Six Simple Ways to Boost Customer Retention for Ecommerce

It’s cheaper to retain an existing customer than acquire a new one—five times cheaper.

And it’s not just cheaper.

According to a Temkin Group report, loyal customers are 5x as likely to repurchase, 5x as likely to forgive, 4x as likely to refer, and 7x as likely to try a new offering.

Moreover, loyal and engaged customers will provide you with more feedback, be more open to exploring your brand, and earn you wiggle room to try new things.

So it’s clear that customer retention is significant. And this couldn’t be more true than for an industry jam-packed with competitors like ecommerce.

So before we show you how to boost customer retention, let’s take a closer look at its benefits for an ecommerce store.

What are the benefits of customer retention for ecommerce?

There are two main components to growing an ecommerce business: customer acquisition and retention.

Retaining customers and converting them into loyal brand advocates can be challenging. But doing so has significant benefits for your store.

Ecommerce Customer Retention

It's easier to sell to existing customers

According to Simply Customer, you have on average a 70% chance of selling to an existing customer but only a 20% chance of selling to a new customer.

Simply put, it’s easier to convince existing customers to buy your products.

It increases Customer Lifetime Value (LTV)

Customer Lifetime Value (LTV) is a metric that shows you how much value a customer brings to your business in the time they continue to purchase products from your company.

So the longer a customer stays with you, the more money you’ll make. In fact, for ecommerce stores, 43% of profits come from retained customers.

Returning customers cost less and spend more

As mentioned earlier, it costs five times more to attract a new customer than retain an existing one.

So if you’ve already put in the hard work of acquiring a customer, you want to keep them around for as long as possible to reduce acquisition costs and boost revenue.

Loyal customers bring in new customers

People are 90% more likely to trust and buy from a brand recommended by a friend. So if you make efforts to satisfy your existing customer base consistently, they’ll tell the world about their positive experiences. Which in turn leads to new customers.

So you now know the value that customer retention adds to your ecommerce store. Now it’s time to make sure you’re not leaving any money on the table. And you won’t have to with these six simple tips to boost customer retention at your ecommerce store.

1. Give customers a reason to create an account

Customer retention is all about building deep and lasting relationships.

And having your customers create an account with your store is a great way to engage them with emails, offers, rewards, and more.

However, creating an account requires a commitment from visitors. This is why many choose to checkout as a guest if given the option.

So you must give them a strong enough reason to do so.

You can do this by offering attractive perks for registered users like discounts, early access to products, express shipping, etc.

You’ll also want to make sure the process of signing up is as fast and easy as possible (think short forms with just 3-4 fields).

You could even take it a step further and provide the option to create an account after the first order has been placed.

Package Free Account Signup
Package Free, the sustainable beauty and household brand, encourages new visitors to signup for an account with just their email address to access 10% off their first order.

2. Deliver high-quality customer service

Very few people will tolerate incompetent and ineffective customer support.

However, on the flip side, fast and friendly service can turn customer queries into sales. A well-handled resolution can convert a disgruntled customer into a loyal, repeat buyer.

Customer support is a great avenue to communicate with your customers pre and post-sales. Additionally, it provides you with the perfect opportunity to gather valuable feedback to improve your products, marketing, and overall shopping experience.

The first step to deliver high-quality support is to make sure your customer-facing team is well-trained and matches your brand’s tone and voice. It’s equally important to select the right ecommerce customer service software to manage conversations across different channels quickly and effectively.

If you help your customers get the most out of your products and avoid potential problems, it’s a win-win situation for both.

Allbirds Customer Support
Allbirds, the footwear company, has created an extensive list of FAQs. Visitors have the option of directly searching for answers to their queries or speaking to a support representative.

3. Implement a customer loyalty program

58.7% of internet users believe that earning rewards and loyalty points is one of the most valued aspects of the shopping experience.

And implementing a customer loyalty program is a great way to boost purchase frequency.

There are different types of loyalty programs you could offer like:

  • Points
  • Discount coupons
  • Cashbacks
  • Gifts
  • Lifetime memberships

Whatever the system you choose, it should motivate your customers to purchase more often from you.

It’s crucial to align your loyalty program system with your goals and your business’s financial state. You’ll also need to make sure it’s personalized and adds genuine value to your customers.

If you implement your loyalty program well, it’s mutually beneficial. Your customers get rewarded every time they shop with you. And you benefit from their repeat purchases.

Sephora Customer Loyalty Program
Sephora, the French chain of beauty supply stores, has a loyalty program consisting of points and tiers. Members of the program are eligible for several status-based rewards, including invites to parties and community events, exclusive access to the Beauty Studio apart from discounts and savings.

