Welcome to the e-commerce marketing podcast. Everyone I am your host Arlen Robinson. And today we have a very special guest Dawn, who is the Founder of Digital Dawn and is an MBA graduate, with more than 17 years experience working at the management level for a Fortune 25 company. She is now making waves in the digital marketing world as a Strategy and Business Growth Consultant.
Dawn and her team work with 6 and 7 figure business owners who want to grow, expand, and explode their businesses! Digital Dawn provides business strategies, automation, and systems to ensure your business turns from chaos into cash flow.
Welcome to the podcast on Arlen for having me appreciate it. Yes, no problem. And then thank you for joining me. Yeah. We’re today. We’re super excited to talk to you about our topic of today, which is going to be about customer retention and customer retention strategies specifically for e-commerce businesses, because it definitely is a hot topic today in the digital world. You know, a lot of focus of course, is always on driving sales, driving traffic into a business, but a lot of times retaining existing customers and increasing their, their value is almost kind of like a second thought. So super excited to dig deep into customer retention strategies, but, you know, before we get into all of that, why don’t you tell us a little bit more about your background and specifically how you got into what you’re doing today?
Sure. Well, I worked for one of the major retailers for more than 17 years. And as you mentioned, I was a corporate executive for them. And so my whole background has really been in the retail and e-commerce space specifically. And in 2014 I decided I was working really hard for somebody else and I wanted to start working really hard for myself. And so I took the entrepreneurial leap and started my own agency in 2014. And we’ve been helping business owners now for close to seven years in advertising and working on strategies and growth and going into markets and all sorts of different things. So it’s been a wild ride, definitely over the last seven years working with e-com businesses. For sure.
That’s awesome. Awesome. Yeah, definitely understand. We are dealing with e-commerce businesses day in, day out. It has definitely been a wild ride. This has been a lot going on a lot of changes everybody’s of course had to pivot a bit due to this global pandemic, for course. And so yeah, everybody is just, you know, it’s keeping everybody on the, on their toes.
Exactly, exactly. And it’s one of those things, you know, this last year, so many of our e-comm businesses have had to really shift strategies and tactics. And I think this is such a great topic to talk about with, you know, retention strategies, because now there’s so many e-commerce businesses coming into the market to this last year because so many people have been either laid off or had to shift or, you know, brick and mortar businesses now are shifting to getting online. So the e-comm space is getting kind of noisy in some markets as well. And so customer retention is such a huge thing for so many businesses and something we don’t talk about a lot, like you said, it’s not the shiny penny sort of thing, right. We’re driving through.
That is very true. And so since of course the customer attention is a topic for today. What I want to do is really kind of start off with kind of you defining it. And actually I can think of a common question that a lot of business owners have, and they may not know the difference is really what’s the difference between what is customer attention, first of all, and what is the difference between, you know, a customer retention strategy versus a customer win-back strategy? Cause you hear that often trying to win back customers. What is the difference? If you can kind of break it down for us?
Well, I think about a customer retention strategy as you’ve acquired a customer and just that you’re keeping them with repeat purchases, right? They’re coming back to you more and more, or coming back to you in a repeatable sort of way. Versus when I think about a win-back strategy, it’s more of you haven’t purchased anything from me for a while, or I haven’t heard from you or you haven’t done anything with us over the last several months and now I’m needing to win back your trust or win back your business through different efforts versus maybe a customer retention strategy or a customer retention process might be more of doing more of the same, I guess, versus a win back is in my mind more where I’ve lost you and now I’ve got to convince you to come back. Right. So, yeah. And I think when, you know, when you think about customer retention strategies specifically, or you think about, it’s really not overly complicated to have a customer retention strategy, but it can be so profitable for you if you do it well, right. And building that, building that loyalty with your customer base and how you do it, there’s really simple methods of how you can win customers or get customers to be loyal to you without having to go to the extremes. So I don’t know if you want to get into all of that right now, but
If he can definitely break it down because that’s really the big question, like you said, with a retention strategy, you’re trying to get those existing customers to purchase more again. Or if you’re, let’s say a service-based business, you’re trying to keep them a customer. You want to keep them paying, whether there’s a monthly fee, annual fee, whatever it is you want them to stay. And so what are some, some basic ways to do that?
