Mind The Gap: The Pivotal Point Between Customer Acquisition And Retention

0aaaTomas Diaz flexEngage

It’s a magical moment that often goes unrecognized: that pivotal point when a person who has never shopped with your brand before makes her first purchase. Whether she heard about you from a billboard, a social media post, a magazine mention or a TV ad, your customer acquisition plan has succeeded. Cue the celebration!

Of course, the point in time when the cashier finalizes the sale and the new customer takes hold of her shopping bag also marks a handoff for retail marketers between customer acquisition and customer retention strategies. The focus shifts from acquiring the shopper to keeping the shopper coming back.

Shopper retention has changed a lot in recent years as more advanced personalization capabilities allow retailers to take action based on a deep bank of customer data. Retailers winning in the market today are the ones who best leverage shopper insights to discover what really drives consumers and their purchases.


A Quick Look At The Numbers

Retailers in 2019 use a variety of channels to acquire new customers, including social networks, email, in-store interactions, affiliate marketing and more. The vast number of channels now available make it vital for retailers to identify the most high-performing channels or risk casting too wide a net and stretching beyond their budgets. While retention tends to provide a higher ROI than acquisition, retailer budgets rarely divide out accordingly. This is in part due to the rising costs of customer acquisition. According to Retail TouchPoints’ Customer Acquisition and Retention Benchmark Report, 53% of retailers have had to increase their customer acquisition budgets over the past year.

On the other hand, customer retention spending has been sliding as a percentage of spending, with 47% of retailers reporting that they kept their customer retention budgets for 2019 the same as last year. Tactics for customer retention range from purchase discounts, in-store relationship building, loyalty programs and free shipping coupons. This stasis of investment in retention, as compared with the continued effectiveness of retention efforts, indicates the untapped ROI potential retention strategies hold.

Which Tactics Are Working For Shopper Retention In 2019?

#1: Customer Experience

It sometimes sounds like retail gurus are beating a dead horse, but the stats are clear — customer experience is king when it comes to retaining customers. Merkle’s research found that 66% of consumers care more about the experience than the price for brand decisions. Retailers that make shopping into an interesting, interactive in-store experience give customers a reason to come back and earn their long-term loyalty.

Customer experience extends beyond the store to all forms of customer communication, and seamlessness is key. Sprinklr found that customers don’t care what department they’re communicating with or whether they’re channel switching between phone, email or chat, they want brands to know who they are and what they purchased, no matter how they reach out to communicate. This makes a unified view of the customer essential for optimal customer experiences.

#2: Returns

They’re the aspect of retail that stores love to hate: returns can be a big hassle, but they are an essential element to consider in customer retention. The impact of the returns process on customer satisfaction is huge: Klarna found that 78% of shoppers will buy more in the long run if a retailer has free returns. Flexible, seamless return processes win customers over and allow them to shop with confidence, both in-store and online.

When returns are done right, they increase customer lifetime value. The same Klarna study also found that a whopping 86% of customers say the option of free returns will make them loyal and more likely to keep coming back to a brand. If your store return process is cumbersome and restrictive, streamlining it and making it more accessible and clear is a low-hanging fruit that can boost customer retention.

#3: Personalization

Data breaches and privacy concerns get a lot of buzz in the media, but the truth is, your customer wants to be known. Accenture found that 65% of consumers will purchase from a brand that knows their buying history. A centralized customer record of purchase history and preferences is the ticket to competing in the personalization space, and it’s vital that this record includes both online and in-store purchases.

When the data is complete and all in one place, retailers can achieve true personalization, sending timely offers about products and services that the individual customer wants, right when they want it. Your relationship with your new customer needs to start from day one with real-time tracking of her purchases so you can be the brand that’s there for her, the one that wins her loyalty.

Creating A Bridge From Acquisition To Retention

Today’s shoppers tend to stay loyal to retailers that provide them with seamless, personalized brand experiences across channels, whether in-store or online. Inherent in that experience is the nature and way in which customers pivot from acquisition marketing to retention marketing. The wider the time gap is between acquisition and retention, the more likely the customer is to churn.

Research by Bain & Company shows that increasing customer retention rates by 5% increases profits by 25% to 95%, making the transition from acquisition to retention a piece of the puzzle that retailers simply cannot afford to miss. So how can retailers decrease this window of loss and drive continued engagement with shoppers immediately after each sale?

Consider that once a new customer leaves your store with the product they just purchased and a standard receipt, there’s little there to drive her to return, or to inform her about special offers or complementary products that may be available online. Traditional receipts, whether flat paper or basic digital ones, do nothing to engage shoppers and drive retention. The power for connecting the dots via more optimized transactional communications is clear. According to Experian, transactional emails have 8X more opens and clicks than any other type of email and can generate 6X more revenue.

Reduce Your Losses

It is that pivotal moment when your new customer is walking out of your store with her purchase that you can better engage and retain her. Employing dynamically personalized receipts at the point of sale allows more of your acquired customers to shift seamlessly into retention mode and eliminate the gap that exists between the two points.


Tomas Diaz is Founder and CEO of flexEngage. A seasoned leader and expert on the needs of retail consumers, Diaz is responsible for strategy and growth at rapidly expanding flexEngage. With early career success at Whirlpool, selling to the nation’s largest retailers, Diaz capitalized on a huge opportunity to enable transactional communications that are highly personalized and engaging. Founded in 2011, flexEngage now boasts investment from Synchrony Financial and powers transactional messages for Michael Kors, Under Armour, GNC, Aldo Shoes, Kay Jewelers, Destination XL, Oakley and many more.

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