This is a guest post by Monica Eaton-Cardone, the co-founder and COO of Chargebacks911.

We’re gradually working our way to a post-Covid sense of normalcy. However, it’s important to acknowledge that some trends we’ve observed over the last two years may represent broader, permanent changes in the marketplace.

There’s been a seismic shift toward eCommerce and click-and-collect as preferred buying channels. It’s true that some of this momentum was just the result of the temporary shutdowns last year. Still, many consumers are finding that they enjoy the convenience, and are likely to stick with remote channels.

One report found that consumers are interested in virtual experiences heading into this holiday season. 45 percent of respondents said they’d like to interact with a virtual showroom as part of the shopping experience. Other methods of augmenting the consumer experience found similar interest:

• Viewing products in augmented/virtual reality: 44 percent
• Shopping while watching a livestream: 34 percent
• Video consultations with “personal shoppers”: 29 percent

Marketers Seeing More Value in Retention

In the long-term, I don’t believe that Covid-19 “changed” consumer buying preferences in a meaningful way. It merely accelerated trends that were already underway. And, in response to changing consumer preferences, we’re seeing marketers rethink how they apportion shares of their budget.

Customer acquisition is absolutely essential to a healthy business. I don’t mean to challenge that idea. However, I believe that marketers have historically tended to overemphasize the importance of attracting new buyers, as compared to retaining existing ones.

According to the CommerceNext 2020 Benchmark report, roughly 4 out of 10 marketers said they planned to allocate more of their budget to retention marketing in 2021 than ever before. This was, on some level, a move necessitated by Covid-19. However, it’s also reflective of a consistent pattern.

The report illustrates that retention has represented a growing share of marketing spend every year. Like many practices impacted by Covid-19, it’s part of a preexisting trend. Covid merely accelerated a process that was already underway, with marketers choosing to shift more of their spend away from acquisition, and toward retention.

The Pool of New Buyers is Shrinking

Rapid—and often chaotic—change has marked the digital marketplace since its inception. However, I believe that 2020 presented a tipping point in terms of saturation.

The pool of consumers that are new to eCommerce is shrinking. The digital market grows increasingly stable year over year. Now, marketers are coming to understand that shifting the balance of their spend toward retention marketing is a necessary path forward. For skilled marketers who can leverage their assets and resources effectively, this will produce a stable stream of buyers who come back time and time again.

Acquiring new buyers is expensive. An old rule of thumb suggests that attracting a new customer will cost five times more than retaining an existing customer.

At the same time, repeat customers tend to spend more following an initial purchase. Data suggests that increasing your customer retention rate by as little as 5 percent could increase your overall profits anywhere from 25 percent to a remarkable 95 percent.

We’re Creatures of Habit

You have a lot of obstacles you need to overcome to try and attract new buyers. Each prospect has their own wants and preferences. You have to address all these concerns, while also tackling and countering the customer’s potential objections. On top of that, you must also provide a smooth experience that can guide the buyer to the end of the sales cycle.

Even if you do everything right…there’s still no guarantee the prospect will complete a purchase.

As humans, we naturally tend to like the familiar, and be more resistant toward anything new and unfamiliar. Our status as creatures of habit is a barrier for acquisition marketing. It can actually be a major asset, though, as it pertains to retention.

It’s a lot easier to convince a previous buyer to come back than it is to acquirer a new buyer. Past customers who’ve made the leap and had a good experience with their first purchase will already know and trust you. So, there are fewer potential objections that could come up.

Like we discussed before, the digital marketplace is maturing. As we achieve greater saturation, it’s going to be more and more difficult to peel buyers away from other outlets and win them over. That raises the question: how do you go about cultivating a better approach to retention marketing?

Retention Depends on the Customer Experience

The first step is to understand what sets retention marketing apart from acquisition.

Although it’s ultimately easier and more cost-effective to retain buyers than try to win new ones, retention marketing is still a complex matter. With acquisition, you have a simple goal of overcoming objections and winning buyers. Retention, however, relies much more on maintaining a personalized experience with individuals.

The customer experience is not monolithic. Instead, it’s composed of numerous tiny touchpoints. Each one of these will positively or negatively impact CX and help determine if a buyer makes a successive purchase.

It’s a risky calculation; it takes 12 positive experiences, on average, to offset just one negative experience. At the same time, four out of five buyers say that they’ve abandoned a purchase because of a bad experience. Even worse, it’s easier than ever for cardholders to abuse processes and take out their frustration on merchants.

Every facet of your operations plays a part in retention. You have to consider fulfillment, customer service best practices, and shipping and return policies. You also need to think about messaging, and whether you’re communicating effectively with customers. You have to ask:

• Is your tone appropriate for buyers at their present state?
• Are you effective at building genuine relationships with buyers and a positive impression of your brand?
• Are you offering the kind of post-transaction support that buyers expect?

You have to keep these—and other concerns—in mind while developing a strategy for retention marketing.

Benefits to the Market as a Whole

The pivot from acquisition to retention may not be easy considering everything that retention marketing entails. Still, it’s ultimately a positive step for the eCommerce market.

Creating a more equitable balance between retention and acquisition marketing suggests that the digital space is maturing into a more stable environment. This will make it easier in the mid- to long-term to develop more comprehensive strategies for marketing.

Innovation and disruption have been the dominant themes in eCommerce since its inception. However, there’s something to be said for a mature, stable ecosystem. This new digital space can allow marketers to put less emphasis on trying to capture explosive momentum, and focus instead cultivating a body of loyal buyers for consistent, reliable growth.

This is a guest post by Monica Eaton-Cardone, the co-founder and COO of Chargebacks911.

About Monica

Monica Eaton-Cardone is an entrepreneur and business leader in the technology, eCommerce, risk relativity, and fintech fields. She’s launched numerous successful companies, earning a reputation for developing effective, innovative business solutions in the process. In 2011, she co-founded Chargebacks911, developing the world’s first end-to-end chargeback management solution for merchants. She later launched Fi911, a new subsidiary providing solutions for financial institutions, in 2019. She currently serves as the COO of both companies. Monica is also a valued subject matter expert, whose insights have been featured in outlets including Forbes, The Wall Street Journal, The New York Times, and more.

Thanks to qimono on Pixabay for the image.