We all know the world has gone a bit crazy these last few years. In the UK, we have had Brexit, then the pandemic and now the war in Ukraine. Each of these has played a part in global trends which have ultimately resulted in a cost of living increase for most of us in the UK. Increased shipping costs worldwide, difficulties with supply and demand have increased prices again worldwide, most notably the cost of oil. This is causing businesses to put up prices. This also drives demand for higher salaries and results in inflation.
This means that consumers will have less disposable income and will become more risk averse. Most ecommerce businesses in particular will see drops in performance. This means that there has never been a better time than now to understand the value of Conversion Rate Optimisation (CRO), particularly with a focus on customer retention rather than just acquisition. It is said that it costs five times as much to attract a new customer as retain an existing one. This old stat rings true in some situations but not all as is discussed here and depends fully on your customer lifetime value (CLV). To understand how to focus your efforts on getting the blend right of focussing on customer acquisition, retention or both, it is vital to be able to accurately measure your CLV. Many businesses sell products that are one-off purchases. But even in those cases, businesses can diversify to try to increase the lifetime value of their customers. The great thing about CRO is that by improving the customer experience for existing customers, you also improve it for new new users.
If you are looking at increasing the lifetime value of your customers and therefore customer retention and growth, then an overlooked area of website UX is personalisation. Personalisation is about providing a unique experience to each user based on what we know about them. This is how remarketing works. Effective personalisation then relies on good data which as we know with the demise of third party cookies gets harder and harder. A good round up of both website personalisation tools and platforms can be found here and here. One area which can see probably the biggest uplift in conversion rates is email marketing and this is all about customer retention.
Having been in digital marketing for 20+ years, I fully expected email marketing to die off, but particularly with the cookieless future demanding we develop our own first party cookie data, in fact it is still pivotal to business success and growing. In fact Hubspot state here (along with a lot of other great statistics on email marketing) that email generates $42 for every 1$ spent……which is pretty impressive. It is vital therefore to have proper customer segmentation in place and there are many good systems for this. One that seems to be growing rapidly and one I love is Klaviyo. It has a fantastic Shopify integration which has fuelled its growth, but it works fine without Shopify and has a great user interface as well as marketing automation and personalisation tools.
Whatever you decide to do, having the most accurate date on which to base your decisions is fundamental. With that in mind here is a useful infographic curated from good sources on how different businesses focus on that blend and getting it right.
Infographic by- Invesp
