Electronics and gadgets are everywhere and are already considered necessities for many reasons.
Businesses like this do not need to find it challenging to identify which customers to target since a majority of age brackets are users for school, work, at home, and especially leisure activities.
The challenge now lies in how you, as the store owner, will retain these customers now that there are other competitive and emerging businesses with the same offers.
If you are looking for ways to attract potential loyal customers and retain existing ones, then we have the right explanation and solutions suitable for you!
In this article, we have included everything you need to help you understand the impact of customer retention on your customer lifetime value and how you can increase it.
Let’s dig into it!
Why Focus on Customer Retention and Customer Lifetime value?
Customer retention is the ability to keep your existing customers engaged with your business. On the other hand, customer lifetime value is used as an e-commerce metric to determine the total revenue you can earn from a customer during the duration of their engagement with your business.
Both are important to ensure your store’s relevance, profitability, and business longevity.
The reason why you should focus on retaining your customers and understanding customer lifetime value is that many businesses are competing and offering the same items at competitive prices. You should look at the other side of the picture to stand out.
Build strong connections with your customers and aim for their satisfaction so they will keep doing business with you. Furthermore, it is much easier and cheaper to retain these loyal customers than to seek new ones.
How Customer Retention Directly Impacts The Customer Lifetime Value Of Electronics and Gadget Store
There are various ways customer retention impacts customer lifetime value. Retaining loyal customers means more likely repeat purchases from them. You are not just improving your profitability and viability but also building trust and confidence in your business.
Moreover, since you have already established a connection and positive experience with your electronic and gadget customers, possibilities of selling high-priced items, reducing marketing costs, and increasing brand loyalty will arise.
The bottom line here is that the higher your customer retention rate, the higher your CLV as well. Do not just put all your efforts into improving and showcasing products and services; rather, focus on improving your customer relationship management and finding ways to make them stay and come back for more.
How Customer Retention is Shaped
Customer retention is mainly about the satisfaction you can give to your customers. You can shape and strengthen it with different approaches. If you provide a great customer experience, which includes the overall quality of product offerings and the friendliness and assistance of staff, then you are on the right track of shaping customer retention.
Another way is to have a good customer value focus where you also consider the value of what the customer may bring to you, such as offering fairly-priced items with a worthy quality of function.
Remember that customer retention brings so much to your business that, according to a study by Bain & Company, a 5% increase in customer retention can result in a 25% increase in profits. Considering also the cost you will save in marketing costs, that increase could come a long way.
Benefits Of Customer Retention For Electronics and Gadget Stores
Once you capture the trust of your loyal customers, they are more likely to purchase again, even the higher-priced items. Now that many people tend to upgrade and update their devices, these repeat customers will surely bring in so many sales.
Reduced marketing costs
It is more challenging to acquire new customers, but when you retain your loyal ones, you tend to reduce marketing costs because they can even do the promoting for you. Word of mouth can take you to places.
Positive reviews and referrals to family, friends, and acquaintances from loyal customers of your electronic and gadget stores can turn into actual sales.
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Stronger Brand Reputation
Your loyal customers are your brand advocates. They recommend and leave positive reviews not just in casual conversations but on other online platforms as well, which can reach many people and solidify your good reputation in the market.
In fact, customers don’t easily trust sellers of electronic devices as well as any other gadgets, so feedback from your previous customers is very important to gain reputation.
Top Causes Of Bad Retention
Inconsistent Product or Service Quality
Despite having them as loyal customers, you should not become complacent because they might switch to competitors if you do not maintain the satisfaction that you gave them from the beginning. Your efforts should be consistent in terms of offering quality products and customer service.
Lack of Customer Value
You should not only aim to sell but also to meet the expectations of the customer regarding the worth of the items they purchase. They might not purchase again if you impose higher prices on low-quality products or hidden fees.
Poor Customer Engagement
You must treat your customers equally and with respect, regardless of the amount they bring in. If they feel that you are not accommodating, you will not build a connection and develop trust. This may also lead to negative reviews and bad word of mouth.
Strategies To Increase Customer Retention for Electronics and Gadget Stores
Leverage Your Social Media
Encourage your customers to follow and visit your social media accounts and pages. This is for them to be updated on your announcements, offers, and exclusive electronic and gadget deals. Be active and responsive in your inbox to address queries and concerns in a timely manner.
Implement Loyalty Rewards Programs
Give incentives to your customers, even in the form of discounts, cashback, and freebies in your electronic and gadget ecoommerce store. This will make them feel valued and encourage them to buy more.
Elevate Your Customer Service
Other than treating them right, you may also offer repair and support services. It is inevitable that some items may encounter problems or slight defects on electronics and gadgets, so in order to address it well, offer this solution to your customer. In this way, they will feel that their problems are heard and assisted.
Partner with Influencers
This may be an additional marketing cost, but partnering with trusted and reliable influencers can help boost your sales and encourage first-time buyers to repeat their purchases.
Make it Easy to Do Business With You
Many customers pay for convenience, so make sure that you have an online presence, like a user-friendly website and online shopping platforms. Do not forget to implement multiple payment options and a smooth shipping and return process as well.
Enhance Your Product Portfolio and Offerings
Invest in enhancing your business portfolio because this will help your customers make informed decisions. If you have a wide and good variety of product offerings, they will have more choices to choose from.
Regularly Seek Customer Feedback for Continuous Improvement
Listen to what your customers have to say, either good or bad. Maintain those commendable strategies while improving or replacing those that bring inconvenience and negative effects to your brand. Leverage their feedback to further promote your store.
Build Relationship with Your Customers
It is not a bad idea to gather all your customers at events you host, such as product launches, milestone anniversaries, achievements, and meet-and-greets. This way, you will be able to meet them and create a personal connection. Do not forget to also consider inviting brand ambassadors or influencers who can encourage your customers to come.
Cultivate Personal Connections using Email Marketing
Give your customers a personal shopping experience by recommending items based on their past purchases, added-to-cart items, and recently searched products. Utilize your email list and provide them with offers that match their interests.
Top Customer Retention Tactic Examples Of Successful Electronics and Gadget Stores
Best Buy is a powerhouse electronics retailer in the US. My Best Buy is one of their loyalty programs, where customers can earn points for every dollar spent. They also have exclusive offers and discounts for their members.
Other than that, they also have a Total Tech Support Membership, which provides their customers with unlimited tech support on all the technology in their homes, no matter where they bought it.
Apple is one of the world’s largest technology companies, well-known for manufacturing iPhones, iPads, and MacBooks, among others.
To attract more subscribers and retain the existing ones, they offered Apple One subscription bundles where customers could avail of Apple services such as Apple Music, Apple TV+, Apple Arcade, iCloud+, Apple News+, and Apple Fitness, which is cheaper when you avail each service individually.
Samsung is a multinational manufacturing conglomerate in the world known for producing electronic devices.
Due to the importance and amount you have paid for your smartphones or other gadgets, protection cases and a timed warranty are not enough.
Samsung has its Care Plus support, wherein it aims to offer fast repairs and replacements and provide extra coverage for Samsung smartphones, PCs, laptops, home appliances, and the like beyond its warranty period.
Taking Your First Step
If you want to make your customers stay, do not give them a reason not to. Some businesses are busy trying to make a sale but are not prioritizing enhancing their customer retention strategies.
Remember that increasing the rate of your customer retention will lead to different opportunities and competitive advantages in the market.
Start your first step with us. At Vibetrace, we offer tools and solutions to track your customer retention and CLV and provide you with strategies that can make your electronic and gadget customers come back for more.