We, who are managing our eCommerce business, know that “Selling to existing customers has a significantly higher success rate (60-70%) compared to acquiring new customers (5-20%).” That’s why eCommerce businesses focus more on building ways to retain consumers and convert visitors into repeat customers. Do you want to learn which customer retention strategies are the most successful? This article is for you, as we have listed tried and tested ways you can use to bring customers back to your site repeatedly. Let’s check them out.
Results of Customer Retention on Your Online Store
Customer retention is the practice of increasing a business’s repeat customer rate and extracting additional value from existing customers. Strategies built around this practice aim to ensure that customers make repeat purchases, are satisfied with a company’s products or services and do not leave for competitors. It is critical in determining the success of an eCommerce business. Here’s how it impacts your online store:
- Boosts Revenue and Profitability – Retained customers tend to spend more over time, increasing revenue without incurring the high costs of acquiring new clients.
- Increases Brand Loyalty – Loyal customers become brand advocates, recommending your business to others and bolstering your reputation.
- Reduces Marketing Costs – Getting new customers is expensive, but keeping current ones lowers marketing costs while ensuring consistent sales.
- Increases Customer Lifetime Value (CLV) – Long-term customers add more value to your business over time, making it more sustainable.
- Gives You a Competitive Edge – A solid customer retention strategy sets your brand apart and makes it more difficult for rivals to win over clients.
How Do You Measure Customer Retention Rate?
There is a simple formula to determine your customer retention rate, just like with most eCommerce metrics. Here is it for customer retention:
For example, if you started the period with 400 customers, had 300 customers at the end of the chosen period and added 150 new customers during that time, the formula would be as follows:
(300 – 150) / 400 x 100 = 37.5%
It is important to note that the average customer retention rate for eCommerce brands is approximately 30% – therefore the example used shows a fairly typical percentage.
5+ Proven eCommerce Customer Retention Strategies That Performed Outstandingly
The most popular eCommerce businesses build their personalized customer retention strategies to maximize results. Analyzing them, we have shortlisted the most commonly practiced ones. When coming up with ideas for ways to improve customer retention, you can use these five strategies as a starting point for sure success.
1. Provide Incentives to Return Customers
As a consumer, we love to feel valued. So, when you provide impactful incentives to your customers, the retention rate will surely go up. That is why it is considered one of the most successful customer retention strategies in eCommerce.
Incentives can be anything relevant to your business model. They can be discounts on next purchases, free goodies or swags, special coupons and so on.
If your business model is subscription-based, then you may provide discounts on the next renewals. For product-based online businesses like food, makeup or toys, you can provide small yet careful free goodies on the next purchase. You can also offer flexible payment options like buy now, pay later (BNPL), and more. Customers will benefit from these and undoubtedly feel compelled to make additional purchases.
2. Build a Customer Loyalty Program
Customer loyalty programs, also known as customer retention programs, work well because they encourage customers to make more purchases to receive worthwhile incentives. This turns into a win-win situation for you and your clients; you gain from their continued business and they receive more value each time they shop.
One way to start a loyalty program is to give customers a reward for their second purchase or when they hit a specific spending limit. Shopify analytics make it simple to identify your most devoted clients based on order volume and dollar value. Automated loyalty apps are another option; these apps reward your customers for the things they do in your store.
3. Start Referral Awards for Returning Customers
One of the most effective ways to reward loyalty and grow your customer base is to encourage current clients to recommend you to friends and family. It is considered one of the top customer retention strategies.
Customers are endorsing your quality and dependability when they recommend you to others. This trust factor is invaluable, as new customers are more likely to make a purchase based on the positive experiences shared by someone they know. So when your present users refer new customers, they will get a discount or bonus at the same time get trust in your business.
Starting a referral program is a great way to implement a dual reward system that benefits both the new customer and the referrer.
4. Create a Strong Email Strategy to Keep Customers Engaged & Returning
You must stay in contact with your customers if you want them to keep coming back to your online store. So that you can keep customers engaged, gather valuable feedback and implement the best ones. This is another top customer retention strategy.
For a starter, you can ask for customers to provide the best ratings and reviews. Later, you can provide them incentives. From time to time, ask customers for their valuable feedback that will let them feel valued and result in higher retention rates. Moreover, you can share early offers and discounts with the customer list and create a FOMO.
If you are planning to collect customer reviews seamlessly, then you can consider the TrustSync app. At present, it is trending in Shopify app store under Email Marketing category. With this one app you can collect reviews for Google, TrustPilot, Yelp and so on. There is a option to handle negative feedback as well. Give it a try for smooth collaboration.
5. Improve Your After-Sales Customer Service
Providing excellent after-sales support is crucial for online store owners looking to boost customer retention. This is one of the popular customer retention strategies that is practiced in big companies like iPhone, Harley Davidson, etc.
By offering assistance via live chat, email, social media and even WhatsApp, you can make it simple for clients to get in touch with you. Customer interactions can be streamlined with the use of Shopify apps like Gorgias or Tidio. You can also outline your return policy and make the process simple.
For your Shopify store, you can get BetterDocs to smoothen your customer service. This powerful AI knowledge base app helps you with Product FAQ page & documentation page. You can design responsive product FAQ, Docs with AI & add instant answers, direct support Live Chat, etc. to your store.
6. Gamify Your Customer Experience
Gamification can improve the customer experience by making it more enjoyable and engaging, which will promote return business and purchases. Your customer journey should include game-like features like leaderboards, levels, badges and reward points. You can boost consumer engagement and loyalty by creating an engaging and rewarding shopping experience.
Boost Loyalty & Customer Lifetime Value with Top Retention Strategies
In addition to raising customer lifetime value (CLV), well-designed customer retention strategies lower marketing expenses, foster brand loyalty and support the long-term expansion of your online store. Implement these tactics right now to establish a flawless shopping experience that attracts repeat business.
Keeping existing clients is just as crucial as gaining new ones, if not more so. You can convert one-time customers into lifelong ones by putting the proper customer retention strategies into place, such as personalized engagement, loyalty programs and first-rate post-purchase support. Ready to supercharge your customer retention efforts? Try these tactics now and you will see your Shopify business grow! 🚀Also, subscribe to us to keep getting these kinds of evaluation guidelines to help your eCommerce business thrive.
