May 2, 2022
May 2, 2022
The market value of the fast exploding e-commerce industry is expected to grow to USD 16,215 billion by 2027 (Meticulous Research) globally. While the e-commerce companies battle it out for a larger slice of the pie, they also need to maintain a laser-sharp focus on retaining their existing customers. In the new digital economy, they need to constantly innovate with agile business models to promote their products and services in a personalized manner to avoid obsolescence.
Many think that retaining e-commerce customers is straightforward. Unfortunately, providing a great product or a fast shipping experience is not enough for retaining customers. With increasing competition and demand for a seamless customer experience, e-commerce customer retention is becoming increasingly difficult.
But why focus on retention?
Retaining customers not only helps in reducing acquisition costs but also in increasing the customer lifetime value, directly impacting the bottom line. Research shows that a 5% boost in customer retention increases profits by 25% to 95%. While acquiring new customers is also important, building a long-term relationship with an existing customer is 16 times more cost-effective than acquiring one.
Hence, for consistent growth, it’s critical for e-commerce companies to focus on retention and employ customer-centric strategies that help in bringing back customers to the website/application. Below are a few proven customer-driven tactics that can help e-commerce organizations increase customer retention and improve loyalty –
Over 91% of consumers are more likely to shop from brands who recognize, remember, and provide them with relevant offers and recommendations (Forbes). Engagement across the customer funnel is important for both converting users into customers and reactivating existing customers.
Here are few effective forms of customer engagement –
Effective customer onboarding
While often ignored, an effective onboarding program is the first step you can take towards creating customer loyalty. It helps customers learn about your products/services and the mission of your company. This in turn allows them to choose the right products and gain maximum value from your offerings.
Promoting Offers/New Launches
If you want customers to return back and buy from you after their initial purchase, it’s very important to constantly be in touch with them and build a relationship. There are multiple strategies e-commerce companies can use to achieve this, including –
Let’s understand this better using an example. Assume a user is looking to purchase a specific product that is currently out of stock. To ensure he/she visits again when the product comes back in stock, e-commerce companies can automatically trigger calls informing the customer about the product availability. Assuming there are hundreds of such customers every day, it’s an ingenious way to bring back potential buyers and increase sales.
Alongside calls, e-commerce companies can also notify users using push notifications, text messages and emails.
Customer service directly impacts customer loyalty. Hence, whether companies are active on only one or multiple channels, it’s important to ensure that they provide a delightful and seamless customer experience consistently across all channels. Since over 70% of users prefer to shop using their phone, the most popular channels are call, chat and SMS.
While chat and SMS don’t require a lot of resources to handle, calls are resource-intensive and require hiring and training of call centre agents. However, with limited bandwidth, e-commerce companies struggle in answering customer calls quickly and in providing them first call resolution. The situation worsens during events like festivals, a sale or a big product launch.
To overcome this challenge, more and more e-commerce companies are adopting Voice AI built using advanced Artificial Intelligence (AI) algorithms that can not only understand the context and intent but also hold natural human-like conversations. By leveraging the technology, e-commerce companies can handle the majority of the outbound calls especially the ones that are mundane without the need for a human agent. AI voice bots can answer questions like a human and resolve common queries (for example, order status enquiry). When required the AI voice bots can also easily transfer calls to agents with context.
This allows e-commerce companies to handle mundane calls and surges (during festival season or a sale) while freeing up agent bandwidth. Since the resolution is instant, AI voice bots drastically reduce call waiting times and increase first call resolution.
While often undervalued, collecting customer feedback is a very effective way of increasing customer retention. This is because it’s impossible to retain a customer without knowing what they expect from a product or service.
Hence, irrespective of the company size or the number of customers, e-commerce companies should proactively collect customer feedback and analyze it to improve product experience and service.
Most companies are leveraging emails, text messages, agent calls and push notifications to collect feedback. While these methods are effective to an extent, the number of responses received using these methods are very poor. We’ve all been guilty of ignoring emails and text messages sent to us for feedback. To fix this, e-commerce companies can leverage Voice AI.
AI Voice bots that are powered using Voice AI can intelligently trigger calls at certain milestones (eg. when the product is delivered) to collect feedback from customers in a personalized manner. It can even reschedule calls in case the customer doesn’t pick or when they request for a callback. Collecting feedback at the right time not only makes the customer feel valued but also yields a higher conversion rate compared to other channels.
Irrespective of the channel you’re utilizing, remember to ask customers for additional context with the rating. In order to improve CX, it’s important to understand in depth their challenges and reasons for both poor and good experiences.
While a few retention strategies might take additional resources and effort to implement, they’ll go a long way in increasing customer lifetime value and ultimately revenue. For faster implementation and in-depth analytics, companies need to leverage the latest technologies (like Voice AI, ML) and tools.
Lastly, to get the maximum out of the above strategies, e-commerce companies need to focus their efforts on the right set of users (that create maximum value for them in the long run).
Skit is an Augmented Voice Intelligence Platform, helping businesses modernize their contact centers and customer experience by automating and improving voice communications at scale. By enabling preemptive, intelligent problem solving and seamless live interactions, we have automated over 15 million calls for global enterprises across industries. We help our customers streamline their contact center operations, reduce costs, and also enhance customer experience and engagement.
Connect with us if you’re interested in learning more about the platform and how it can streamline your contact center strategy.
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