I think particularly when you think about e-commerce one of the biggest sort of customer retention programs is around loyalty, right? And a loyalty based program or a subscription-based program. And a lot of times when you think about how e-commerce is set up, we don’t always think about it in a way from a loyalty perspective and a loyalty program can look different for a variety of different industries specifically for e-commerce. When you think about a, let’s say a dietary supplement business or something along those lines, it kind of makes sense, right? To have a subscription base, like every month you get my product sent to you. And if you go on this loyalty program or the subscription-based program, you get maybe a 5% discount or 10% discount. If you go on auto renew, same thing with like a makeup or cosmetics brand. That’s also a very common strategy is to have a reoccurring subscription or a loyalty based program where it gets a little tricky is if you’re not in an industry where that makes sense.
So for example, if you’re selling art or something that doesn’t naturally have a subscription kind of service-based to it, how can you think about those loyalty programs? And a lot of times, you know, we help our customers think about unique ways that are specific to their business. So about referral based, you know, you refer somebody to us and we give you a discount on your next purchase. Or if you stay by one, we’ll give you the next purchase a 10% off or some sort of discounted, you know, loyalty type rate or something like that. So I think there’s a lot of different ways that you can think about loyalty programs depending on your specific industry. But there’s also a lot of new stuff coming out, like text message marketing, right? And bringing customers back to you or keeping them engaged with you through text messaging, making sure that they understand, Hey, we’ve got a discount, Hey, we’ve got, you know, a sale going on or something like that. A lot of times now we know that text messaging is bringing back customers, loyal customers to you with a really high percentage open rate. So I would say, you know, text messaging is one of those things now that everybody’s used to getting them and seeing them. And that’s a great way to bring a customer, a loyal customer back to purchase.
Gotcha. Gotcha. Great tips for sure. Because you know, like you said, it’s a lot easier really, once you have these existing customers, it’s a lot easier to the cost of actually that you’re going to have to put in to retain them is always a lot less than what it is to acquire them. That’s always usually the case.
Absolutely. And I think a lot of times people don’t necessarily recognize that, that it’s, you know, a repeat purchase is a lot more profitable than having to go get somebody else again, you know, and you’ve already purchased them. And that profitability rate is, is really there because you’ve already spent the time in building that the know like, and trust factor they’ve already purchased from you once now, you just need to serve them again. And it is a lot more profitable even though there may be some expenses to the retention strategies or there may be some expenses to being able to, you know, run some of these programs in the grand scheme of things. It’s a lot cheaper to retain versus having to go get again.
Yeah, yeah, definitely. Now, if we’re looking specifically at e-commerce businesses and when we’re thinking about retention, I’ll give an example. Let’s say we’re dealing with a company that sells consumerable products. Maybe they are. I deal with a lot of companies that are in the fashion space or excuse me, in the fashion space, the skincare space, that’s a huge space right now where they’re, you know, companies that are doing really a, a, you know, a ton of sales consistently. And so let’s say we’re dealing with a business like that. And usually what skin care is specific to the type of person. Usually with these skincare brands, they have these really unique niche products and they have certain products that usually is what kind of pulls people into their ecosystem. And so let’s say somebody gets pulled into one of these skincare brands from a specific product that may maybe the particular product, just as an example, helps to moisturize your skin. And that’s what they attracted them. Maybe they saw some ads, they said, okay, that’s what I want. They get in there. They purchase that. But you know, that was really all that they wanted. They weren’t really thinking about anything else. What is the process of, once you get these customers in there, they’re in there, they purchase what they wanted, how do you win them over with and expose them to your other products without being too aggressive and to try to force other things down their throats. What’s the methods for doing that?
