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Ensuring Customer Retention in Online Trade

March 17, 2008


The time has been changing and small business owners are getting proactive instead of just sitting and waiting for customers. But managing customer relationships can be difficult and time-consuming.

Five valuable principles that are worth being applied in order to increase customer retention in on-line retail are described by Dr. Gabby Wiegran and Hardy Koth from Communication, Media and Technology Practice in their article.

Value-added information

According to them offering the value-added information that the customer wants to have before making a purchase can ensure that the customer comes back to the website. For example, if the customer's wish is to prepare a special dinner for guests, initially he will look for a recipe and afterward for the necessary ingredients. So if you offer recipes that the customer likes, the chances increase that he will also buy the ingredients from that website.


The authors are convinced that personalizing product or service offerings to a customer's individual needs is another effective method for increasing customer retention. The retailer can tailor the product offering to individual needs only when he gathers information for customers’ preferences. For instance, if you understand that your client is vegetarian you can offer him only that kind of food. Don’t forget to let the customer know that your site is personalized.

Intelligent communication

The intelligent communication is quite different from advertising, the authors claimed. Once the retailer has obtained information about a customer he should communicate intelligently with that person by meeting the client’s expectations. If you don’t want your site to lose credibility, you should send emails that at least 15 out of 20 messages might be of interest to the customer because they actually address his needs. If you do so, the consumer will probably look forward to the next message. Therefore, the authors concluded, intelligent communication should be rooted in information about the customer's needs, interests and preferences.

User-generated content

Two forms of user-generated content can serve to build a community: customer feedback or on-line communication directly between users.

Why should the retailer take advantage of the unique opportunity to make individual customer comments accessible to all customers? On one hand, the consumer is wondering about the quality of the products or if they are actually as good as promised. That can be stopped when he sees a lot of comments from other customers displayed. He feels better knowing that others frequently buy on this site. On the other hand, most of the people who have taken the time to comment will come back to the site just to see if their comments are actually displayed and accessible.

The authors advised that if you are able to create community, for your competitors will be extremely difficult to draw customers away from the site.

User-generated content can also benefit the retailer giving him a chance to improve his products and services based on this invaluable consumer feedback.

The authors’ conclusion is that the user-generated content is one of the most powerful tools for increased customer retention.

Loyalty incentives

The authors explained a loyalty program as a way of influencing and changing a customer's buying behavior. Retailers can reward customers for activities that are highly desirable and lead to enhanced profitability, increased revenues, greater numbers of purchases or more new customers referred.


Following these really very useful pieces of advice, the online retailers can establish significant customer retention record.

So what you need to do as a small company is a creative strategy for building strong relations with your customers that will guarantee their loyalty.


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