6 Ways to Hold Onto Those New Pandemic Customers

Life-changing events or circumstances — like marriage, divorce, becoming parents, and yes, COVID-19 — have a huge impact on shopping needs and, therefore, behavior. As the coronavirus has many expanding their online shopping habits, online retailers must focus on retaining customers gained during this once-in-a-century pandemic.

To ensure these relationships last well beyond a few convenient transactions today, e-commerce providers should consider segmenting customers according to their engagement behavior, centering on a recency, frequency and monetary value model. From there, it’s easy to take a systematic, six-step approach to customer retention.

Identify profitable customers and take steps to engage

Step one is to distinguish your most profitable customers — and be prepared to embrace the 80/20 Pareto principle which acknowledges the absence of balance in the marketplace. Based on this principle, retailers can anticipate that only about 20% of customers generate the vast majority of revenue.

Using a five-point scale, assign a score noting the recency, frequency of purchase, and monetary (RFM) value to every customer. With this critical insight in hand, evaluate other engagement behavior which might make a customer particularly valuable, such as social media influence or brand advocacy. Once these operations have helped identify where to focus your resources, invest in these key customer retention activities.

1. Organize your firm to feature customer retention into its business rules and operations. Empower customer service employees to solve any shopper problem, for example, with a generous floor limit that allows seamless and expeditious support.

2. Content marketing can attract new customers and keep existing customers engaged via useful, informative, entertaining articles, and videos. Your customers will become emotionally attached to the company and develop a sense of reciprocity.

3. Automatically communicate to all customers, including sending a series of welcome emails to new customers or subscribers to your email newsletter. A welcome email series yields much more revenue than a single message and has more significant potential to retain and re-engage customers.

4. Identify, test, and evaluate automatic notifications based on customer RFM scores. For example, be strategic here, targeting customers with scores that represent frequency but perhaps lower monetary value. An automatic “win-back” email series might be the best approach, covering the bases while not wasting too many resources on an inherently loyal but low dollar value customer.

5. Be prepared to handle manual actions based on RFM scores by setting score thresholds that trigger personal action. For example, a customer with an RFM score of 2-2-5 likely deserves a particular retention focus. Their high monetary value puts them among your top shoppers and worth special handling.

6. Be proactive when unique circumstances arise and execute appropriate operations that are both planned and manual. If your company receives a negative review on Google, contact the customer directly to make the situation right.

Smart customer retention for post-pandemic success

For much of the spring of 2020, non-essential brick-and-mortar stores were closed, forcing shoppers into new buying habits. Nevertheless, retaining those customers, post-pandemic, takes effort and strategy to distinguish your role as a merchant that understands customer needs.

To build a meaningful, memorable, and personal relationship with shoppers, learn more about them, and segment them according to their value to your business. The actions of ecommerce companies during the pandemic influence customer loyalty — and only ongoing support and service will protect and raise the customer experience in what continues to be a highly competitive ecommerce landscape.

Greg Brown is VP of global marketing at Melissa.