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Top 10 Customer Retention Strategies for D2C Brands in 2022

Prioritizing customer retention is an incredibly important part of growing a sustainable business. Find out how you can understand how loyal and satisfied your customers are, how strong your customer service is, and your areas of improvement by implementing retention strategies.

April 6, 2022
mins read
Top 10 Customer Retention Strategies for D2C Brands in 2022

Customer retention

Over half of a company’s revenue comes from repeat business, which means that your past customers could be crucial to your company’s future success. Studies estimate that acquiring new customers costs five times more than retaining an existing customer while, increasing customer retention rates by 5% increases profits by 25% to 95%.. Moreover, the success rate of selling to an existing customer is 60-70%, while that of selling to a new customer is only 5-20%. 

Customer retention refers to the actions a company can take to increase the profitability of each of its current customers and to increase the number of repeat consumers. A plan for customer retention ensures that your business is actively maximizing the value it provides to its customers. If you’ve worked hard to gain a customer’s trust, you want to ensure that they remain loyal to your brand and return to gain more value.

Customer retention metrics

Customer retention is crucial for determining your brand loyalty. Thus, it is important to assess the success of strategies by measuring their effectiveness. The three major metrics by which you can measure customer retention are:

  • Average Order Value

Average order value or AOV is an important metric for evaluating pricing and online marketing performance. It refers to the aggregate amount of money spent by customers while placing orders. It is calculated by dividing total revenue by the total number of orders. AOV is comparatively easier and cheaper for retaining customers rather than trying to increase traffic to the website.

  • Repeat Customer Rate

Repeat customer rate determines the percentage of customers that return to the company after the initial purchase. It shows the impact of initial promotional strategies on encouraging customer retention.

  • Purchase Frequency

Purchase frequency measures how frequently customers make a purchase in a specific period and is calculated on an annual basis. Combining it with Repeat Customer Rate can help you identify the frequency and number of customers retained over time. Additionally, this can help you target customers according to their behavioural patterns, thereby optimizing marketing efforts.

Top customer retention strategies for D2C brands

1. Improve Customer Service

The ability to 'wow' your customers through improved customer experience leads to more user engagement and, as a result, higher customer satisfaction and business success. It is necessary for a customer to feel that they have had a favourable experience with your company during each interaction before becoming loyal to you. This entails placing a high value on providing excellent customer service. You can ensure that your customer service is of the highest quality by recruiting skilled sales and customer service specialists who will act as the “face” of your company. Your representatives should be well-presented, informed, and attentive to the needs of every customer. Customers will feel more appreciated and cared for as a result of this.

2. Offer Discount to Loyal Customers

People prefer to purchase items on sale, and the most crucial role that a promotion performs is distinguishing your company from your competitors. We all anticipate that higher-quality products and services will be more expensive. A discount or credit on a second purchase or even to customers who have not done business with you for an extended period, on the other hand, could be a terrific strategy to draw them back and thus raise your return customer revenue. For example, you may choose to provide free delivery on future orders or a discount of 10% off on their next order.

3. Start A Customer Loyalty Program

Customer loyalty programs are an excellent technique to improve customer engagement since they provide customers with an attractive incentive to make more purchases. A membership club, for example, that pays members for exceeding a specified spending ceiling with exclusive events, gifts, or other incentives would help your business generate more sales. You have the freedom to be innovative in the form of the loyalty program you establish and the offers you make. The fact of the matter is that you want to make your recurring customers feel like VIPs every time they visit your business. Allow them to know that they are valued and demonstrate this value via your behaviours so that they will continue to have a reason to return.

4. Use Customer Accounts

A customer account enables customers to communicate with the merchant to develop a more personal connection. Transaction history, tracking numbers, and loyalty accounts can all be stored on these accounts. Maintaining a customer account may frequently result in customers being automatically enrolled in loyalty programs. Making a customer account encourages recurring business, and customers are enticed to take advantage of the company’s loyalty program or keep track of their previous orders. Above all, the key to convincing customers to establish an account is to either give a bonus if they sign up before making a purchase or provide the option to make an account after purchasing direct invitations.

5. Offer Personalized Experiences

You’ll be in a better position to provide your customers with exactly what they need when you understand who they are, what they need, and what their pain points are. It will help to attain customer retention and encourage repeat purchases for additional transactions with your business. When it comes to shopping experiences, 91% of customers say they prefer brands that offer more personalized shopping experiences tailored specifically to them and their requirements. Thus, to maintain customer loyalty, personalization must be a significant component of your customer retention strategy.

6. Email Campaigns

Maintain a targeted email list by employing particular funnels that deliver the appropriate email marketing communications to the right recipients. You can segment customers according to demographics, for example, to provide them with the most tailored and relevant offers and material possible. Giving your customers high-quality email marketing messages will help them become more familiar with your company. It will also allow you to provide them with great content delivered to their inbox, and, most importantly, it will ensure that your company is at the forefront of their minds when it matters the most.

7. Integrate SMS Marketing Campaign

Text messages have engagement rates as high as 98%, even though less than 15% of businesses employ SMS marketing to communicate with their customers. According to another fascinating figure, by 2025, it is estimated that 61% of the world’s population will connect to the internet using mobile devices. This should encourage you to consider implementing an SMS marketing plan. You can get started quickly by integrating a text marketing campaign that includes a promotional offer that directs visitors to your website. You can effortlessly communicate with all of your customers, whether it’s through simple text scheduling or more elaborate periodic SMS and event-based messaging.

8. Develop social media marketing strategy

Social media platforms introduce new features and technology, allowing businesses to interact and retain customers. According to studies conducted on Instagram, 70% of shopping lovers use the platform to explore new product offerings. Using social media, you may share new items and build a brand culture by conversing with your fans and engaging in discussions with them. It is also a great means of gathering feedback, with a research stating, 47% of shoppers will use social media to voice their opinions and grievances.

In addition, the live features of social media platforms have evolved into effective marketing tools that allow you to engage with your customers while also marketing your company. An important figure for live video is that 82% of customers would choose to watch a live video rather than read a blog post, which is a substantial number for the medium. As a result, you must choose your marketing strategies very carefully.

9. Offer Fast Shipping and Easy Returns

Customers today expect to receive what they want, whenever they want it. According to a recent survey, they are prepared to pay extra for next-day delivery, and more than a quarter (27% of customers want their products to arrive within 48 hours. Amazon has been a pioneer in the provision of expedited shipping services. Its Prime subscribers enjoy some of the quickest shipping speeds available from any business, and this has shifted worldwide expectations in the process. To remain competitive, your company should see shipping as an area where it can ‘wow’ the customer by being on point and on time with delivery. Additionally, guaranteeing returns that are as simple as possible are appealing to customers, encouraging them to become loyal customers.

10. Follow Corporate Social Responsibility Program

When it comes to customer retention, companies need to think outside the box. Incorporating a CSR plan and improving business culture may promote customer engagement and morale, increase revenue, and enhance customer satisfaction and loyalty. Customers nowadays are more socially aware and well-informed than ever before. More than seven in ten customers say they’d rather spend their money with companies that share their values than those that don’t. Most customers (70%) believe they’d be willing to pay an average of 35% extra for environmentally friendly brands. It’s easier for customers to ignore or support brands that take a stand for something than for those brands that don’t stand for anything.

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