The Importance of Customer Retention in Ecommerce

The importance of customer retention in ecommerce is widely talked about, but are you making it the priority you should? If you know that the cost of new customer acquisition is far higher than the cost to retain existing customers, why not implement a concerted retention strategy?

Your ecommerce business’s customer retention is directly impacted by not only your product value, but also your adherence to best practices for experience and satisfaction. Here are three tips for customer retention in ecommerce:

  • Customer Rewards Based on Longevity and Volume: Nothing creates the opportunity for long-term, repeat buying better than offering ongoing rewards (via points earned, volume discounts, status tiers, etc.). Customer retention rewards can be based on past purchases, subscription discounts, amount purchased, buyer “anniversaries,” and existing-customer promotions. By incentivizing purchases from business you’ve already “won” you remove the unpredictability of prospecting and focus on adding value for reliable buyers.
  • Gratitude Perks: The value and importance of ecommerce customer retention you place for your business will be most tangibly demonstrated to customers when you pass it on in acts of gratitude. You can send unique and innovative emailed thanks even to first-time buyers to help gain their loyalty. In addition, depending on your product make up you may want to make it standard practice to extend birthday acknowledgement in email with an offer or discount, first purchase “anniversary” acknowledgement, bonuses for friend referrals, free samples, and other thank you gifts and perks. Even order reminders (e.g., your 30-day supply runs out soon, reorder before it’s too late) can be a welcome service perk for today’s busy consumer. Appreciation and acknowledgment are surefire ways to make buyers feel important and valued and help retain them long term.
  • Online Tools & Services: The better your website experience and the easier you make it for customers to find what they’re looking for, to reach a support representative, or to self-serve for common tasks, the more likely they will be loyal to your brand. What separates poor user experience from great experience are the steps and processes (seamless or difficult) that brands make common tasks like online return requests and processing, finding and reviewing account information, making edits to recurring deliveries, etc. The easier these things are for your users the more likely they will keep coming back and buying. Maintaining a positive image in ecommerce is key.

The 80-20 rule of thumb applies to ecommerce retention just as much as any other industry. If the vast majority of your sales will come from only 20% of buyers, catering to those buyers is essential to retaining them. With the right offers and service, your ecommerce customer retention will increase, which will improve your ROI and allow for greater forecasting accuracy.

4 Benefits of Customer Satisfaction Surveys

How much do you know about your buyers and what they think about your products and your website? If you could know more, would that be valuable for your brand? Ecommerce experiences lend themselves seamlessly to collecting information from your visitors that can be used to improve your website, products, marketing and sales.

Here are some of the benefits of customer satisfaction surveys:

1. Product Improvements and Expansion

Many ecommerce sites rely heavily on reviews to collect insights into what consumers think about their products. The benefit of customer satisfaction surveys is that they are guided vs. open-ended, so you can elicit more exacting details from your customers.

With a survey you can pinpoint specific areas you want to learn about and formulate those into questions to expand your product line or improve current products. For example, what if you are considering offering new colors or flavors of certain products? You can include questions about the popularity of those new options in your survey. Or, what if you would like to expand an existing product line to include offerings for other demographics (e.g., children)? You can survey customers on whether they would also be interested in purchasing the product for their children.

Surveys give you the ability to leverage website visitors and customers for free or low-cost (you can offer incentives for people to participate) product research and development.

2. Website Upgrades

Your website features and offerings can also benefit from customer satisfaction surveys. Imagine you want to design and launch a new product-oriented blog. You have some options:

1. You can invest in creating the new blog, hire writers, deploy it on the website and then track results to see what your website visitors think.

2. You can survey your website visitors about your blog idea, confirm they are interested and dig deeper into the kinds of topics they would be interested in reading about before you invest any time, money or other resources into creating the blog.

While not necessarily a perfect science, surveys are a great opportunity to collect feedback on website ideas you have before you act.

3. Conversion Rate Optimization

Since surveys are completely customizable, why not use them to get to the heart of the matter and learn about your audience’s behaviors directly? What inspires them to buy and what would get them to buy more--or sooner? The top benefit of customer satisfaction surveys is learning what motivates your buyers to choose your brand and products and to use the data to increase conversions.

Following are some ideas of questions than can help in this vein (these should we multiple choice questions with answer options, including “other” with open comment space):

What makes you most interested to buy XYZ product?
When do you think you are likely to buy XYZ product?
Would any of the following (offers, incentives, etc.) make you buy XYZ product today?
What are your top concerns when comparing options before purchasing XYZ product?

