12 Customer Retention Strategies For eCommerce

Customer retention strategies, if you ask me, are more important than all of the collective hustle it takes to get new customers.

Think about it.

People don’t buy the very first time they see your brand and know about your business. [If they do it, it’s attributed to luck].

Luck is not a strategy and you know it.

Customer retention strategies or marketing retention strategies are laser-focused in keeping your customers glued to your brand. To make them think about your brand at all times. Your customers end up donning the role of heroes, evangelists, and loyalists.

Now, that’s a sweet spot for a brand to be in. If anything, you’d want to be there. So, let’s dig in: 

Benefits of Customer Retention Strategies

Customer Retention Metrics That Matter

12  Best Customer Retention Strategies, Ever

  1. Customer Focused Culture, In Your DNA
  2. Customer Support [The 9 Billion Dollar Secret] 
  3. Push For User Account Creation
  4. Build Onboarding Experiences
  5. Use Power of Email Marketing & Automation 
  6. Start a Referral Program
  7. Use Gamification for eCommerce 
  8. Double Down on eCommerce Loyalty Programs
  9. Use Retargeting (for existing customers) 
  10. Smart Personalization For Customer Retention 
  11. Use SMS Marketing as Customer Retention Strategy 
  12. Tap Into Affiliates and Partners

Benefits of Customer Retention Strategies

Keeping customers in would mean that you’d have to work less to get new customers. But that’s not just the only reason.

According to Stephanie Knapp of Vero,

  • Around 40% of your loyal customers will buy from you, even if they have cheaper options elsewhere.
  • Losing a customer, on average, will cost you a heady $243.
  • Increase customer retention rate by a mere 5%, and your eCommerce brand stands to pull in profits by at least 25% to 95%.
  • You give customers value, and they’ll give you precious data (apart from the evangelism and loyalty). More than 63% of consumers share more data with a company that offers great products (accompanied by great experience).

Alex McEachern of Shopify helpfully uses a graph to show you the timeline and general guidance for just what percentage of investments should go for customer retention.

For instance, if you are just starting your eCommerce journey, you’d focus on acquiring customers (and not on customer retention strategies).

The percentage reduces as you grow (but it’s never over, as you can see).

timeline for customer retention strategies

Customer Retention Metrics that Matter For eCommerce

Just because customer retention is profitable and crucial, this doesn’t mean that you don’t care about customer acquisition — finding new customers, expanding your reach, and doing what you do to continue to expand your customer base.

The point is that while you are at it, don’t forget your existing customers. It’s a dual-pronged approach.

Not every metric is important to a business.

Thanks to the trash content on the Internet (or maybe we are just as vain as humans can be), the focus is squarely on ego-pumping metrics, vanity metrics, or “me metrics”.

Nah, you don’t track those. Useless.

Here are the metrics you should track.

  • Regular but critical metrics such as sales, orders, and revenue
  • Customer Lifetime Value
  • Average Order Value

Do keep an eye on traffic, leads, orders by channel, ROI, and others.

12 Best Customer Retention Strategies, Ever

From onboarding experiences to smart customer retention focused marketing campaigns; from how your eCommerce store works to loyalty programs, take a look and see what you need to do (or do what you need to fix it).

#1: Customer-focused culture, In Your DNA

It’s not about what you printed and laminated on a plaque and hung it up on the wall; it’s more about what you do. 

How far would you go for your customers? Just how much (or collectively, as a business) effort are you willing to take for them? What will you be willing to do that your competition doesn’t bother with? 

Customer-focused culture doesn’t come about as a result of a useless strategy meeting you’d have. It comes to the fore when you have this customer-focus as the spine of your business — at the very core.

The underlining, all-defining DNA. 

It should be all-pervasive — a value embedded into you (or every single person who is a part of the team). 

This is also the reason why brands such as Southwest Airlines, Zappos, Amazon, Toyota, and a few others are hugely successful (to this day). 

#2: Customer Support & 9 Billion Dollars Up For Grabs 

As a natural “Step 2” of the point made above, your customer support workflows — What you do, what you say, how you say it, the exact steps you take, the processes you follow, and everything else will flow from that “customer-focused culture”. 

The obsession to serve well, serve fast, and serve in a way that makes an impact paves the path to building better customer support systems. 

Before you roll your eyes, understand this. Brands leave more than a whopping 9+ billion or more on the table (which could have made a difference to your bottom line). Customer support is the profit-making function you ignored

You can’t retain customers (no chance) if you don’t serve those who already trusted you with their hard-earned money. 

Take advantage of some awesome and comprehensive customer service platforms out there. Make use of the tech and the expansive toolset they offer. 

See what customers want:

Impact of customer service eCommerce

Delight, love, reciprocity, being heroic, and evangelism — these are the new benchmarks and goals for eCommerce (if you want to survive). 

Now, go serve as you should. 

#3: Push For User Account Creation 

Let’s say your eCommerce platform of choice is Shopify.

Or, if you were selling digital products, you’d want to use the likes of Podia, Payhip, or Thinkific. In all of the cases above (regardless of the platform), you’d want to allow customers to create their accounts (and not checkout as a guest). 

