Table of Contents
- What is eCommerce Customer Retention?
- When Should You Focus on eCommerce Customer Retention?
- Who Should Focus Most on eCommerce Customer Retention?
- What Are The Benefits of Customer Retention?
- The 5 eCommerce Customer Retention Metrics You Need to Track
- How to Improve eCommerce Customer Retention: 6 Strategies That Work
- Great Winback Emails That Actually Bring Customers Back (+Examples)
- Customer Stickiness: 5 Little-Known Tactics to Increase Retention & Make More Sales
- Customer Loyalty and Retention | Keep Customers Coming Back
Customer Retention in Sales Funnel
What is eCommerce Customer Retention?
When we talk about retention in eCommerce, we’re referring to a collection of coordinated tactics that encourage existing customers to make repeat purchases. It’s about turning one-time shoppers into regular customers and eventually brand advocates. Customer retention is all about maximizing the value of each customer and increasing their lifetime value.
When Should You Focus on eCommerce Customer Retention?
To maximize growth, you need both an acquisition and retention strategy. However, the amount of time and budget you allocate to each strategy varies depending on where your store is in its lifecycle. When you’re a young eCommerce business, your focus should be primarily on acquiring new customers. As you grow and have a steady stream of new customers, you can start implementing retention strategies, such as setting up a retention email flow. As your business matures further, the focus should shift to a 50/50 split between acquisition and retention tactics. But when your business is fully developed, retention should become the primary goal, although acquisition should not be neglected.
Who Should Focus Most on eCommerce Customer Retention?
While every business should have a retention strategy in place, industries and stores with higher purchase frequencies stand to gain the most from focusing on retention. Stores with higher purchase frequencies benefit greatly from a robust retention strategy, as it encourages customers to make more frequent purchases. For example, coffee giant Starbucks has a high purchase frequency and a strong retention strategy that results in significant profits.
What Are The Benefits of Customer Retention?
Customer retention offers numerous benefits for eCommerce businesses. Here are some of the main advantages:
Customer Retention Maximizes Profits:
- Retaining existing customers can boost profitability by up to 95%.
- Happy customers tend to spend more and generate more revenue.
- Repeat customers have higher average order values, resulting in increased profits.
Retention Allows You to Outspend Competitors:
- By maximizing the value of each customer, you can afford to spend more on customer acquisition.
- Outspending competitors in the ad auctions gives you an advantage and allows you to win more customers.
Retention is Easier Than Acquisition:
- It is easier and more cost-effective to sell to existing customers who are already familiar with your brand.
- Existing customers are more likely to make repeat purchases, resulting in higher conversion rates.
Retention is (Cheap) Marketing in Disguise:
- Retention-focused strategies, such as loyalty programs, referral programs, and email marketing, can lower your acquisition costs through word-of-mouth marketing.
- Shoppers who are referred by a friend are more likely to make purchases and spend more.
The 5 eCommerce Customer Retention Metrics You Need to Track
To measure the effectiveness of your customer retention efforts, it’s important to track certain metrics. Here are five key metrics to monitor:
Returning Customer Rate:
- Calculates the percentage of customers who make repeat purchases from your store.
- A higher returning customer rate indicates a higher level of customer loyalty and retention.
Customer Purchase Frequency:
- Measures how often customers come back to make purchases.
- Purchase frequency provides insights into customer behavior and helps plan retention strategies.
Average, Mean & Mode Order Value:
- Average order value (AOV) indicates the average amount customers spend per order.
- Median and mode order values provide additional data on customer purchasing behavior.
- Analyzing AOV helps identify opportunities to increase customer spending and tailor retention strategies accordingly.
- Measures the profitability of the average customer over a specific time period.
- Customer value incorporates factors such as average order value, repeat customer rate, and customer acquisition cost.
Net Promoter Score:
- Measures how likely customers are to recommend your brand to others.
- Provides insights into customer satisfaction and loyalty.
- A higher net promoter score indicates a higher likelihood of customer retention and advocacy.