Yeah. You know, I think that’s a great, particularly in the skincare industry or in beauty in general, a lot of times, you know, you do come for one specific thing, like you said, and I’ve seen a successful strategies work, particularly on checkout where you’re getting ready to check out. And before you do say, Hey, our customers have also purchased this alongside of the moisturizer, or if your skin is dry, you might want to try this or, you know, have you thought and helping them sort of understand what other offers you have that would compliment what they’re purchasing. And I think you can do it really simply with, you know, just simple automation at the end of the checkout process. That’s not overly aggressive. I mean, I hate going to a store checking out and I’m getting order after order or offer after offer after offer.
And I’m like, I just want to check out. Right. So making it so that it is a compliment to whatever it is that they’re purchasing or giving them some education about the other products that you have available, that might compliment what they’re currently purchasing. Things like customers have per oftentimes purchased this, in addition to that moisturizer, or we found that these two products work best together and giving them, you know, without having to think too much, giving them sort of that integration right in front of them, right. As they’re ready to make that purchase is a really simple, easy way to get an additional order or increase your average order value in a way that doesn’t feel in your face. But it’s also helping me like, oh, I didn’t know you sold bad, or I didn’t recognize that that was something that would compliment, you know, my moisturizer or whatever it is. So I’ve seen that work really well.
Yeah, it makes sense. And I think these days with most e-commerce shopping cart solutions, a lot of businesses that are using the, you know, the hosted platform, which is a Shopify, the Wix is of, of the world, big commerce, all of that Squarespace. I think all of those platforms, you know, have some form of functionality in them that will allow you to do that. If they don’t, they do have, you know, integrations or separate apps that you can add them to your store. That’s the biggest thing these days, where if they don’t have that as a core functionality, you can get an app. And I’ve seen that there’s several apps with most of those shopping cart platforms that will allow the upsell, the post checkout upsell, you know, and giving those options. So he has a lot, a lot of ways to do it, for sure.
Yeah. I’ve also seen, you know, strategies around sharing reviews of other products as well, that help customers make those decisions. So to your point, there’s apps on those platforms that you can use a lot of times to help that. And then there’s also apps that help share like, Hey, nine out of 10 customers have purchased this in addition to, and they’ve loved it or sharing a video of why this product works so well with the other product. And, you know, just even those little simple apps that you can add in, just make a huge difference in your rate. Shopify has funny and all the other platforms and they’re relatively inexpensive. And I liked them because they’re customizable in a lot of cases so that you can pick what goes nicely together and you can really formulate a nice, you know, upsell for the products that they’re particularly looking at.
Yeah. Yeah, definitely. That’s definitely good to know. Now, as far as these strategies are concerned, whether it’s the loyalty, the customer loyalty, whether it’s the upsell, educating your customers about, you know, similar complimentary products, which you can definitely do. You not only at checkout, which you can even do that through an email campaign after purchase. So that’s another common thing then it can be done once you’re doing all of these things. What are some ways to measure the success really of these different strategies? I know, of course, other than seeing the average order value of a particular customer, what are some other things that we can do to measure the success of these?
Yeah. I think that, you know, a lot of times we talk about repeat purchase probability or the probability of someone actually coming back and, you know, it’s a really easy calculation, actually. It’s the number of customers that have purchased over the last year and how many times have they come back? You know, it, it’s a it’s divided by and, and it’s the number of times, you know, that they have purchased again and again. And I think, you know, on a lot of different platforms, like you were mentioning Shopify or Wix, or, you know, any of them have the ability for you to be able to measure that very easily as well, which I absolutely love Shopify in particular has a return rate percentage that you can actually look at daily. You can look at it by the year and you can actually see trends of repeat customers and how many people have actually returned to your store.
And I think you want to try to think of that, you know, in a way that depending on, you know, although repeat customers maybe only make up a smaller percentage of your total, they potentially make up a much larger percentage of your annual revenue because they are loyal and they’re more likely to continue to purchase from you. So making sure that you’ve got some sort of tracking mechanism or some way within your platform, that you can measure it. And if you can, again, it’s just kind of simple math, right? The number of customers that purchased times 365 days divided by the total number of customers. So you can mathematically figure it out yourself very easily, but again, there’s a lot of customer platforms that already do it for you.
