The Guide to Increasing Retailer Retention

While acquiring new customers is essential for any business, retaining existing customers is even more crucial for long-term success. New customer acquisition is expensive and time consuming, leaving little room for you to focus on the customers that you already have. 

And the benefits of focusing on customer retention are clear. It costs significantly more to acquire a new customer than to retain an existing one. Some studies suggest that it can be up to five times more expensive to acquire a new customer compared to keeping an existing customer. Moreover, existing customers are not only more likely to try new products but also tend to spend more when compared to new customers. They are 50% more likely to explore new offerings and spend 31% more on average. Even a modest increase in customer retention rates—just 5%—can lead to a substantial increase in profits, potentially boosting them by 25%.

As wholesale becomes an increasingly attractive sales channel for brands, the need to focus on wholesale retention strategies becomes paramount. In fact, 80% of brands anticipate an increase in their wholesale sales over the next year. This shift underscores the importance of thinking through and developing strategies and tactics to retain your existing wholesale customers.

In this guide, we will explore four simple strategies that you can implement to help you retain more of your wholesale customers - ensuring long-term success and profitability for your business.

Develop a Personal Relationship with Retailers

Unlike direct-to-consumer (DTC) business, where you may have thousands or perhaps hundreds of thousands customers, wholesale transactions are much more personal. They usually require personalized emails, phone calls or text messages back and forth with the retailer (i.e. the customer). 

These conversations and touch-points allow for more in-depth conversations with your customers. And instead of taking these conversations at face-value, use them as a way to develop a deeper relationship with them. Take a few minutes to understand their interests, family situations, and passions for example. This knowledge allows you to create meaningful touch points with them throughout the year around these areas. 

For example, say that you find out that you and your customer share a favorite sports team or television series. Use these shared interests as an excuse to “check-in” with them when say their sports team has a big game coming up. The check-in doesn’t even have to be anything related to your business with them - it can be used as a way to develop a personal relationship with you. Over time, this relationship is more likely to translate into an iron-clad partnership between you and your retailer. 

It may seem rather elementary, but building a personal connection with your retail customers can lead to increased loyalty and long-term partnerships. And it doesn’t take a lot of effort to do this - treat your retail customers the same way you would treat a co-worker or friend, with respect and interest and watch your business with them grow. 

Provide Discounts to Loyal Retailers

While you may not have a formal loyalty program for your wholesale program, recognizing and rewarding loyal retailers can significantly impact retention. We understand that when you sell through wholesale channels, you likely have small margins. And it’s important to keep in mind that your customer (i.e. the retailer) is also facing diminishing margins. Your retailer also has to take the inventory risk - meaning that they need to purchase the products from your brand and many others to stock their stores. This means that at any given time they are sitting on potentially thousands of dollars worth of inventory that hasn’t been sold, on top of having to pay rent and their basic operating costs (paying employees, business licenses, utilities, etc). 

All of this means that offering even a small discount to loyal retail customers can go a long way in gaining their loyalty. How you define loyal customers is up to you. You can define a loyal customer as one that purchases from your brand four times a year or one that purchases from you twice a year but has been a customer of yours for five years. The discount doesn’t need to be anything formal and or repeatable, but giving a “random” thank you 5% discount to a retail customer, or sending the retail buyer free product for themselves is a gesture that can go a long way in locking them in as a loyal customer. 

These small acts of generosity can enhance your relationship with retailers and foster loyalty. And with more and more brands competing for space in retail locations, this can be enough for the retailer to remain loyal to your brand vs. thinking about bringing in a competitor of yours. 

Understand Retailers' Purchasing Patterns

Retailers have a lot on their plates and may not always be on top of their reordering needs. They are likely running around doing a million things, from dealing with understaffed stores to interfacing with customers and all of the brands that they carry, it’s safe to say that a retailer is never bored. Due to the hectic nature of being in the retail field, it is likely, in fact it is very common that you may not hear from a retailer when they need a reorder because they don’t have the systems in place to know that they need a reorder. 

Take the responsibility into your hands to know when the retailer should be placing a reorder and get out ahead of them being out of stock. Develop a system or invest in a software solution (like Vanik) that will help you streamline and automate the reorder reminder process to retailers. 

Keeping track of what your retailers are ordering and when, and then translating that information into timely reach-outs, will not only help you generate more sales for your brand, but will also save the retailer time and the risk that they could be facing a stock-out of a popular selling item. This is the last thing a retailer wants to deal with. Proactively reaching out to your retail accounts when they should be placing a reorder can be a simple task and one that can help you stand-out from the rest of the brands and help you develop a more loyal following. 

Being proactive not only helps retailers but also demonstrates your commitment to their success, enhancing their loyalty to your brand.

Give Loyal Retailers a Holiday Present

The Holiday time is usually a crazy period for retailers. They have likely spent a lot of the year thinking about how to make the most of their store - the same way that brands sell through DTC channels think about Black Friday, Cyber Monday. They are often overworked, under-staffed and tired during this intense stretch of the year.

Knowing this, showing that you appreciate their business during the holiday season can strengthen your bond with retailers headed into the following year. By showing them a small gesture, something as simple as a gift to them, you are setting yourself up for success and helping to stand-out from the crowd of brands that they carry. 

So what does this look like? Say that you are a sock brand and want to show appreciation towards the retailers that you did business with during the year. Develop a special custom “Holiday” themed sock to send to them with a thank you note. Not only does this help you show your gratitude for their business during the year, it also gives the retailer a reason to remember your brand - provided that they wear the socks. Everytime they put on the socks they will think of you / your brand, which will likely lead to them being a loyal customer.  

This thoughtful gesture does not take long for you to plan and doesn’t cost a lot for you to execute, but it can leave a lasting impression on your customers. 

The Importance of focusing on wholesale retention

Focusing on wholesale retention is crucial for building a sustainable and profitable business. The above ideas are designed to get you thinking about how to begin to implement these simple strategies to develop a more loyal set of retail partners that will help set the foundation for long-term growth for your brand. 

Vanik has been specially built for brands selling to retailers to help them streamline, automate and personalize their retail retention strategies. And to learn more about how Vanik can help you streamline your retail retention strategies, set up time to talk with us.