Customer retention has been a hot subject in eCommerce for quite a while now.
With the two years of the global pandemic and increased numbers in online shopping, learning the strategies that can help you keep your clients is key.
Therefore, in this article, we’ll review TOP 5 online customer retention strategies that you can apply to your online store. Moreover, we’ll look at some important metrics in judging your customer retention rate and making the necessary updates for further business growth.
Why is customer retention so important?
There are some KEY reasons why customer retention is so important for any Shopify store owner:
- It increases ROI (Return on Investment).
- It boosts loyalty.
- It brings new customers through word-of-mouth advertising.
- It saves marketing costs.
- Return clients are more profitable.
Altogether, focusing on customer retention is something every Shopify store owner that is serious about their eCommerce business should do.
In fact, even a 5% increase in your customer retention can increase your business revenue by between 25% and 95%.
5 eCommerce customer retention strategies
Now that we’ve understood the importance of customer retention, let’s look at some of the tangible steps you can take today to keep your clients returning to your online store.
#1 Build trust with your customers
The first and foremost step in ensuring customer retention is building trust.
Some of the steps you can take to build a trustworthy relationship with your customers:
- Keep your customers informed.
Are there any delays that could occur with your client’s order? Will your website is not going to be working for some hours due to technical issues?
Let your customers know about that.
Providing timely information will add up to building trust with your customers and encourage them to come back to you as someone who they can rely on.
One of the best ways to stay in touch with your customers is using Firepush – an all-in-one marketing automation platform for Shopify stores. With it, you’ll be able to drive more sales to your Shopify store with integrated SMS, email, and push notification campaigns.
- Make the Support Team available 24/7.
As an online business, you will deal with clients coming from different countries and time zones.
Therefore it is key to ensure that they can count on your Customer Support team any time they need to.
If, in the beginning, you are a one-person business, you’ll have to make some sacrifices and be willing to send a reply to your customer in the middle of the night.
- Ask and acknowledge customer feedback.
Customer reviews are vital in improving your products, user experience on the website, and overall feeling of their service when visiting your Shopify store.
Therefore, constantly ask for customer feedback, and make sure to plan any updates accordingly.
#2 Give extra incentives to customers that come back
Customers tend to get back to the merchants that care about them coming back.
One of the surest ways to do that is by providing some extra incentives.
Here are some of the incentives you could try implementing:
- Discount code. Whenever a customer purchases your product, make sure you include a 10-20% discount for their following order. You can do that in many different ways – printing a card and adding it to the product’s package or sending an email with a discount code in it.
- Offering free shipping. Offering to cover your customer’s shipping costs is something they are going to appreciate. Therefore, make sure you create a code that will provide free shipping to the clients who purchase your products more than once.
#3 Implement a segmented loyalty program
Another powerful customer retention strategy is creating a segmented loyalty program.
We highly recommend opting for a 3-tier loyal program to motivate your customers to spend more and move to the next tier.
For instance, take Sephora and their Beauty Insider program.
As you can see, the brand offers its customers a segmented loyalty program where the Insiders (1st tier) can join for free and get a 10 % discount on seasonal savings events and free shipping if they spend at least $50.
To get the 2nd tier, customers have to spend at least $350 to enjoy the VIB benefits, including a higher (15%) discount and free shipping for spending at least $35.
The 3rd tier is for those who are willing to spend $1000 on Sephora’s products. These customers get a generous 20%, free shipping, and some extra rewards by doing so.
Implementing a similar loyalty program in your Shopify store is a sure way to maximize customer retention.
#4 Ensure the best customer experience
Customers love coming back to online stores that are intuitive, easy to use, and overall user-friendly.
To ensure a great customer experience you have to care of the following:
- make sure your Shopify store is both desktop and mobile-friendly. With a huge increase in mobile shopping, online merchants have no choice but to focus their attention on the sleek mobile version of their store;
- use additional apps that can help to ensure a smooth shopping experience. For instance, we recommend taking a look at Dsers – the Best AliExpress Dropshipping Tool For E-Commerce;
- opt for a clean and clear design for your online store to help your customers find the products and information they need as quickly as possible;
- choose the appropriate images and fonts that would attract your customer’s attention in no time;
- fix any SEO issues – that includes image alt texts, metadata, JSON-LD, broken links, and so on;
- include the Customer Reviews section at the bottom of your page to build more transparency and trust with your clients;
- use CTAs and pop-ups, but don’t overdo with them to the point they get so annoying that your customers decide to leave the store.
#5 Be personal and active with your customers
Lastly, to increase the chances of higher customer retention, focus on your brand’s communication with the client.
By that, we mean being more proactive when it comes to reaching out to your customers.
Some of the tangible steps you could take include:
- Customer onboarding. Depending on your industry, there are many ways to ensure an excellent onboarding experience for your client. The least you could do is send an instruction or inspiration email to your customer to offer some ideas on how they can use the product they just purchased from you.
- Take advantage of social media. Make sure you are active on social media platforms like Instagram, Facebook, or TikTok. That includes resharing the posts of your products that your customers uploaded, using brand hashtags, creating reels, and so on.
- Send your customers emails that would inform them about special offers and discounts. Again, don’t get too spammy, and only send an email when you have something worthy to offer to increase the likelihood of your customers coming back to your Shopify store.
Customer retention metrics that matter
After learning some handy strategies for customer retention, let’s now review the most important customer retention metrics you should pay attention to.
- Customer Retention Rate (CRR) refers to the rate customers stay with a business in a given period.
- Revenue Churn Rate tracks how much of your revenue you retain each month.
- Customer Growth Rate is the speed at which you gain new customers over defined periods.
- Customer Lifetime Value (CLV) is the total worth to a business of a customer over the whole period of their relationship.
How is customer retention measured?
Customer retention is measured by looking at the metrics mentioned above and interpreting their results.
Let’s look at the Customer Retention Rate (CRR) – the key metric that will give you valuable insights on where to move next with your customer retention goals.
You calculate eCommerce retention rate using this formula: [(E-N)/S] x 100 = CRR.
- S stands for the number of existing customers at the start of the time period.
- E refers to the number of total customers at the end of the time period.
- N is the number of new customers added within the time period.
As you multiply the numbers by 100, you get a percentage of your customer return rate.
It is generally considered that 20-40% is a great CRR range for most businesses.
Altogether, while customer retention is a headache to most online business owners, implementing some of the strategies listed in this blog post will increase your chances of getting and keeping long-term customers.
You have to implement those steps one by one and constantly refer to the customer retention metrics to judge which strategies work the best for you.
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