In a world where acquiring a new customer can cost five to ten times more than retaining an existing one, customer retention is everything. How, then, can ecommerce brands build loyalty, increase customer lifetime value (LTV), and keep their existing customers coming back?
Recently, we got the chance to unpack this question on our Hit Subscribe podcast with OLIPOP, a popular direct-to-consumer brand offering sodas made with plant fiber and prebiotics. We spoke with Eli Weiss, Director of Customer Experience, and Steven Vigilante, Growth Marketing Manager, to learn how the brand recently hit their 6,000-subscriber mark in under a year while also focusing on customer retention.
“At OLIPOP, we try to let customers lead the way,” says Eli. “Customer experience for us is very intertwined with retention.” Now, let’s talk specifics and dive into some of OLIPOP’s strategies for driving customer loyalty and delivering a top customer experience.
Best-in-class customer retention strategies
To retain customers, focus on the customer experience
“Brands always have a vision for what their customers should be doing and how they should be doing it,” says Eli. This, however, can be a huge missed opportunity for customer satisfaction if you’re not incorporating customer feedback into that vision. After all, how are you supposed to meet your customers where they are if you’re not listening to what they want?
From the get-go, Steven and Eli made the customer experience a focal point of OLIPOP’s subscriptions. Before launching their recurring options, they sat down and chatted about what they’d personally like their own “dream subscription” to look like—putting themselves in the customers’ shoes and making sure their offerings were as flexible and easy to navigate as possible.
Of course, as a business, key metrics like monthly recurring revenue (MRR) are paramount as well. But top brands balance this by prioritizing value for the customer, as well. Beyond the discount the customer gets from a subscribe-and-save product or service, how can you drive additional value, increase brand trust, and develop closer customer relationships? These are crucial questions that any business should keep top-of-mind to both surpass customer expectations and attract customers.
When you consistently empower customers, collect customer feedback, and act on it, you pave the way for building a brand community. By keeping the lines of communication open, you can increase customer engagement and make customers feel heard and seen by your brand. This in turn benefits your customer acquisition: Your most loyal customers become your brand promoters, attracting new customers to your products or services.
Retaining customers depends on your products’ accessibility
A major part of meeting your customers where they are is making your products or services accessible. For many brands, this means thinking strategically about pricing to help ensure that it’s feasible for customers to make recurring purchases with you over a long period of time rather than just a one-off transaction.
OLIPOP decided to be more accessible with their pricing, and therefore their ingredients, from day one. Though wellness was one part of their brand identity, they wanted to make sure customers could afford to incorporate their products into their daily routines as much as they wanted—whether once a week or once a day. Because of this, the brand made the decision not to be an organic product, because sourcing organic ingredients would drive up cost for customers significantly.
“We made that conscious decision from day one because we wanted to meet people where they are,” says Steven. “We know that many people are drinking soda for cost reasons, and the only way you’re going to get them out of that is if you have something that’s closer in comparison from a cost perspective.”
They also thought about accessibility from a taste perspective: “A customer’s not going to pay four times the price for something that tastes 10% as good,” says Steven. “We almost really feel like we’re competing more so with sparkling water and diet soda than anything else…. [people] are wanting a healthier alternative [to soda] that also tastes good. And that’s truly where we come in.”
Any brand can apply this mindset to their retention strategy. Be sure to consider what other products and services your customers are currently purchasing, what they love about those products or services, and what factors would be a barrier to their purchase. It can also be helpful to examine different customer segments to see if these factors vary across your customer base. Then, make sure to gather feedback and study customer behavior throughout the process to assess if you’re effectively meeting customers’ needs and desires.
Provide flexible subscription options to increase customer retention
Another powerful business strategy to increase your customer retention rate and reduce customer churn is to make your subscriptions as flexible as possible.
“In order to keep people long term, flexibility is the first thing to insert after you’ve removed friction.”–Eli Weiss, Director of Customer Experience at OLIPOP
For OLIPOP, that means making it as easy as possible for customers to adjust their orders, whether it’s skipping a delivery or swapping products. “We’re always pushing people to swap flavors,” says Eli, “because our dream is for someone to find [what] we call the “forever flavor” in the first 30 or 60 days.”
Any brand can emulate this by investing not only in their product swapping capabilities, but also in their cross-selling and upselling capabilities. Provide your customers with personalized add-on product recommendations based on their original purchases, or include options for them to upgrade their orders to a more premium version. These strategies can not only be highly effective at improving customer satisfaction, but also for increasing average order value (AOV) and LTV.
Another way your brand can improve the customer experience through flexibility is to make it easy for your subscribers to cancel, then come back. This might sound counterintuitive at first when it comes to improving customer retention rates—but it can prove to be a highly effective strategy for long-term success.
“There’s a thousand reasons why people can cancel,” says Eli. “Just continuously meeting them with grace and understanding is generally a long-term win.” Some customers will inevitably cancel their subscriptions—but if you make it easy for them both to leave, you increase the likelihood that they’ll return to your business. It also further increases trust in your brand and can encourage previous customers to recommend your brand to a friend.
“There is no one customer journey. Some customers, their journey ends when they cancel and other customers will cancel and come back nine times in the customer lifetime.”–Eli Weiss, Director of Customer Experience at OLIPOP
Meeting customers where they are with transactional SMS
Customer engagement is another crucial area for enabling flexibility. Brands should make sure that they’re enabling communication with their customers on the right platforms—and one crucial one is SMS.
“We wanted to use [transactional SMS] to engage on a human level with our customer.”–Steven Vigilante, Growth Marketing Manager at OLIPOP
Transactional SMS is a powerful strategy that allows your customers to manage their own subscriptions straight from their mobile device, without having to log on to the customer portal. It can help increase AOV and LTV, reduce churn, and increase customer satisfaction by helping your subscriptions seamlessly fit into your customers’ lives.
OLIPOP uses RechargeSMS to make the entire experience better for their customers. Through SMS, they release new products, enable skips and swaps, and gain valuable feedback from their customers. The results are speaking for themselves: After a recent new flavor launch on SMS, the brand found that 50% of their read texts converted—a monumental conversion rate.
Curious about whether or not transactional SMS is a fit for your brand, or wondering how to get started? Check out our Ultimate Guide to Transactional SMS.
Improve customer retention by centering the customer experience
So, how did OLIPOP go from zero to almost 6,000 subscribers in less than a year?
“I wouldn’t say that was any magic to it,” says Steven, “other than a very good product, frictionless process, and a great CX team—treat CX as a marketing channel, not as always playing defense.” The brand also has a subscription landing page that clearly outlines the value of their subscriptions, as well as their flexibility.
The common thread here? Be clear, be intentional, and think empathetically from the customer’s point of view. When you create a subscription experience that centers them and their needs, you lay the groundwork for a trusting and lasting customer relationship.
Check out the full interview with Eli and Steven, as well as conversations with other industry experts, on our Hit Subscribe podcast.