4. Demographic Data

Many brands invest a significant amount of resources into market research in order to help determine the best ways to advertise and market their products. Customer satisfaction surveys can benefit your brand by allowing you to collect key demographic data, which can help you construct a blueprint of your target audience. You can better tailor the messaging on your website and in your marketing with those demographic details. The only flaw in relying on this data is it doesn’t help with expansion into new markets. However, if you are confident in the targeting of your current buyers and you just want to increase overall marketshare among them, then a survey is a great way to pinpoint exactly who your customers are.

Customer satisfaction surveys can benefit your ecommerce company in a range of ways and are relatively easy to deploy via email marketing or with software on your website. Given their ease of dissemination, you can create numerous surveys over time and offer them to different visitors and buyers (based on behavior or randomly) to increase ROI from your website.

Statistics that Show the Importance of Reverse Logistics

Reverse logistics management is an important factor for success in ecommerce - perhaps more than you may realize. To help paint a picture of all the different ways reverse logistics impacts businesses and their customers, we'll take a look at some fascinating data points from around the web and examine their importance in developing broad logistics strategies.


Stat: Ecommerce purchases are 3x more likely than retail purchases to be returned (USPS)

Takeaway: It’s all too easy to let outbound logistics absorb all your focus, but remember: the more you ship, the more returns you’ll have to process (statistically speaking). Plus, because they are such a significant aspect of ecommerce, returns are also a major component of the customer experience your business becomes known for. Streamlining your management processes for reverse logistics today will help you (and your customers) save time and money as the number of returns you process inevitably grows alongside your sales.


Stat: 20% of ecommerce returns occur because of shipping damage (Invesp)

Takeaway: Considering that the cost to replace a damaged product can be 17x the original cost to ship it, ecommerce companies would be wise to prevent those losses by modifying their approach to reverse logistics. Customizing your packaging to an optimal size and level of protection can be simple yet effective change that gets better DIM shipping rates, improves return rates for damaged products, and generates less packaging waste for a cleaner environment. And speaking of reverse logistics and the environment…


Stat: About 5 billion pounds of returned merchandise ends up in landfills (Retail Dive)

Takeaway: That’s a huge amount of waste – and it doesn’t even include waste from excess packaging materials or the fuel spent trucking products from fulfillment center to customer, then back to the fulfillment center and off to the dump. If you want your business to be more eco-friendly, sustainable, and profitable, think about ways you could be recouping costs from returns or donating them.


Stat: 58% of shoppers say they are “increasingly not satisfied” with the ease of making returns. 72% of shoppers are willing to spend more per order, and order more frequently, from online stores with a customer-friendly returns process (Shopify)

Takeaway: As the saying goes: “The customer is always right.” Optimizing your reverse logistics has the potential to do wonders for your brand reputation and customer trust levels.

Tactics for Sealing the Deal at Checkout

From the perspective of customers, the checkout process is the most tedious part of shopping online. With that mindset, it's no wonder that many ecommerce sites struggle with cart abandonment.

The less time and actions your checkout requires, the more likely users will be to complete their orders. While looking for ways to streamline the design of your cart and checkout pages can be very effective in this regard, there are other strategies you can deploy to improve your checkout process to make it more convenient for customers, such as:

Alternatives to account creation

If your ecommerce site requires account creation to complete a purchase, you may want to consider alternatives like Guest Checkout and/or social media login functionality. While account creation helps you collect information about your customer base, the process adds more steps to what should be the simplest part of your ecommerce site.

More convenient payment options

Alternative payment options are designed to shorten the checkout process by eliminating the multiple form fields required for credit card payments. Additionally, the more payment options you can accept, the more customers you can serve. However, there are many systems to choose from – so consider surveying your customers to find out which alternative payment options are most popular for your target audience.

Autofill form fields (even for coupons)

By streamlining the process of inputting information, you can speed up your checkout while demanding less effort from your customers. Incorporating autofill features into your forms accomplishes this while also reducing the amount of errors that come from manual user input. By autofilling the coupon field with your latest promotion, you instantly show customers your best deal so they don't have to shop around – perhaps the most common motivation for abandoning the cart.

Customer Experience, Explained

It's common for businesses to obsess over customer satisfaction levels – after all, it's true that happy customers are key to long lasting success in retail and ecommerce. However, it's only part of a larger picture: the customer experience.

A good customer experience comes from consistently meeting the individual's expectations during ALL touchpoints with your business. Things like the user experience of your website, the content you post in your social media channels, your returns policy, customer service interactions, the unboxing experience, and many other factors are all cumulative to the customer experience.

Someone who was able to find and purchase products they wanted from your site, and received them on time, is a satisfied customer. However, that's not a difficult bar for your competition to clear. That's why focusing on the customer experience your company offers is critical for standing out from competitors and earning customer loyalty.