The Importance of Customer Retention in EcommerceNovember 13, 2019
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.