Churn and Customer Retention
When it comes to any retailer or sales-based business, customer “churn” is an important area of consideration. Churn refers to the rate at which customers do not return to a given service or subscription, and the goal of any company looking for a solid growth rate is to have its number of new customers exceed its churn rate.
At ReverseLogix, we can help in this area. Our reverse logistics software can help you identify touch points within your returns management services and emphasize repeat customers, which are a huge part of decreasing churn and improving your overall growth rate. Let’s look at some of the basic numbers on churn and repeat customers, plus examine how most retailers aren’t doing enough in this important area.
Many retailers simply don’t realize the damage that can be done by products that don’t meet customer expectations. Per a report from the Adobe Digital Index, repeat customers make up 40 percent of an average retailer’s total revenue, driving anywhere from three to seven times the revenue per visit that you’ll find from a one-time customer. Consider this: This same report says that overall revenue will rise by roughly 10 full percentage points for every one percent of first-time shoppers who come back for a second purchase.
Most Retailers Don’t Do Enough
For this reason, it’s absolutely vital to have great products that convince customers to come back. Why, then, do so many retailers collect so little data in this area?
When it comes to returns management, many retailers do basically nothing to find out why things are coming back. They simply assume that no return means the customer was happy, while a return means the customer was unhappy. Basically, they’re guessing.
With an RMA management application, however, this guesswork is gone. Analytics allow you to discover the root cause of a product return, then make changes to help you ensure this doesn’t happen in the future.
Early Is Better
It’s best to start this process as early as possible. The sooner you have information on customer preferences, the sooner you can adjust your responses and stay on top of market conditions. This allows you to make better merchandizing decisions and reduce time-related overhead.
For more on reducing churn through repeat customers, or to learn about any of our reverse logistics services, speak to the pros at ReverseLogix today.