Gotcha. Gotcha. That’s good to know. And I wasn’t aware of that, that return rate percentage, you know, with Shopify and I know the other platforms have something similar that does make it super easy to see where you stand and then, you know, what you can do to try to improve that. So that is absolutely.
Yeah. Yeah. And I think that, you know, when you think about the repeat customer rate to, you know, those repeat customers, oftentimes like you said, have a higher average order value as well because they are coming back and so really nurturing them so that you don’t have to go do a win back strategy, which we know is more expensive. And a lot of times, not nearly as successful, making sure that you’re really driving home, that particular piece is important.
Gotcha. Gotcha. Now, with customer retention, if there are any clear do’s and don’ts, what would they be? Is there some things that you should definitely do and versus those that you shouldn’t do?
Yeah. You know, I think that when we think about a customer retention strategy building that know like, and trust factor and building that loyalty is so important and that can be done through the user experience online, but it also can be done with your after sale marketing. And I think a lot of times where I see, you know, e-com businesses kind of drop off is they don’t do an after purchase campaign, an email campaign or a follow-up sequence or education on the product. And a lot of times, you know, you think, well, it’s an e-commerce, what am I saying? What am I talking about? What else do you know, they purchased my product. What else am I going to share? But it’s a perfect opportunity for you to, you know, share more about your company to help understand why you started it, what’s unique about your product, how it came to market.
I mean, it’s a lot of what, you know, nurturing and, and explaining your particular product or your company to your customers after the fact. And I think that’s probably one of the biggest things that I see e-comm businesses. Miss is this really amazing opportunity to build that loyalty after the purchase is already over. So that’s one of the things I would say is probably a definite do you know, a definite don’t is to take it to the extreme and then bombard them, right? Text messaging and emailing and constant, constant, constant all the time discounting or different things like that. I think sometimes, you know, we’ve got so much coming at us in so many different ways that people will have a tendency to get a little bit annoyed in certain cases, by too much, but having the right balance between, you know, taking advantage of the opportunity after purchase doing too much, I, there’s probably a sweet spot there, but definitely take advantage of it.
Gotcha. Gotcha. That’s great. Well, that’s good to know. I’m definitely have the experience where I’ve been bombarded by certain brands or purchase from where it’s just like, wow. You know, they flood your inbox with just all types of offers and, you know, as a business owner and me being an e-commerce space, you know, you know, they, they mean, well, they’re just trying to increase their sales. I mean, so, I mean, I don’t blame them, but yeah, like you said, there is a fine line because people, these days they get annoyed because I think brands, these days, they can be a little bit aggressive with the outreach tactics. And so
Nobody, nobody wants to know that your moisturizer is on sale four times a day. Right? No, nobody needs, nobody needs that. But I think there is that level of personalization and understanding about your brand and understanding about your company that does help build that loyalty and that retention piece, you know, I’m, I’m much more apt to buy something when I know the history of it, or I know why it was created, or I know the formula of it, or I know why it was, or the backstory behind it, you kind of just get, you know, integrated and you, you feel like, oh, I, you know, I love this brand because of they do X, Y, and Z in addition to the product itself. So yeah, there’s a fine line between annoyance and education or teaching your customers about you.
Yeah, definitely. Well done. As we get ready to wrap things up, I wanted to just kind of pick your brain a little bit and see if there’s a, you know, at least one company that has been, that you’re familiar with that has been successful with their customer retention strategy. And what specifically did they do?
Well, I think the biggest one that I think of that we all think of a lot of times is Starbucks, right? Starbucks has one of the best retention, loyalty strategies out there. I mean, how many times have you purchased Starbucks, maybe even this week. Right? And, and you just keep going back for more and more and more, and you’re like, why am I spending $7 on a coffee? You know, when you think about it, but it’s because they have built such a brand and such a loyal base around it, and they’ve done such amazing things, but really it comes back to, they sell a high quality product. They make it really easy for you to get it and they offer discounts and promotions. And so if you kind of keep it simple like that, they have a high quality product, they make it easy for you to get and they offer you discounts and promotions and take that and apply it to your business pretty easy. Right. It seems, it seems so simple. Right. But that’s one of the companies that I think of when I think about really strong loyalty or brand retention, if you are a Starbucks fan, you are a Starbucks fan. You will not go to another, you know, you won’t go to a caribou or a dumb brothers or another, you know, you’re stuck on Starbucks and that’s what you purchase over and over again. And it’s because of that loyalty because of the product quality and because they’re everywhere, right. It’s easy to get.
