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Become A Startup Insider With Inc42 Plus
Join our exclusive community of business leaders &makers for in-depth tech stories and intelligence on India’s tech economy you won’t find elsewhere.
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Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.
Inc42 and Freshworks recently held a panel discussion titled Scaling Up Smart: D2C Founders’ Playbook To Customer Engagement & Retention, exploring critical areas such as:
- Measuring retention and identifying the responsible team within a D2C startup
- Tracking the success metrics/KPIs for retention measurement
- How much of the retention activities are rule-based
- Tracking the key changes in retention in the past two years
Moderated by Daman Soni, chief business officer at GlobalBees, the panel included Harshit Vij, cofounder of FREECULTR, Mohit Yadav, cofounder of Minimalist, and Janani Dwarakanath, senior director, product marketing, at Freshworks.
D2C Founders’ Playbook To Customer Engagement & Retention
According to an Inc42 report, ecommerce in India is set to reach $400 Bn by 2030. With the country now home to 23 ecommerce unicorns and counting, D2C startups in the Indian ecommerce space are increasingly looking to leverage marketing automation tools for customer engagement and retention as they play a significant role in building a profitable business.
However, customer retention cannot be considered in isolation. Without brand and product awareness and optimum customer experience, not even the best retention tools can help retain a customer.
So, what does it take to make sure that a shopper will come back again and again and become a loyal customer?
One of the first and most common ways that a customer interacts with a D2C ecommerce brand is on their platforms – be it a website or an app. Hence D2C businesses invest a lot of time, effort and money into optimising such platforms.
According to Yadav of Minimalist, “Ecommerce startups must ensure that their products stand out and offer consistent pricing across all platforms before thinking of retention. Above all, they need to provide a seamless customer experience regarding delivery timelines, order returns and other fulfilment areas.”
He added “If customer experience on your platform is not seamless, you may lose them to a marketplace. So, channel retention becomes more important than customer retention.”
What Key Factors Must Startups Focus On For Successful Customer Retention?
Net Revenue Retention (NRR) and a Customer’s Lifetime Value (CLTV) should be the KPIs to track, said Dwarakanath of Freshworks. But instead of the complicated tech stacks used by many founders, startups should go for a single, seamless marketing automation solution.
“At Freshworks, our marketing solutions use AI and ML in such a way that the system self-registers consumer patterns across different channels and helps startups decide on the communication and channel to be used for retention,” said Dwarakanath.
Personalised communication would be another critical factor when businesses look at retaining Indian customers, said Vij of FREECULTR. To facilitate this, FREECULTR is looking to centralise user data so that retention solutions can be API-driven instead of manual intervention.
But there is a hitch. Although personalised communications would keep customers engaged, startups must be careful not to bombard them with messages as overcommunication could kill, added Yadav.
Besides, with the rapid rise of ecommerce startups, this space is getting too crowded, and people are looking for competitive pricing – mainly coupons and discounts – leading to high customer acquisition costs (CAC). Therefore, startups must get the customer engagement part right as soon as prospects are on their platforms. It not only helps with retention but also with upselling and an increase in LTV.
With various engagement and retention tools available in the market, D2C businesses must select the one that best fits their needs and drive ROIs as they look to scale up. Whether the ‘funding winter’ is here to stay for a long time or indicates a routine, cyclical downside, D2C brands are now unanimous about one thing – the money spent on retention is far more valuable than the money spent on acquisition.
Tune into this panel discussion to get insights into best customer retention practices for sustainable growth.
