Customer retention in 2023 – how to get it right?

As retailers’ grapple with how to engage the cost-of-living consumer, many maybe head-scratching on how best they can nurture and retain customers on value, rather than on price and discounting, to avoid a race to the bottom.

At MoEngage’s recent #Growth Summit in London, strategies for getting customer retention right was the question on everyone’s lips, so we caught up with Missguided’s former Head of CRM, Nicola Fox and ex-Heal’s Ecommerce Director, David Kohn, who were speaking as part of a panel at the event, to find out their thoughts.

Engagement should start with understanding

Understanding the customer through insight was the starting place for improved customer engagement for ex-Missguided’s Fox, who advocated for the need to leverage data to drive improved insight and storytelling in customer communications.  “We can’t chase ourselves to the bottom competing on price, rather we should focus on quality and value,” she told the audience.  She suggested that by looking at customer data, this insight can be used to create stories that help brands better resonate with their audiences and tell stories more effectively.

“By observing how customers interact with your brand, you can think about how to use those insights to make the lives of the customer easier so they choose you every time.”

Nicola Fox, ex-Missguided

Base interaction on a value exchange

Former Heal’s Ecommerce Director, David Kohn, pointed to customer centricity being a cost-base to the business, suggesting “being totally customer centric is not a profitable business model.”  Instead, he suggested that retailers and brands needed to consider what they were doing to deliver value successfully and create a value exchange in their customer engagement strategies.  This should involve analysing processes and how easy it for customers to extract value in their buying journeys and then prioritising either augmenting this – or where needed, fixing it.  This could involve reviewing website analytics and understanding where customers drop off or abandon purchases, or those areas of the site that perform strongest in terms of dwell time or conversions, for example – often it is the little things customers will find the most memorable.

Customer engagement in 2023 will get tougher 

Paralysis of choice will become one of the biggest challenges for retailers when it comes to customer retention looking ahead to 2023, as more brands clamour for harder-won custom, as shoppers’ budgets become even more squeezed.

“There will be no fundamental change to how customers shop – it will be no different, but tougher.  There will be a squeeze on the middle – but there will also be a squeeze on the ordinary.”

David Kohn, former Heal’s Ecommerce Director

Empathy was another watch word for ex-Missguided’s Fox, who suggested “people will still buy, but retailers need to cut through the noise, demonstrate real value and deliver on empathy, not always just on price.”

This was echoed by Kohn, who said that any ecommerce director who was happy to sacrifice conversions for customer engagement was brave, but he felt this was the evolution we will start to see as retailers move towards more emotionally driven KPIs, rather than traditional success metrics.

Nicola and David were speaking as part of a panel at #GROWTH Summit, an invitation only networking event for entrepreneurs, growth marketers, and product owners from consumer brands, hosted by MoEngage, the leading insight-led customer engagement platform, and sponsored by mparticle and ADJUST.

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