How the best retention strategies used by ecommerce giants can work for you

Did you know that once you have established yourself as a trusted ecommerce platform making more than 10 sales per day, about 60 percent of your efforts need to be directed toward customer retention?

Not only does retention cost less than acquisition, it also enhances profitability. According to Bain and Co., increasing customer retention rates by just 5 percent increases profitability by 25 to 95 percent. Additionally, according to KISSmetrics, the global average value of each lost customer is about $243. That is definitely a huge hole in the pocket.

Photo credit: Pixabay

Having competitive prices are not enough, as today’s smart customer decides to be loyal to a particular store for the shopping experience as well. For instance, a customer feels good if he receives personalised mail outlining the latest offers on shoes based on his recent search history, or if he is rewarded for staying loyal for four years. Such small reminders of how valuable the customer is to the company keeps him engaged and wanting more.

Keeping all this in mind, ecommerce giants have taken special care to ensure that their customers stick with them, and there is lots we can learn from their initiatives.

Netflix: offer personalised recommendations

Movie buffs and TV show enthusiasts are definitely familiar with Netflix, an on-demand and rent-by-mail movie and TV show provider. With its subscription-based model, people can access thousands of movies. Netflix reached $1 billion in revenue from its subscriber base of about 48 million worldwide.

Credit goes to its extensive personalisation, which delivered relevant content suggestions for each individual member worldwide. The company so holds personalised recommendations imperative that it launched a contest, Netflix Prize, which offered a million dollar cash reward to anyone who could improve Netflix’s algorithm for movie recommendations!

Yes, you guessed it. All the suggestions that you’ve been receiving till now have been tailor-made for you to your taste and preferences, movies you rated and from all you streamed and added to DVD queues.

To further refine this, Netflix introduced the feature called multiple user profiles. Here, different members of the same household had their individual profiles customised according to their usage behaviours. This means that with one Netflix account, you can have up to five user profiles. So the children can watch cartoons and animated movies while others enjoy recommendations catered to their likes and dislikes.

Netflix implements a hyper-personalisation approach through something called micro-genres like foreign TV comedies, mind-bending independent dramas, period pieces about royalty based on real life, etc. The screenshot below will give you a glimpse into some of these micro-genres.

Amazon: stand out with a loyalty program

Paytm: offer cashbacks on top of discounts