Customer retention is more important than ever as eCommerce business grows in popularity and competition. An eCommerce Customer Retention program may boost average order values, increase buy frequency, and even broaden your reach via referrals and word of mouth.
Client retention is equally as important in eCommerce as new client acquisition. In today’s eCommerce environment, relying on acquiring clients for your online store is no longer enough to ensure the company’s success.
When we think of eCommerce revenue development, we frequently think of techniques and plans for recruiting consumers, improving the shopping experience, and broadening reach. However, this is not the only strategy to increase income and it may not even most successful.
In this post, we’ll look at several major eCommerce customer retention tactics that will satisfy your customers and also increase income in your online business.
What is eCommerce Customer Retention?
Customer Retention in eCommerce refers to the capacity to retain customers returning to online business to make more purchases. It is an essential component of any client retention strategy, particularly in eCommerce, because obtaining new consumers is usually far more expensive than maintaining existing ones.
Customers must be retained for two reasons: To begin with, even if you are adding new business, you cannot develop your company if you are also losing business. The second argument is blatantly obvious: Acquiring a new client is always more expensive than keeping your present consumers and selling more to them.
In eCommerce, retention entails providing a great customer experience that motivates people to continue purchasing from your business rather than competitors. However, This involves establishing long-term partnerships, providing high-quality products and services, and providing exceptional customer service.
Why is Customer Retention Important in eCommerce?
Customer retention is critical in eCommerce for a variety of reasons. Retaining consumers is far more cost-efficient than acquiring new ones. The acquisition might cost up to five times as much as retention. This has a direct impact on Return on Investment (ROI).
Client retention rates monitor both new and returning customers to evaluate how likely a client is to return. It demonstrates how effectively you are recruiting new customers, and how many old customers return, indicating customer satisfaction and a pleasurable experience.
As a result, your brand will become more trustworthy to other consumers, increasing the number of recommendations, expanding your client base, and eventually increasing earnings.
Customer retention is vital for eCommerce firms for various reasons:
- Increase ROI: Acquiring new consumers is excellent, but converting existing customers is less expensive and they’re more likely to spend more with you, increasing your ROI on ad spend and other marketing efforts.
- Improve consumer loyalty: Returning consumers are most likely pleased with the service you provide; otherwise, they would not return. Increasing client retention requires providing customers a reason to return again and again.
- Encourage word-of-mouth marketing: Returning consumers are more likely to tell their friends and family about your company. This is one of the most successful and strong marketing methods you can do.
- Obtain new customers: When buyers come upon a business with a passionate following, they’ll want a piece of the action. High retention rates demonstrate to potential consumers that you care about them and their experience with you.
- Lower client acquisition costs (CAC): When you have a high retention rate, you don’t have to spend as much money on acquiring new consumers because your present customers buy from you on a frequent basis.
- Boost customer lifetime value (CLV): Higher customer retention rates suggest a large number of returning customers, which implies the amount you generate from a single consumer over the course of their relationship with your company improves dramatically.
What is the Average Rate of eCommerce Client Retention?
According to data, internet shops have a 28.2% recurring customer percentage. This, however, varies by industry:
- Cosmetics: 25.9%
- Apparel: 26%
- Supplements: 29.1%
- Coffee 29.6%
- Pet products: 31.5%
Average eCommerce retention rates vary based on industry, size, and business model, but they typically sit between 20% and 30%.
Marketers assess retention by more precise measures, such as customer lifetime value, repeat buy rate, average order value, the average purchase value of loyalty redeemers versus non-redeemers, and time to second purchase, due to the broad variation.
Shifting focus towards retention leads to improvement across these KPIs, leading to higher overall retention rates.
Top 10 eCommerce Customer Retention Strategies to Increase Revenue
Customer retention may significantly affect the value of your marketing strategy. Businesses may employ a variety of efficient eCommerce customer retention methods to keep their consumers interested and returning to their online stores.
Here are the top 10 most effective and practical tactics to create a successful client retention strategy.
1. Prioritise Customer Service Experience
Many businesses struggle to give outstanding service, so if you succeed, you will surely stand out. Your clients will enjoy it. They will feel well-served, respected, and glad that you made their life simpler rather than more difficult.
A company that can maintain consistent customer service quality across numerous channels has a good chance of retaining 89% of its consumers. That is what excellent service accomplishes. And it achieves this by excelling in little things.
Here are a few customer service ideas to help you stand out.
- Make yourself available via phone, email, online chat, and so on.
- Use a variety of approaches that work for you
- Respond to inquiries and difficulties Customers should not irritated and ignored.
- Nothing is more aggravating than dealing with a customer care agent who is unfamiliar with products and services.
- Don’t expect a difficult-to-use website to provide a pleasant user experience.
2. Create Customer Retention Plans
As per research, repeat customers account for only 8% of website visitors on average, yet they provide 40% of the site’s income. Creating a customer retention strategy that analyses and improves key performance metrics is critical to retaining a strong client base and increasing earnings.
