By Emily Black, Content Executive and Analyst at IMRG
In the first half of 2022, it’s become more apparent than ever that the customer is at the centre of the online shopping experience, as the cost of living crisis is causing shoppers to become more selective with where they’re spending their money. Acquiring customers is usually more expensive than retaining them, so once they’re through the door, it’s vital to ensure brand loyalty and interest.
In February 2022, IMRG conducted a study of 38 retailers, in order to find out what results they were seeing when it came to the best ways to acquire customers, and keep them interested (for the full and detailed analysis of these results, check out our report). We found out the best methods for seeing a higher average basket volume, conversion rate, and acquisition of traffic and customer to the site. Here are our 3 ways to increase your acquisition and retention:
1. Marketing channels
When asking retailers which marketing channels produced a higher conversion rate (those customers who land on a site, then proceed to convert to checkout) and average basket value (the average spend of the shoppers on the site) we found some interesting results. Affiliate channels came in at number one for creating an average conversion rate of 8% among our retailers (based on a last click model—aka, where they clicked from, which bought them to the site). This could include clicking from discount codes or influencer advertisements. In second place was organic (3%), and email and direct almost in a tie (3%). Display and social saw the worst performance for conversion, however, this could be due to the last-click attribution model, as social is important for attracting customers to the brand, but may not lead them directly to the site. To find out which channels produced the best ABV results, check out the full analysis here.
2. Discounting
We went on to look at which strategies are most effective at enticing customers, and maintaining loyalty. When we collated the answers from our 38 retailers, there was one consistent theme which kept appearing: money off! Customers are most engaged with schemes which give them a monetary incentive, such as gift vouchers or money off vouchers. Examples of this include the Tesco Clubcard, which offers users money off their grocery shop, and coupons, in exchange for their data, and information about shopping habits. Whilst this is a great incentive for retention, it may also link back to why affiliate programmes came out on top for conversion, as affiliates can often be a discount link, or money off incentive which leads a customer to a site.
- Gift voucher after x purchases
- A ‘welcome 10% off’ offer
- Money off in the form of reward vouchers
- We reward with ‘points’ which can be exchanged for £ off. Double / Triple point incentives
- Money off vouchers
- Money off – 10% off their two favourite brands
- Target offers / discounts
- Money off programs
3. Loyalty schemes
Finally, we took a look at loyalty schemes, to see how they can help keep customers around. We grouped our retailers into three categories. Group A had a loyalty scheme, group B had no loyalty scheme. We can see from the table below, that the conversion rate (CVR) of group A grew by +1.3-4.4% points from 2020, to 2021, whilst Group B was only 0.0-1.1%. The average conversion rate was also 2.7% higher for group A than group B, showing that those with a loyalty scheme saw more traffic convert to purchases.
We can conclude from these results that affiliate marketing produces the best average conversion rates; discounting is an effective technique for customer retention; and loyalty schemes can produce a higher CVR. Knowing these techniques, we then went and spoke to some industry experts, in order to establish what else you can do to retain and obtain customers.
Gabriel Hughes, CEO of Metageni, said, ‘In the new ‘cookieless’ world, where third party tracking is greatly restricted, it is now more crucial than ever to establish trust and meaningful relationships with your customers. Stronger customer relationships mean you can build an acquisition and retention strategy based on your first party customer data, rather than relying on external and often biased sources. To step up the game, use predictive analytics and ‘next-best action’ models to understand which marketing tactics will increase the CLV and retention. Bespoke models built on your first party data can be used to predict the likelihood of conversion on a case by case basis and provide meaningful recommendations for the right touchpoint (e.g. offer or a newsletter) which will increase acquisition and retention rate.”
Joelle Hillman, Client Partner Retail & Travel at Awin, said that, “Discount partners are an obvious incentive for attracting new customers; Uniqodo shared 57% of shoppers are motivated to complete a first-time purchase with a code. Discount partners also can turn on strategic offers and incentives to build loyalty, including repeat purchase codes. Another obvious strategy to incentivise retention is working with loyalty publishers (clues in the name) these partner types offer points, including air miles or call minutes, providing huge CLTV gains. But it’s not just incentives partners supporting brands customer strategies; influencers offer a level of authenticity and offer credibility for your brand on your behalf, Oracle found over a third of consumers trust influencers over brands, providing potential new customers with confidence to convert.”
Emjay Lofts, Head of UKI Marketing at, Esendex observed, “The average consumer’s expectations are higher than ever before. If consumer brands don’t focus on retention, they may risk losing existing customers faster than they can acquire new ones. This means that it’s important to invest in the tools required to deliver relevant messaging across preferred customer communication channels. Based on that experience, if a customer feels that they can trust your brand, they are far more likely to engage with the products you offer them. When a customer has had a positive brand experience, it’s never been easier for them to share your brand with their network, with these organic referrals generating new customers at a significantly lower cost than through paid-for channels.”