All of the platforms mentioned here have the option of customers having to create their account — either by explicit signing up or by default. 

Make users create store accounts

On Shopify, customers can now create accounts while checkout, or when they login using a one-time six-digit verification code, 

#4: Build an Onboarding Experience 

Onboarding experiences don’t have to cost you an arm and a leg. One simple video saying “hello, we are glad you are here” in the customer account area could just be the onboarding experience you could deliver. Or maybe a video in an email (soon after a customer signs up). 

Or, you could be elaborate and have a complete onboarding experience (depending on what you sell).

For SaaS products and for services, you should deliver a slightly more involved onboarding experience. 

Here’s an example of what Databox does, as you sign up: 

Build onboarding experiences

There’s a guided experience (step by step) to ensure that you complete the onboarding process: 

  • Setup your Google Analytics
  • connect Google Analytics with Databox
  • Connect Your Sources
  • Build Your First Databox Dashboard 
  • Watch an intro video — all the while your progress is tracked (hello gamification!). 

Onboarding experiences — when you do them right — are delightful (and offer a sense of completion). 

Some closure, for an otherwise intangible experience, of buying something online. 

#5: Use the Power of Email Marketing & Email Automation 

Here are some facts: Email converts at the highest level. Don’t chase the next available social media platform just because it’s cool. 

Do what works. 

According to Shopify’s Data from Black Friday Cyber Monday sales historically, email has the highest conversion rate (at 4.29%), only followed by Search (SEO). Social media came in last at 1.81%. 

eCommerce Email Marketing Conversion Rates

You could start email marketing for eCommerce for free using Shopify Email (built right into Shopify). 

Or, use Shopify Email with the power of Shopify Flow (also built into Shopify). 

Roll out automated email marketing workflows such as a simple welcome email series, or a targeted workflow.

Or you could go advanced and use platforms such as Drip, ConvertKit, Klaviyo, or Mailchimp — depending on your choices and the type of eCommerce business models that you have. 

The point is this: Use email marketing. Don’t just roll your eyes. 

Read:

Increase Sales and Customer Lifetime Value By Automating Emails

How to Segment Your Email Lists For Better ROI in Ecommerce

#6: Start a Referral Program 

You might think that “referral programs” are great for sales and new business. Realize that referral programs are subconsciously a great way to retain customers as well. 

Each time a customer “refers” someone they know (or those that they think will appreciate your products), they are putting their skin in the game. 

They are taking accountability enough that they are sending out referral links to their social media followers, family, friends, and acquaintances. 

Imagine the subconscious commitment they are making to your brand while referring others to you? 

Note: This isn’t the same as running full-fledged affiliate marketing programs or making affiliate marketing (as a channel) work for your eCommerce business. 

Read: 

Top Referral Program Software You Should Consider

#7: Use Gamification For eCommerce 

Research says that game elements (on your eCommerce store pages) have a positive effect on user engagement. 

See what some brands achieved with gamification:

  • Samsung Nation increased its product reviews by 500% and site visits by 66%. 
  • Teleflora increased traffic to their site by 105% and boosted conversion rates by 92%. 
  • IBM’s long-term engagement has shown an increase of 299% increase in comments. 

Just don’t ask me how many times I log into the “Amazon App” just to collect points, to spin wheels in the “Fun Zone”, take Amazon Quiz, and so on. 

Amazon uses gamification, whether you call it that or not. 

Did you know that using gamification for eCommerce  has direct results in sales, engagement, and customer retention? 

Gamification

Amazon even uses gamification to incentivize employees and to improve productivity. But we aren’t going there. 

#8: Double Down On Loyalty programs 

Starting a loyalty program for eCommerce could be as simple as “rewarding” your customers for their purchases (or even simple actions they take). 

According to YotPo’s State of Brand Royalty 2021 Global Consumer Survey, brand loyalty is not dead. 

Brand loyalty, if anything, has only increased. Customers who rated themselves as “Loyal” went up from 24% in 2019 to 26.4% in 2020. Around 59% of consumers rated themselves loyal to a brand. 

Loyal customers will be happy to join a VIP program, layered memberships, or a loyalty program. These customers will spend more even if there are cheaper options elsewhere (the number of such customers went up to 56% in the year 2020).  

Brand Royalty In eCommerce

Please do note, however, that just launching a loyalty program doesn’t give you any guarantees. What does help, however, is going that extra mile.

Do that by: 

  • Stand for a cause, go charitable, go green, or do something.
  • Give away some perks as a part of the VIP program or the loyalty program. Exclusive resources? Detailed product demonstrations? 
  • Start a community (only for existing customers). 

You get the drift, right?

If you get your eCommerce loyalty programs right, you get benefits: 

  • More sales, more revenue, and sustainable profits. 
  • Higher customer retention would mean lesser resources used to find new ones. 
  • Brand advocacy, brand evangelism, and a higher mind share. 
  • Increased average order value. 
  • Customer referrals (without you asking for it). 

