Customer retention: remember that?

Customer retention is one of those topics which keeps cropping up because, let’s face it, finding customers, getting them to buy stuff online, and making sure they keeping buying stuff online is what e-commerce is about. Easily said, difficult to do.

It’s a complex business, which is influenced by numerous factors and plagued by its own set of challenges. One of the major the problems facing businesses is the gap between their perception of what consumers want and what the consumer actually wants. Here are a few impulses I got from reading the recent IBM study “From Social Media to Social CRM”. Maybe they will help gear up your thinking on the topic as well.

» “We discovered significant gaps between what businesses think consumers care about and what consumers say they want from their social media interactions with companies. In exchange for their time, endorsement and personal data, consumers expect something tangible. But businesses rank getting discounts and purchasing as the least likely reasons consumers interact with them.” – IBM «

Let’s face it, Facebook is mainly used for connecting with friends and family and the simple pleasures of voyeurism. If we interact with a brand, it’s because we’re being driven by one of three aspects of human nature: greed, the hunter/gatherer instinct, and our drive to self-image. Whilst businesses still think that a ‘like’ might lead to conversion, humans are basically greedy. If companies want to be part of our social media lives, we expect something in return: something we can hold, smell, taste, or at least know about before anyone else. In IBM’s best practice example, the Cold Stone Facebook page got the most out of giving consumers the freebies they desire by making it personal. They didn’t just give away coupons; they let you send them as a personal gift to a friend. This not only made use of our desire for free stuff and the real social nature of social media, it also tapped into our desire to look good in front of others.

Social commerce: telling our own story with your products

In e-commerce, we often talk about the need for storytelling, and with good reason. But brand interaction on social media is not just about telling the story of that brand or product. Social media is where we create the fiction of ourselves. When we send someone a free ice cream, we’re the nice guy. If that ice cream happens to be eco-friendly, vegan and come in pseudo gourmet flavours – all the better. The cult of cool never dies and we all want to belong. Vegan, eco, hipster, charity or a social cause etc are all potential UPSs. On this note, Facebook’s DataSift tool could be a step in the right direction for companies to get a feel for what is being talked about on FB.

The customer journey is a long one

Another thing which businesses sometimes forget in their excitement about social media, is that each new customer means an investment in a pre-supposed customer relationship life-span. Businesses shouldn’t lose sight of the basics: what is the investment and how many purchases does a customer have to make to recoup this investment?

Like storytelling, we also talk a lot about the customer journey in e-commerce. But it is easy to forget that the customer journey is not just the journey from site visit to purchase, but also from first contact to last contact in the life span of your relationship with the customer.

Customer bonding strategies have to adapt to the stage of your customer relationship life span. e.g. gaining initial interest, securing loyalty, possible reactivation after a drop-out period etc. Drop-out periods are normal, but they can also be triggered by a shop restructuring, reorienting or just making a new website. Transferring the existing customers to the new version or vision of your shop is a vital task.

Drop a note once in a while – just like mother taught you

A well planned and timed email marketing campaign is a huge help here. Make your emails personal rather than expensive. An incentive to reconnect is great, but if you still haven’t recouped on our initial investment in the customer you may not want to risk it. The personal touch should never be missing anyway, but it can also be an alternative way to reconnect both electronically and even in hard format. Go beyond the call of duty – gestures that aren’t directly linked with a push for purchase, like free samples, a personal message in the last shipment, a birthday card, or just a reminder that the shop is there and missing you can all help to reconnect with the consumer. And don’t forget that if all else fails – ice cream is always a winner.