Loyalty in the Age of Digital Distraction
Here at Ragnarok, the #1 problem we solve for our clients is retention. So we asked our team of experts to share their insights on why customers leave and what you can do about it.
Loretta Doria
Loyalty in the Age of Digital Distraction
Find your people, keep them happy. It sounds simple, doesn’t it? If you’re here reading this article you probably already know that it ain’t.
What does good retention look like?
After number crunching stats of 10,000 retailers, the e-commerce experts at Gorgias shared some brilliant benchmarks:
Customer data shows that repeat customers account for only 21% of customers, but generate 44% of revenue and 46% of orders. Repeat customers should not be an afterthought. They’re revenue drivers. They’re your priority.
Source: Gorgias CS Growth Playbook
How to take action
“Should I launch a points program?” “Send out more surveys?” “Maybe create new products?” These are the thoughts running through many marketers’ minds as they start to think about cracking the retention code. But the path to achieving your retention dreams can start to sound like “more, more, more” before you know it.
Our advice: slow down, step back, and consider these five tips — before you do anything else!
1. Define your journey.
This may sound obvious, but we’re going to say it anyway. Having clear definitions for your user states and statuses is the first step in understanding who you’re speaking to, what’s there for them already, and what gaps may exist.
Here’s a sample high-level framework, but keep in mind that definitions should vary by product type and category. (For example, makeup will have a different buyer journey and user state definitions than a mattress!)
2. Plan for programs.
Retention is bigger than just email, people! Loyalty is driven by everything the customer experiences about your brand: what, where, when, why, and how you sell to them and service their needs.
Stop: Planning for single touchpoints.
Start: With your user journey in tow, and some data to back you up, dream up products, programs, and experiences that are distributed via dynamic multi-channel marketing.
This is how you win the loyalty game.
3. Mind the competition.
The focus required for operating a business can sometimes result in tunnel vision. Consider this your reminder to keep a (side) eye on what’s competing for your customer’s attention and wallet.
If a competitor has a better product, better price, or better service (or perhaps just better marketing of all of the above!), you can take that as your cue to do something about it.
4. Become essential!
This is easier said than done, but becoming essential is well…essential. Historically high inflation rates can create heightened pressure and expectations around each dollar spent and the experience it needs to deliver.
In fact, a survey in the fourth quarter of 2022 by consumer research firm NielsenIQ showed that 32% of shoppers surveyed said they were buying less or restricting purchases to essentials.
So how does one become essential? The first step is to understand your product’s purpose in your customers’ lives. Once you understand that, build marketing moments and experiences around the positive emotions tied to your purpose and product experience.
5. Service > Selling
A customer is four times more likely to switch to a competitor if the problem they’re having is service-based (Source: Bain and Company). Shift your organization to a service mindset (vs sell, sell, sell) and the loyalty stats will not disappoint. Enough said!
Need a little help getting your loyalty lifted for takeoff?
Loretta Doria
Senior Strategist at Ragnarok