How to Improve eCommerce Customer Retention: 6 Strategies That Work
To improve customer retention, implement the following strategies:
Upgrade Your Thank You Page:
- Use your thank you page to make a memorable first impression.
- Collect customer feedback and data to personalize the shopping experience.
- Consider offering post-purchase offers or incentives to encourage customers to make another purchase.
Create a Loyalty Program:
- Develop a loyalty program that offers rewards, discounts, or exclusive benefits to repeat customers.
- Appeal to customers’ emotions and provide both tangible and emotional perks.
Send Retention Emails:
- Develop a strong email marketing strategy to keep customers engaged.
- Use segmentation to send relevant content to your email list.
- Include exclusive offers, personalized recommendations, and helpful resources to add value.
Build a Virtual Community:
- Create a Facebook group or online community where customers can engage with your brand.
- Encourage customers to share their experiences, ask questions, and provide support.
- Foster a sense of community and brand loyalty.
Use Customer Accounts (The Right Way):
- Allow customers to create accounts post-purchase rather than mandatory account creation before purchase.
- Make it easy for customers to manage their orders and repeat purchases.
- Use account data for personalized marketing and tailored recommendations.
Provide Outstanding Customer Support:
- Offer exceptional customer support to exceed customer expectations.
- Be responsive, helpful, and proactive in addressing customer concerns.
- Provide live chat support, a comprehensive FAQ section, and multiple contact channels.
Great Winback Emails That Actually Bring Customers Back (+Examples)
Implement winback emails to re-engage customers who haven’t made a purchase in a while. Winback emails can be highly effective in bringing customers back to make another purchase. Here are some examples of effective winback emails:
- Example 1: funnelpreneurs.com/winback-email-example-1
- Example 2: funnelpreneurs.com/winback-email-example-2
- Example 3: funnelpreneurs.com/winback-email-example-3
Customer Stickiness: 5 Little-Known Tactics to Increase Retention & Make More Sales
Increase customer stickiness with these five little-known tactics:
Make a Memorable First Impression:
- Invest in creating a positive and memorable first impression to leave a lasting impact on customers.
- Upgrade your website design, copywriting, and customer service to deliver a memorable experience.
Collect Customer Feedback and Data:
- Gather feedback from customers to gain insights into their preferences and needs.
- Collect additional data to segment customers and personalize marketing efforts.
Post Purchase Offers:
- Offer special discounts, incentives, or exclusive deals immediately after a customer makes a purchase.
- Capitalize on the moment when customers are most engaged to encourage repeat purchases.
Focus on Customer Experience:
- Provide exceptional customer service and support to enhance the overall customer experience.
- Delight customers with personalized recommendations, surprise gifts, or handwritten notes.
Foster Brand Advocacy:
- Encourage customers to become brand advocates by offering referral programs and incentives.
- Leverage the power of word-of-mouth marketing to attract new customers and increase retention.
Customer Loyalty and Retention | Keep Customers Coming Back
To keep customers coming back, focus on customer loyalty and retention. Here are three strategies to implement:
a) Make a Memorable First Impression:
- Upgrade your website design, branding, and customer service to create a positive first impression.
- Use compelling visuals, persuasive copy, and personalized greetings to leave a lasting impact.
b) Collect Customer Feedback and Data:
- Gather feedback from customers to gain insights into their preferences, needs, and pain points.
- Collect customer data and use it to create targeted marketing campaigns and personalized recommendations.
c) Post Purchase Offers:
- Offer exclusive discounts, rewards, or incentives immediately after a customer makes a purchase.
- Use the post-purchase moment to encourage repeat purchases and foster customer loyalty.
When was the last time you tried to re-engage your customers and bring them back to purchase again? If it’s been a while, then it’s time to start building a new eCommerce customer retention strategy. Customer retention is one of the most underrated growth tactics in eCommerce. It offers significant profitability boosts and delivers a higher ROI than acquiring new customers. By implementing effective retention strategies, you can maximize the value of each customer, outspend your competitors, and create a strong base of loyal customers. Start focusing on customer retention today and watch your eCommerce business thrive.