9 Strategies To Improve Customer Retention (The Key To Ecommerce Growth)

What is customer retention?

How do you measure customer retention rate?

Why customer retention is important in ecommerce

  • Increase ROI: Acquiring new customers is great, but it’s cheaper to convert existing customers (and they’re likely to spend more with you), which increases your ROI on ad spend and other marketing efforts.
  • Boost customer loyalty: Returning customers are likely satisfied with the service you’re offering, otherwise they wouldn’t come back. Increasing customer retention rates means giving shoppers a reason to come back time and time again.
  • Acquire new customers: When shoppers come across a brand that has a devoted fan base, they’re going to want a slice of the action. High retention rates show potential buyers you care about them and the experience they have with you.
  • Reduce customer acquisition costs (CAC): When you have high retention rates, you don’t need to spend as much on getting new customers because your existing customers purchase from you on a regular basis.
  • Increase customer lifetime value (CLV): Higher customer retention rates indicate a high number of returning customers, which means the amount you make from a single customer over their lifetime with your brand significantly increases.
  • Promote word-of-mouth marketing: Returning customers are more likely to recommend your brand to their friends and family. This is one of the most powerful and effective marketing strategies you can put in place.
  • Focus on growth: It’s extremely difficult to grow and scale your business if the majority of your efforts are focused on constantly acquiring new customers. If you consistently need a large volume of new customers to keep revenue coming in, you’ll never be able to dedicate the necessary time and resources to growing your business.

Customer retention strategies in action: 9 ecommerce examples

1. Implement a customer loyalty program

2. Send SMS and email marketing win-back campaigns

3. Identify high-converting customers

4. Tailor user experience

5. Get customer support involved

6. Follow up immediately with new customers

7. Create a referral program

8. Stay in touch and go the extra mile

9. Constantly learn more about your customers

How to improve your customer retention rate with CRO

  • Identify your most profitable customers: CRO starts with a deep dive into your website data. Using specific tools like analytics and heatmaps, you are able to identify which segments of your customers are generating the most revenue. Once this is done, you can then double down on those segments, seeking to raise conversion rates by improving the user experience.
  • Identify your most profitable channels: In addition to identifying your most profitable customers, CRO also helps you determine which channels are driving the most revenue. Which is performing better: email or PPC? How effective is your social media strategy? What’s the conversion rate for Facebook ads versus PPC? CRO enables you to determine which channels are generating the most revenue and then double down on those channels.
  • Adapt to the preferences of your customers: Ecommerce is constantly changing, and what worked last year probably won’t work as well this year.
  • Determine why customers aren’t converting in the first place: To state the obvious, if someone doesn’t initially convert on a page, there’s no chance of repeat conversions. Hence, a low initial conversion rate translates into an even lower repeat conversion rate.Using CRO, you can determine what is keeping people from making an initial purchase. Analytics may reveal that your navigation menu is too confusing, causing people to become lost as they try to navigate your site. Or user testing may show that your checkout process is too cumbersome, leading to an abundance of abandoned carts. Once you’ve identified these issues, you can then take steps to increase your first-touch conversion rate.
  • Maximize your existing retention efforts: CRO is like steroids for your existing customer retention efforts, creating a virtuous cycle. Customers come to your site and, due to your CRO efforts, convert at a relatively high rate. When they come back to your site, due to email marketing or retargeting, the repeat conversion rate is also relatively high because of the CRO techniques you’ve employed.

Now is the time to focus on customer retention



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