Your business depends on repeat purchases. To get customers to buy from you again and again, you must lower customer attrition.
In this guide, we cover the basics of customer attrition, otherwise known as customer churn. We then provide a framework to eliminate attrition with effective retention strategies. Lastly, we showcase a number of tactics you can implement.
To skip straight to the tactics, click here. Otherwise, let's start!
What is customer attrition? A definition.
Customer attrition is when a business losses a customer. While there are many ways to measure customer retention rate (we have a preference), many consider a customer lost when they no longer have a relationship with you.
In eCommerce, many terms are used for describing how to lower customer attrition. You may hear customer retention, lowering customer churn, customer loyalty, or even broader terms such as lifetime value and customer lifecycle marketing.
How to prevent customer attrition: An attrition prevention framework
Understanding how to lower customer attrition depends on understanding customer relationships.
The first insight is that relationships are dynamic. There is no stasis. Each customer is either incorporating you into their lives or slowly forgetting your existence.
To help understand customer attrition we built a quick framework to think through the various stages in keeping customers.
Advanced Reactivation Campaigns: See how Barilliance combines online and offline data, automatic segmentation, and triggered behavioral emails to create advanced reactivation campaigns. Request a demo here.
Tactics to lower customer attrition
Below are a variety of tactics to reduce customer attrition. To create your own customer attrition prevention strategy, consider implementing one or more of these ideas.
1. Create replenishment campaigns
Many products have natural lifecycles.
Consumables, food, and pet products are all consumables that customers go through quickly. Even durable goods, such as books, can have high frequency buyer segments.
Understanding how quickly customers go through your products and developing a replenishment campaign to drive them back to your store is a great way to reduce customer churn.
Below is an example from the high growth healthcare brand Tula.
2. Use customer data to influence merchandizing
Determining which offers to bring back customers can be difficult. However, through a combination of customer insight and AB testing, you can dramatically increase your success.
In a recent interview with Daasity, Zack Abbell of Tula was asked "What data has been most impactful to the organization to date." His response highlighted data's role on Tula's merchandizing decisions.
“Lifecycle campaigns for email understanding what was bought first vs. subsequent purchases” - Zack Abbell, VP Digital Marketing, TULA
Learning which products have the most traction ought to influence how your promotions work. Personalization software like Barilliance gives you the ability to override AI suggestions for a given segment and align personalized recommendations with merchandizing needs and insights.
Dynamic Product Recommendations: Don't use static product recommendations. Click Here to see how Barilliance personalizes recommendations on your home, category, and product pages.
3. Identify bright spots in your customer base
A bright spot, simply put, is an area where things are going well. The technique was brought to focus in the book Switch.
In the context of eCommerce, your loyal customers are the bright spot. And, we can learn a lot from customers who are engaged with us. What products do they purchase most often? What is their true replenishment rate? And endless other quantitative and qualitative data points.
Take learnings from your loyal customers and deploy them across your site and in your customer reactivation campaigns.
4. Develop excellent loyalty programs
Loyalty programs have the potential to extend lifetime value through continued purchases.
While the "how to" of creating a loyalty program is beyond the scope of this guide, below are a few examples.
First is Dell. Their program "Dell Rewards" gives immediate cash like rewards for each purchase along with free delivery.
Unexpected shipping costs are the top reason for cart abandonment.
Coupling free expedited shipping with exclusive discounts and rewards is an excellent way to bolster conversion rates.
Above is the first welcome email into Dell's loyalty program.
One of my favorite examples of successfully using loyalty programs to prompt repeat purchases is Starbucks. Their loyalty program is integral to Starbuck's omni-channel strategy, driving in store visits from a combination of app notifications, text messages, and emails.
Personalization is a fundamental tool to prevent customer attrition.
We put together a variety of resources to help eCommerce stores select the right personalization partner for them. First, I suggest "How to Select a Personalization Vendor". It covers the most important questions you should ask as well as the most common pitfalls in personalization technology.
Second, you can gain some inspiration by checking out a series of eCommerce personalization examples.
Finally, if you think Barilliance may be able to help, request an in-person demo here.