We are all familiar with the 3 Rs from elementary school: reading, 'riting and 'rithmetic. Similarly, there are three essential Rs that marketers—especially those working in e-commerce—should have a firm grip on: retention, retargeting, and re-engagement.
Just as reading is the keystone for education, customer retention is vital to success, and businesses that are good at keeping customers have the power to maximize lifetime customer value (LTV) and grow revenue—in some cases by more than 25%.
The other two Rs, retargeting and re-engagement, are tools marketers can use to boost retention rates and keep customers on board.
In the case of most consumers, the main point of engagement in today's digital marketplace is the online shopping cart. It's where customers finalize purchases, but it also serves as a basis for marketers to build profiles that allow them to develop long-term customer relationships.
The problem is that a large majority of online shoppers abandon the shopping cart, by some estimates at a rate of over 70%, which leads to trillions of dollars in lost sales.
But here is the stat that really counts: Over 60% of those lost shoppers could be won back.
Retargeting and re-engagement enabled by technology solutions, such as marketing automation, data management platforms, and content personalization, can make a big difference.
Imagine someone visits your website, clicks on several items (e.g. ,a few pairs of running shoes), adds one pair to the shopping cart, but then leaves without checking out or even entering an email address. How can you find her and unlock that potential revenue?
To better understand and serve your site visitors (and drive sales), websites commonly use a system of tags—snippets of code that report information about visitor actions and send it to an analytics platform.
Each time visitors click a link or view a new page, the tags register that information, and in some cases a cookie is set to find the visitors elsewhere on the Web after they leave your site. The ability to deploy and manage these tags is not easy, and using a tag management system can help.
You can use tags and cookies for a variety of purposes, but in this case they are extremely useful for retargeting a lost source of revenue (i.e., visitors who didn't convert).
Going back to our example, we understand that thanks to the tags added to your site's code, a cookie tracking the user is now stored in your data management platform (DMP) and identifies the visitor as being a part of an audience that is interested in running shoes.
Later, when that visitor goes to another website with available ad space, the ad exchange where that space will be sold creates a user ID (e.g., a third-party cookie) to let potential publishers know who is visiting that site. By syncing these cookies, it is possible to identify that user (who is no longer viewing your page) as the visitor who recently abandoned the shopping cart.
Armed with this knowledge, you can target users with a personalized ad based on their previous activity and prevent them from becoming another source of lost revenue.
When customers land on your e-commerce site and later leave the shopping cart without completing their purchase, the first step to recover them is to re-engage.
And since there is theoretically a 60% chance of being successful, it is well worth the effort! But here is the catch: Your message must be engaging.
There are two main ways to re-engage customers: display ads or by email. In both cases, the goal is to use the items left in the cart to win the customer back.
For both remarketing display ads and re-engagement email campaigns to be effective, you must personalize the content. In the case of email, this means, at a minimum...
- Visitor's name
- List and pictures of items left in the shopping cart
- One-time offer based on items viewed
- Suggested items for cross-selling
- Offer to connect them with Customer Service in case of questions or concerns
Email re-engagement campaigns have been shown to be effective with 10% opens and order values up to 15% higher than normal, according to Unbounce. An email sent within 60 minutes of cart abandonment along with two more follow-up emails can generate an ROI of more than $8.
You can also personalize remarketing display ad campaigns (though to a lesser degree than email) by including the items from the abandoned shopping cart in the ad.
Tech for Re-Engagement
For remarketing and re-engagement campaigns, marketers have various tools available to them:
- SalesMango is a relatively new solution on the market, but one that incorporates retention scoring and dynamic content serving based on engagement ratings.
- Marketo, one of the leaders in marketing automation, also offers integration with Magento and other popular e-commerce services.
- HubSpot has also added a solution called Groove that connects HubSpot customers with the Shopify platform.
Of course, to take advantage of such tools requires that you already possess a visitor's email address from a form or account signup. This is why some e-commerce sites ask visitors for their email address up-front, even before the visitors begin to browse or shop.
But what if visitors enter an email address, but then don't complete their registration? You can use a re-engagement platform that enables you to capture and save an address as soon as a customer enters it into a form field.
Other Tools to Boost Retention
There are other areas of customer retention where technology plays an important role. Customer satisfaction makes a huge difference in keeping customers connected to your brand.
Improving customer experience—from search and browsing to item selection and, most important, the checkout process—is vital. If at any point the customer is dissatisfied, he or she may abandon the purchase.
What can technology do to help? A couple of things:
- Real-time assistance can be key to holding on to a customer who is about to leave his or her shopping cart. To combat this, more and more sites employ real-time chat systems, such as Zopim and Intercom.
Now, with better tools to master the 3 Rs, e-commerce marketers can focus squarely on winning over and keeping loyal customers.