Stop Losing Customers: 10 E-commerce Churn Strategies (It's NOT About Discounts)

One of the most painful moments is when you realize how many customers you've lost. And that's a thing that we can prevent. So here's how to prevent customer churn In E Commerce and retail, the prevention initiatives are addressing these two types of the not to lose customers and the about to dump you ones. The not to lose are good customers that are at the risk zone, while the about to dump you are average customers that are at the risk zones. The difference between them is only the monetary value. Some companies that don't have enough customers prefer to blend them together. Recency is medium, frequency is low to high and monetary is high for the not to lose customers and low to medium 2 for the about to dump you customers. Let's understand something. At day zero we need to do acquisition initiatives, right? To have customers coming to buy from us. Then the onboarding phase is when the customers are considering to buy again or not. And after that, when the buying habit is already there, we need to make sure that the customers are developed so customers are being prevented from churning. In this example, that's happening after day 2728, right? When we see that the buying habit starts to go down. The best way to prevent customers from churning is that you make sure that they are happy, right? If you don't have a response from them, you make sure that you follow up. Looking here if the answer is yes. So if the customers are happy, the whole idea is to continue to invest in marketing and scale the business. If the customers are not happy, you need to investigate and fix what's broken. There are three things that could be broken. What you sell, which is the product, what you do which is the customer experience and what you say which is the marketing. In order to find those things, you have various moments throughout the customer journey. You have the pre delivery NPS once the customers are placing the order and if the score is low. The whole idea is to trigger alerts to customer success team for high value customers. And if the score is, let's say good enough, it's more than seven. You don't have to do anything. But here what you are fixing is the visitor behavior, right? So you are focusing on what's going on on the website. Going further with the post delivery nps, you collect the data via email, SMS and phone calls. If you don't have enough responses, you try to find, follow up and to add recipients to ad campaigns so that you can get more data. Yeah, the highest the response rate, the better if the score is very low. So it's below 6 for these high value customers, the idea is to trigger the alert to the customer success team and to solve this issue as soon as possible. Now, if you have neutrals, the idea is to find what's going on and to improve the NPS by building a list with the top three things that you should improve together with the other departments. If the customers are happy, of course, you just facilitate them to recommend you. Now, what's going on with the low NPS score? So for instance we have this mediocre NPS which is 51. The idea is to look at the detractors and to understand what are the anomalies by the location, by the brand, by the products that you are selling, the services that you've delivered. The role. Maybe there are some anomalies, some roles or employees are the ones that are harming your NPS or by the RFM segment. So the idea is to drill down into the data like you've seen into the research part of the CVO Academy looking at the net promoter score by the RFM group. The whole idea is to understand what made the bout to dump you customers. In this example that gave you 46 to give you this low NPS score. The whole idea is to monitor and to be aware about what are your top 5 churn reason for this example. In particular, things could be like I haven't used your product, I've got the package destroyed, it was the wrong size, the delivery time or I simply forgot about you. Those could be the reasons. But what you want to understand is what are your top churn reasons. Not only that you monitor all of those, but you also group them between them. If you have customer experience issues, how big are them and which ones are the ones that are contributing the most? At the low NPS score, if you have product issues, what are those issues? So you should also drill down into the product quality part to understand if you have some particular things that you should be fixing. As you can see here, only 20% and this is data from a real customer of ours, only 20% of the issues were around price and offer. So when you are looking at the brands which are simply bombarding their customers to come again by giving them some discount coupons or vouchers, you are looking at the bad behavior. So it's not about incentivizing customers to buy again, not about bribing them them to come back. It's about fixing the issues that you have in order to have them coming back. Now here are 10 initiatives that I strongly advise you to take into account in order to prevent churn, the first is come to internal alignment. Ideally you would have the heads of each of those departments. So you'd have the CEOs, the CXO, the CFO, retail director, E Commerce Director, the Chief Technical Officer and the Chief Digital Officer. So having the data that I've suggested and informing everyone about what's going on in your business is going going to make them aware about what needs to be fixed and you need all of them to be aligned in order to move the needle on the long run. Second, you can trigger this type of real time NPS alerts with the objection treatment. The idea is that if you are asking for feedback, you need to make sure that you act on it. So it's pissing everyone off When a company is asking for their opinion and then you suggest something which was affecting you personally as a customer and nothing happens. So if you don't hear from that company, you'll be even more pissed off than you've been in the first place. So the chances for you to come back are even lower. And that's why when you are triggering nps, you also need to set real time alerts based on the NPS scores and based on the customer value. The higher the value of the customer and the lower the nps, the more you need to invest and to focus on those type of customers because you don't want to. And that's a part of our OmniConvert