Heath Barlow, Regional Vice President & MD for EMEA North at Emarsys, suggested, “Emarsys found there are three key ways to acquire and retain your customer base. The first is knowing your shoppers and personalising content. 43% of customers stay loyal because of excellent customer service – so brands have to meet customers where they want to be met, with true 1:1 communication. Second, is incentive – 45% stay loyal due to regular rewards, so it’s essential to keep them engaged between purchases. Finally, content from brands must remain up-to-date and varied, to eradicate the threat of competitors and keep 59% of customers loyal.”
Luke Jonas, CCO, Nest Commerce suggested, “As a result of rising media costs and the power of Meta’s algorithm, creative has become the most important driver of performance within paid social acquisition. Advertisers that win in paid social in 2022 will be those who implement a social-first iterative strategy to deliver a compound effect on their performance. What does this mean in practice?
1) Improved click-through rates due to consistently testing creative
2) The Meta auction prefers good creative, which leads to reduced platform costs. These factors together have the compounding effect of reducing cost-per-click significantly, and therefore increasing the opportunities for customer acquisition.”
Damien Landesmann, VP Sales & Partnerships at Lengow, said, “The figures speak for themselves–growing at double the rate of overall e-commerce, marketplaces are used by 57% of online shoppers in the UK on a regular basis. Amazon logs almost a billion monthly visitors, followed by eBay with 367 million visitors and Zalando with 127 million visitors.
Marketplaces are tools that should not be neglected in your acquisition strategy…
These platforms deliver the best experience for buying products and services. Offering convenience, consumers know that they can find what they need on marketplaces.
When faced with rising acquisition costs, brands and retailers should add marketplaces to their arsenal. Marketplaces are an efficient sales channel because they increase visibility and generate traffic thanks to their reputation. A great showcase for your brand image, these trusted platforms reassure shoppers and reduce the barrier to purchase for lesser or unknown brands. Shoppers are significantly less likely to buy directly from your brand’s website, especially if it is a consumer’s first time coming across the brand.”
Barley Laing, the UK Managing Director at Melissa, argues that, “With so much similarity in the quality and price of products on offer online retailers need to be delivering a consistent positive customer experience to both retain and attract new customers.
“A key driver at the heart of powering a consistent and standout customer experience worldwide to maximise your CRM and acquisition efforts is having access to accurate customer contact data at a global level. If customer data is clean, contemporary and verified it ensures communications are efficiently delivered to provide a good customer experience. This avoids the dreaded and expensive mis-deliveries. Secondly, clean data can be effectively analysed to gain valuable customer insight that retailers can use to keep existing customers happy, with personalised communications, so they return and spend more in the long term.
Michelle Schroeder, CMO, Ometria, said, “Customer expectations around their shopping experience have only risen since the pandemic catapulted the growth of ecommerce. Where once effective personalisation across digital channels was a nice to have, it is now a hygiene factor for retailers wishing to retain customers. Customers expect retailers to know them and communicate in a way that reflects that – requiring ever more complex and technical retailer capabilities. We have seen clients boost CRM revenues by 83% using behavioural segmentation, dynamic content and product recommendations to ensure contextually-relevant experiences. Marketing channels are how retailers communicate with customers today – it’s crucial they make those interactions count.”
Henrik Fabrin, CEO & Co-founder of Certainly, suggested, “Zero-party data is becoming more vital for ecommerce businesses, due to the death of third-party cookies and the growing need for personalized shopping experiences. Or, to put it another way, instead of trying to divine customer needs and wants from third-party data, you can just ask them! By using automation solutions like chatbots, ecommerce companies can collect thousands of zero-party data points about their customers, such as style preferences and email addresses. This qualitative data can be collected at all parts of the buying journey and used to improve the experience for users, increase brand loyalty, and boost customer acquisition.”
Thomas Kasemir, Chief Product Officer at Productsup, said that, “Acquiring and retaining customers all comes down to how well retailers can meet consumers where they’re shopping. We’re seeing higher foot traffic to physical storefronts, but there are still plenty of people who prefer ecommerce. This means retailers need to provide a solid shopping experience both online and offline. Additionally, providing personalized experiences or offering competitive pricing can help retailers differentiate themselves from their competitors. Productsup recently conducted a survey and found that exclusive deals both online (55%) and in-store (54%) are the top factors persuading purchases.”
Published 15/06/2022