Yeah. Very true. Very true. That’s a great example. And I see that all the time. I’m not a coffee drinker myself, but there’s a Starbucks near where I live and it amazes me. I think it was one Saturday afternoon, you know, I’m here in Florida and it’s hot. And I know of course they have cold drinks, but I mean the line for their drive down the block, I couldn’t believe it. And it’s always like that.
It’s always like 20
Minutes. Exactly. So they definitely have their customer retention strategies down pat. So, yeah. Great example. And that’s something that, you know, all of us, any e-commerce business can actually study. You know, we look at what they’re doing, you know, go in there, sign up for their mailing list, try to get the offers into you, you know, just observe, observe, you know, every point of contact that they have with their customer. And I think you can learn a lot from what they’re doing for sure.
Yeah. I think that’s a great, great point Ireland is that, you know, a lot of times when you’re not really sure what to do, go to the people that are doing it the best. And like you said, get on their mailing list. Or even if it’s not something as big as Starbucks, if you’ve got a competitor in your space, that’s doing something really well. You should always be on their mailing lists. You should always be seeing what they’re doing and following them and watching them and, you know, maybe taking things from them as you can, but, or ideas from them as you can. But, you know, you should always be aware of what your competition is doing as well as what you know, other major companies are doing.
Definitely, definitely. So yeah, I definitely think that’s a great thing to do cause there’s a lot of money and research that goes on with some of these brands, for the decisions that they make. So you can
Learn a lot. Absolutely.
Well, Don, it’s been awesome talking to you. I have definitely learned a lot and I’m, I hope our listeners have as well customer retention does, we know, as we’ve discussed is really a big thing and it’s something that can definitely help increase your sales because you’re looking internally to the customers that you already have as opposed to, you know, focusing on bringing in new customers. So great, great topic for today. But what I always like to do is we get ready to close things out and switch gears just so our audience members can get to know you just a little bit better. You don’t mind sharing one closing fun fact about yourself that you think we’d all be interested to know about.
Well, before I got into the world of retail and e-commerce, I actually was a professional chef. And so I have a deep desire, passion for food. And I love being in food. I love to cook. I’m a total foodie. So this last year has been really hard. Like not being able to go out and do stuff or whatever, but we spend a lot of time at home. My husband was actually a chef too, and we love to cook and host and do all sorts of fun things. So
That’s awesome. That is great professional chef. Yeah. Thank you for sharing that. Yeah. I’d love to have dinner at your guys’ place. Both of you guys. I could imagine the dishes that you guys come up with. So that’s, that’s awesome. And thank you for sharing that. We really appreciate that. Lastly, before we let you go, if any of our listeners want to reach out to you, pick your brain any more about customer retention or really about anything, digital marketing concerns was the best way for them to reach you.
They can just go to our [email protected] and we’ve got a contact page there where you can book a call. We can talk strategy. We also have some free resources available for Shopify specifically, and some other, you know, conversion rate optimization, tips and tricks. So digital Don agency.com.
Okay, great. Well thank you for sharing that. I definitely encourage all of our listeners to check you guys out there. Digital Dawn agency.com. I’m always a fan of getting access to free resources so I can encourage anybody to check you out there. And if they want to take it a step level, I see that you can book a call with somebody on your team to, to see how you can help them better. So thank you for offering that and yes. Thank you again for joining us today.
Thank you so much. It was really fun talking with you. I appreciate it very much. That’s great.
Likewise, it’s been awesome.
Thank you for listening to the e-commerce marketing podcast.
Founder of Digital Dawn