reveal technology which allows brands to do exactly this. Going further, you need to craft journeys and re engage customers at the right time. To craft better customer journeys, you need to understand what are the buying and the usage and consumption cycles based on these things. Last bought products, usage pattern, consumption pattern, day since the last transaction, RFM groups and the job to be done. So knowing these type of aspects will allow you to craft relevant customer journeys. But what if you don't know this type of purchase cycles? Then you need to find them out. So you need to find the purchase cycles according to the products that you sell so that you know when to consider a customer in the danger zone. Let's understand how people are buying and using or consuming different products, right? So when we look at the coffee, people are buying it every day and they are consuming it every day. How about shoes? They use it every day, but maybe they buy it every three or six months. What about the swimming goggles? You buy them every year and you use them every week when you go to the swimming pool. So as you can see, there are different usage and consumption cycles. And in order to understand if the customers are in the danger zone, you need to understand their buying frequency and their usage frequency. For instance, you can see here the purchase frequency by industry because we have a benchmark that you can look at. You can benchmark your own company according to the products that you are selling. Next up, you trigger relevant notifications across various channels. For instance, you have these phone calls, emails, SMS remarketing ads and direct mail. So you can use this type of channels to remind the customers that you exist and that they should be using your product. The whole idea is to pace your messaging according to the usage, consumption and buying cycles. As I've said before, if what you're selling is expensive enough, you can even consider concierge follow ups so you can call the customers once they are getting into the danger zone. That's particularly important for B2B companies where the lifetime value of a customer is very high. But there are some creative ways that you can do as well. For instance, here's an example from a Belgian company that I admired because they've been very creative at doing this type of concierge follow ups for their customers. They are from Belgium and they have a lot of French speaking customers. They are selling vegan food. When you look at the Belgium, the GDP per capita was almost $60,000 but in Madagascar it was only $1600 per year. So they've hired 20 people from Madagascar and that justified following up to all of their customers which were in the danger zone so that they keep them coming and buying from them. Another initiative would be to leverage the package inserts. Those could be very, very different. For instance, if you are selling online groceries, a cold fridge magnet will be a great reminder, especially if you place your QR code there and you make it very easy for your customers to restock the items that are missing from their fridge. Another initiative could be to create a community for your customers so that way you can facilitate conversations between them to help sparkle all sorts of discussions and help them make progress with your products. At some time the customers are simply supporting one another because they are into the same journey. So your job would be to simply create the space for them to communicate. Here's an example from Avi They've built this community of 45,000 people and imagine how many topics they are addressing together. Of course the product is at the center of this type of conversation because they are into this journey of making their customers have a better life. I had a fantastic conversation with the founder of Abbvie, Ron about this topic and many others. You can find this episode and you'll be amazed about this conversation. Rod has a fantastic journey and he applied the CVO principles in his business. The last two initiatives that I will leave you with are to expand your product assortment and to eliminate the toxic products. You can do all of this by analyzing the data that you have. In the part where I talk about the four data layer product optimization framework in the CVO Academy you can find how to do this. The whole idea is to find the opportunity scores based on the product you analyze the sales score, the customer experience score, the behavior score and the demand score. By knowing all of this, you'll have all sorts of products like the true gems and the idea for them is to keep on selling and to find more true gems like they are. If you have high sales but low demand and low customer experience and behavior scores, then you have fake diamonds and the idea is to eliminate them from your offer if they are not good enough. The whole idea is to understand what type of products are you selling and what kind of questions you need answered in order to optimize your product assortment offer. For instance, you'll have all sorts of products like the needs more polish. Yeah, low customer experience and behavior scores, but high sales and high demand. You need to understand can we find alternatives because the demand is there but we don't have the right product. Then we have the shines but not for long. These are products with high sales, low demand and high customer behavior and that means you need to investigate further to understand. If the retention is low due to the seasonality then you have potential hidden gems. You have low sales but the demand is high and the customer experience and the behavior is high as well. You need to prioritize them better. So because if you know that the demand is there, you need to focus on those products. Then there are products with low sales, low demand, but high customer experience and behavior scores. Those are rare but loved products. We need to understand why are those products so recommended if the customers don't come back to buy Again, the whole idea with this framework is to understand what kind of products you should be pushing so that you have customers that are not getting into the danger zone and prevent them from churning. That's how you prevent customer churn in E commerce and retail. And if you want to go more deeper into this topic then go here, download this post, purchase flow and find out more about it.