4. Optimize your website for a smooth customer experience

If you want your customers to keep coming back to your store, you’ll need to provide them with a positive shopping experience.

And this means your store needs to be user friendly. Here are some things your website needs to have for a smooth shopping experience:

  • Highly responsive and loads quickly
  • Easy to navigate
  • Optimized for mobile devices
  • A simple checkout process
  • Short forms and minimal steps to complete transactions

Additionally, you’ll want to go the extra mile to personalize the experience for your customers. And access to customer purchasing history through your online database gives you the perfect opportunity to show them products they’re most likely to be interested in.

Amazon is one such player that has laid out a great blueprint on how to increase customer engagement through hyper-personalization. Based on historical and real-time interactions, shoppers get a personalized homepage, product recommendations, and check out page.

Amazon Hyperpersonalization

Make it a point to reach out and ask your customers how to personalize their experience better. Genuinely caring for your customers and making them feel valued is central to increasing customer retention.

5. Use emails to educate and engage your customers

Email marketing is one of the most potent weapons in any customer retention toolkit.

Not only are emails the most preferred communication channel, but they’re also a great way to continue building a relationship with your customers before and after their initial purchase.

Firstly, you want the emails that Shopify sends out to your customers to actually be opened.

Next, you’ll also want to stand out from the crowd by personalizing these emails by matching them with your brand colors while including marketing components like product recommendations, discounts, and referral codes to drive sales.

You also want to set automation flows that send emails after every purchase, shipment or abandoned checkout within time-frames you specify.

Lastly, it’s extremely important to constantly measure the performance of your email notifications and gain insight into metrics like open rate, clicks, and ROI. This will help you adjust and optimize your email campaigns for the best results. The easiest way to do all of the above is by using a tool like Spently which will ensure that your emails are opened, on-brand, include marketing to drive repeat purchases, and are backed up by analytics that’ll help you improve.

Nudestix Spently Email Before N After

Just look at how Nudestix, the rapidly growing cosmetic brand, used Spently. They helped customers stay informed with their most up-to-date product launches, product recommendations, and promos with custom emails. And managed a whopping 84% improvement in the conversion rate of their abandoned checkout emails.

While planning your email marketing campaigns, here are some best practices to keep in mind:

  • Segment your customers based on purchase history to keep the content relevant.
  • Use whitespace to improve readability and make your emails mobile-friendly.
  • Schedule emails during working hours when they’re most likely to be opened.
  • Encourage email replies by ending your emails with a specific call to action.
  • Experiment with subject lines, email length, tone, etc. through A/B testing

6. Offer multiple deliveries and return options

Online shopping provides customers with many benefits. The most important of which is convenience.

Therefore to make the shopping experience as convenient as possible, you should offer as many different delivery options as possible. And not doing so can be costly. 45% of customers have abandoned a shopping cart because of unsatisfactory delivery options.

You could provide your customers with same-day or overnight delivery in addition to standard delivery options. And you can even offer your customers a ‘pick-up’ option to collect their items from you in person.

Likewise, you’ll want the return process to be clear and straightforward. Having your customers jump through hoops to return products is a sure-fire way to put them off. So make sure your logistics partners have a streamlined product returns process to ensure a smooth and hassle-free customer experience.

Ikea Returns Policy
Ikea offers a 365 day returns policy. Most stores probably can’t afford to have such a liberal policy. And it’s completely fine to have a stricter policy in place as long as your returns policy is easy to find and the terms easy to understand.

Keep your existing customers happy to grow your business

Increasing customer retention rates by just 5% increase profits by 25% to 95%. So it’s clear that your customer base is one of your store’s most valuable assets.

Don’t assume your customers will automatically keep buying from you. Listen to what they’re saying and continuously try to improve the customer experience.

Not only is it more profitable to retain than acquire, but one of the best ways to get new customers is to delight your current customers.

So kill two birds with one stone and implement these six simple tips to boost customer retention at your ecommerce store.

About the author

Jayanth Padmakumar is the Content Marketing Manager for DelightChat, the omnichannel customer support tool for small ecommerce brands. He’s spent the last half-decade living across Egypt, Peru, Colombia, Vietnam, and India. When he’s not geeking out on all things copywriting and content marketing, you can find him at the nearest watering hole watching sports and talking philosophy. Connect with him on LinkedIn or @jaypadmakumar on Twitter.

Jayanth Padmakumar Content Marketing Manager

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