Retention is not just a trendy word; it’s now a fundamental strategy for driving sustainable growth. Historically, brands emphasized customer acquisition, dedicating considerable time, effort, and financial resources to attract new customers. However, the paradigm has shifted, and retention is now taking center stage as a key ingredient for growth.
Why this shift? Retaining existing customers proves significantly more cost-effective than acquiring new ones, offering a potential ROI up to tenfold higher.
In a recent webinar, Jake Disraeli, Co-Founder and CEO of Treet, sat down with Emerson Hammer from Corso, a technology solution addressing shipping issues and revenue retention, and Dylan Whitman from Inveterate, an advocate for membership experiences that drive loyalty and profitability. Their insights shed light on how brands can harness the fierce force of customer retention.
Treet discussed the meteoric rise of the resale market, experiencing a growth of over 3X from 2021 to 2022, with projections soaring to a staggering $70 billion market by 2027 (2X growth in 3 years). Brands are tapping into resale to secure repeat purchases from their existing customer base, foster post-purchase engagement, reduce their environmental footprint, allure new customers, and bolster conversion. The peer-to-peer resale model stands out as a crowd favorite, allowing customers to buy and sell among themselves, with the option for sellers to get paid out in cash or brand credit. Those opting for brand credit tend to spend 2-3 times more on the brand's primary platform, perceiving their resale activities as investments in future purchases. At Treet, a whopping 72% of sellers choose brand credit when offered the choice. What's more, brands entering the resale arena have witnessed nearly half of the shoppers on their resale platform being entirely new to the brand. Embracing resale programs allows brands to seize their resale market, integrate themselves into customer communities, and differentiate from competitors.
Corso emphasized that the post-purchase experience commences when a customer clicks the "buy now" button, and it's the brand's duty to ensure this experience aligns with expectations. The intricacies of the supply chain can introduce complexities, potentially hindering a seamless experience. Brands must set expectations and swiftly resolve issues, as customer inquiries concerning post-purchase experiences constitute a substantial portion of received queries, ranging from 40% to 75%. Corso operates as a concierge service, aiding customers with shipping issues and facilitating reorders when necessary. Eliminating pain points and delivering exceptional post-purchase experiences through appropriate technology and partnerships are pivotal for sustaining customer loyalty.
Inveterate underscored the importance of focusing on a brand's most valuable customers, as they significantly contribute to margin growth, introduce the brand to others, and shape its future. To maintain loyalty among these customers, brands must resonate with their audience, optimize the customer experience, and consistently deliver it. Membership programs emerge as a powerful strategy, as members exhibit a higher repurchase rate compared to non-members. On average, members, across all customer segments, experience a 20% increase in average order value. Membership programs offer immediacy, exclusivity, and differentiation, leading to heightened customer loyalty, increased purchase frequency, and larger order values.
Retention has transitioned from an afterthought to the new frontier of customer acquisition. By investing in your existing customer base and prioritizing their satisfaction, remarkable growth becomes attainable. Leveraging strategic approaches focusing on personalization, communication, and outstanding service can transform satisfied customers into enthusiastic brand advocates. Harness the potency of retention and witness your business flourish.
Watch the full webinar recording here.