Read: 

7 Innovative Customer Loyalty Programs & How to Start

#9: Use Retargeting (for Existing Customers) 

Since we are talking about customer retention strategies, we aren’t going to dwell on retargeting for eCommerce (or otherwise) in general or various other ways to use eCommerce retargeting (such as to increase eCommerce sales). We are also not going to talk about using retargeting to reduce shopping cart abandonment instances. 

Specifically, using retargeting as a customer retention strategy for pampering your existing customers is the focus here. 

First, you’d have to ensure that you have these targeted audiences (existing customers) built up (and continuing to build, as you grow) on an automatic basis. Often, you’d also have layers of these audiences (depending on your eCommerce business), such as: 

  • Customers who only purchased once
  • Customers who purchased more than $100 but less than $500 in Customer Lifetime Value (CLV) 
  • VIP customers (regular customers)

…you get the idea? 

#10: Smart Personalization For Customer Retention 

Normally, you’d use several lead generation elements on your eCommerce site such as: 

  • Lightbox popups 
  • Floating bars
  • Scroll boxes
  • Gamified Wheels
  • Page-level targeting
  • Exit-intent detection and exit-intent popups
  • Geolocation targeting

Most of these can be used for lead generation. But you can also use these as a part of your never-ending efforts towards customer retention strategies. 

By personalizing these elements, you can create a personalized and customized experience for your existing customers. 

Using OptinMonster alone, for instance, you can deploy targeted on-site messages. OptinMonster’s Onsite Follow-up campaign™ solution helps you display targeted website messages (using some or all of the options above) to your existing customers, existing email subscribers, and also returning visitors. 

Here’s a campaign that shows up only when existing customers turn up on a site, urging them to finish the trip plan they started. 

Onsite targeted messaging

You can customize OptinMonster campaigns in any way you see fit. 

For instance, you could just wish them “hello [with their first name], and give them something to do”. 

Read:

7 Ways To Use Personalization To Create Unique Online Shopping Experiences

#11: Use SMS Marketing as a Customer Retention Strategy 

First, what you are reading here about SMS marketing is not for “acquiring customers” — which you can (and should consider). We are only talking about SMS marketing as one of the main customer retention strategies. 

Second, let’s cover what you don’t do with SMS marketing.

  • Don’t spam. Ever. 
  • Don’t bother sending messages if you can’t personalize. What do you mean by sending a message that starts with, “Dear Customer…”. In this day and age, this is not an excuse. 
  • Stay relevant. 

SMS marketing is huge. Why? Almost every single SMS message is opened (and people clutch their phones all day long). 

Here are important SMS Marketing Stats for You: 

  • More than 66% of customers sign up to receive text messages over the past year (2021) and 19% are interested to receive messages from brands that they know, love, and trust [Source: Attentive
  • The average open rate for SMS is 95% [ Source: TextAnywhere ]
  • SMS marketing is especially useful for strong customer engagement (and hence marketers and eCommerce brands use it) [Source: Forrester & HubSpot

Do you see how SMS marketing now plays a role when it comes to customer retention strategy? Use SMS marketing to stay in touch with your customers, to nurture and build relationships, to send in updates (shipping, inventory restocking, news, trends, and more), and so on. 

Read: 

A Beginner’s Guide to SMS Marketing: Examples, Best Practices, and Tips  

14+ SMS Marketing Stats You Should Know 

#12: Turn Your Partners and Affiliates Into hardcore Evangelists 

You’d be surprised to know many brands don’t use the power of partner marketing or affiliate marketing. Those that do? They don’t do it well enough. 

Affiliate marketing is worth several billions of dollars. Do it right and you’d have an army of dedicated high-achievers working for your brand, round the clock.

For eCommerce merchants, each of these affiliates puts in the work, the marketing chops, and do what they can do: put out the word, to promote, and to help sell these products. 

There are millions of affiliates (content creators, bloggers, YouTube Influencers, Instagram influencers, and others — not including several other micro-influencers). 

Affiliate marketing is one of the ways to monetize all of the work they do and the content they produce. 

Imagine how it is for an affiliate or a partner: a dry signup process and a link is thrown at you. Then, it’s all over. The affiliate or the partner is left all alone, working by themselves. 

Questions asked are never answered. No resources to learn the intricacies of affiliate marketing specific to that brand or in general (maybe things about creating deep links or other techniques). 

For eCommerce brands, affiliates themselves can be a huge pool of customers (and most affiliates are). 

Retain your partners and affiliates well enough and you’ll know how to retain anyone else. 

Why? Affiliates are smart, well-trained, and experienced. Retaining affiliates shows you the way to retain all other customers ( bonus points for the fact that happy affiliate partners will push up sales, thanks to their evangelical efforts). 

Which of these customer retention strategies are you going to use for your eCommerce growth? What do you think about these customer retention strategies? 

Let me know by connecting with me on Twitter, on LinkedIn, or on my LinkedIn company page.

You are here 👉 Home » Blog » Ecommerce » 12 Customer Retention Strategies For eCommerce

Some of the links in posts and elsewhere are partner links and affiliate links (the only way I keep some money flowing in). You can purchase some of these products and I make commissions which keeps the lights on. You never pay more. Sometimes, you get discounts. Thank you for understanding. Here's the Aff Discloure Policy (if you love that kind of stuff).