of the biggest drivers of customer retention are SMS marketing and loyalty programmes. With the combined power of both channels, your brand can always deliver the right offer to the right customer at the right time.
A loyalty programme captures your most loyal customers, and SMS builds those connections to drive continued engagement. According to a recent Yotpo consumer survey, almost half (49 percent) of consumers have already signed up to receive SMS messages from their favourite brands and loyalty updates are among the top messages consumers prefer to receive. In fact, over 76 percent of loyalty members want to sign up to receive SMS messages if they’re available.
Loyalty members expect the exclusivity and personalised experiences that texting provides — they want to hear from you directly about the information that matters most to them.
Texting is a low-effort way for consumers to constantly engage and earn rewards. Loyalty members care deeply about early access to sales, product drops, and other exclusive events. SMS enables VIP members to cut through the noise of additional marketing communications and interact with the brand to enjoy their benefits right away. Over 40 percent of shoppers said a text with a countdown to when a sale or offer expires would encourage them to complete a purchase.
retention needs to be mobile-first.
So why are loyalty and SMS a better fit than, say, loyalty and email? When it comes to effective marketing, it’s important to meet customers where they are, which is, increasingly, on their phones.
71 percent of all time spent online in the UK is on a smartphone. And that time is increasingly spent on shopping. In fact, mobile commerce is expected to account for nearly 50 percent of all eCommerce by 2022.
One of the primary ways SMS marketing can maximise the value of a loyalty programme is by leveraging the sense of urgency that a text evokes. Compared to email, where messages can languish in overcrowded inboxes and spam folders, engagement with a text happens in real-time — over 90 percent of messages are read within three minutes of being received!
This sense of timeliness is what leads many consumers to opt-in to receive texts from a brand. In fact, Yotpo data shows that over 46 percent of consumers would sign up for SMS marketing messages from a brand in order to know immediately about promotions, offers, and updates — even if they already receive emails from that brand.
how to use retention strategies to drive emotional connections.
A business builds the foundations of loyalty by understanding their customers — what products they like, what types of messages they engage most with, and which recommendations to make and when. These moments make a customer feel special and more connected to a brand, increasing their emotional loyalty, which is one of the strongest drivers of retention, enrichment and advocacy for eCommerce brands.
Throughout a customer’s loyalty journey, you can send tailored SMS messages that keep them engaged. In between purchases, you can text shoppers to remind them of engagement-based behaviours that can earn them points, like following you on social media, reading on-site content, or leaving a review.
In addition, you can use loyalty data to personalise texts to increase engagement. Let VIP tier members know they’re close to levelling up or invite new members to take a quiz for extra points.
By integrating your SMS strategy with your loyalty programme, you can learn essential information about shoppers by simply texting them and asking questions. Collecting this freely offered information about customers, also known as zero-party data, helps your brand to build more detailed customer profiles that your loyalty programme can leverage.
Once your brand has that customer data on hand, you can send more personalised recommendations directly to each shopper via text. For loyalty members especially, the experience of accessibility to a brand is the differentiator between good and forgettable customer experiences.
retention drives customer acquisition.
Though it’s often considered as such, customer acquisition and retention aren’t an either-or proposition. The more customers you acquire, for example, the more customers you have to convert to loyal brand advocates.
Likewise, the more engaged and satisfied your repeat customers, the more likely they are to make referrals to friends and family and generate positive ratings and reviews. Success for DTC brands comes down to finding strategies to catch them at every stage of the buyer journey and beyond.
yotpo and statement.
More than simply reviews, Yotpo is the leading solution provider for visual marketing such as user-generated content, customer reviews, referrals, loyalty programmes, SMS marketing and more.
With features to power the whole customer journey, there’s no wonder Yotpo is a firm favourite in many of our projects. Implementing the solution across a range of the brands we work with, Yotpo supports the likes of NEOM, Taylors of Harrogate and Slendertone.
If you want to find out more about how this platform could help you grow your eCommerce business or you have any questions, don’t hesitate to get in touch with the Statement team.