To develop a strategy, you must first identify and establish key client retention. It is encouraged to discover retention factors such as product quality, customer service, price, marketing activities, and so on, and build a strategy.
Some suggestions for improving Customer performance include:
- Determine the critical client retention KPIs for your eCommerce firm.
- Set quantifiable objectives.
- Create a data analytics platform to measure key performance indicators.
- Always strive to improve your outcomes and approaches.
3. Increase Client Retention Rate
Conversion Rate Optimisation (CRO) is the practice of increasing a website’s conversion rate by analyzing client behavior and comments and using that data to improve the customer experience.
CRO involves the creation or modification of features and content such as landing page design, copy, adverts, and calls to action. The objective is to increase the percentage of the website or mobile app visitors who convert.
CRO can help you reduce marketing and customer acquisition expenses, improve SEO efforts, gain knowledge of consumers, increase customer lifetime value, and improve user experience.
Some options for using Customer Rate Optimisation:
- Use A/B testing or user testing.
- Simplify navigation and use a heat map to track user activities.
- Encourage certain behaviors, such as purchasing or signing up for a newsletter.
- Increase the speed of your website.
4. Contact Customers Frequently
Customers must perceive that you are present. Keeping in touch on a frequent basis helps maintain your brand in mind and keep them up to date on any news. However, not every consumer wishes to be communicated with in the same manner.
Depending on communication choices, using email marketing, SMS and push notifications, social media, and advertisements is an effective method to keep customers informed about new items, promotions, and discounts.
It’s a good idea to launch targeted remarketing campaigns to remind clients of things they’ve previously viewed on the website. Moreover, You may urge them to return and resume or repeat purchases by displaying these reminders.
Suggestions to help you communicate with customers:
- Create control groups to prevent under or over-communication.
- Adapt the messaging to the individual demands of each consumer.
- Reward loyalty, and provide special bargains.
- Use a Marketing Automation tool for campaign management
5. Provide Smooth Personalized Communication
Furnishing customers feel unique and cherished is one of the most critical aims of client retention. To do this, your client retention plan must include personalized content such as personalized suggestions, targeted discounts, newsletters, and offers.
In fact, 62% of customers anticipate firms sending personalized offers or discounts based on their purchasing history. Managing data and consumer preferences correctly will help you to create a shopping experience, which will result in increasing customers.
Some ideas for improving personalization:
- Consider data from all touchpoints, such as email, mobile apps, websites, and social media.
- Build a great customer journey by creating a seamless experience.
- Test your speech and assess its effectiveness.
6. Use Cross-selling and Upselling Methods
Cross-selling strategies may raise revenue by up to 30%, while upselling can increase revenue per client by 10-30%. These strategies clearly have a significant influence on income, and incorporating them into client retention plans may be quite beneficial.
Both urge clients to purchase either complementary things or higher-end products. It is perfect for promoting new arrivals and incentivizing consumers who acquire the fewest sellers through special discounts and promotions.
Offering the correct product to the right customers will boost customer satisfaction and loyalty since they will have a better overall experience with your company.
Ideas for increasing customer purchases:
- Encourage initial and early purchases.
- Rewards on Repeated Purchases
- Provide unique offers to returning clients.
- Demonstrate clients to understanding requirements and preferences with offers
7. Make Consumer Loyalty Programs
The most successful technique for increasing client retention is to create a loyalty program. To return to making a consumer feel unique, a loyalty program allows the company to reward customers every time they make a purchase and incentivize customers to keep buying with additional incentives.
Loyalty programs are the most effective approach to fostering trust and long-term connections and to keep customers preferring products and services over rivals. Games, challenges, and leaderboards may make the brand’s experience exciting, competitive, and enjoyable.
Here are suggestions for improving the performance of the loyalty program:
- Special rewards, such as free shipping and returns
- The reward for suggesting the program to friends and family
- Allow access to exclusive discounts and promotions.
- Create a tiered-based program.
8. Survey Customer Preferences and Areas
Customers must be able to communicate with you. Encourage clients to share their experiences with you so that you may resolve any difficulties or complaints as soon as possible and stay on top of any situation.
Surveys are one method for gathering client feedback. The feedback you get allows the company to enhance its products and services while also getting to know its customers better. You are free to ask inquiries and accept new requests.
Here are some ideas for gathering consumer feedback:
- Reward consumers for responding to surveys.
- Make use of social media outlets.
- Make a community to share experiences.
- Ensure that staff responds quickly and goes above and beyond to fix problems.
9. Use Zero-party and First-party Data
Zero-party data is information gained directly from your users, whereas first-party data is information obtained from users based on their behavior on your website or mobile app.
Using this data will allow you to understand the client base, interests, and demands, as well as adjust offerings and marketing efforts depending on consumer preferences. Customers become more engaged with your brand, and sales will rise as a result.
Here are suggestions for better understanding customers:
- Determine which data is necessary for business.
- Use this information to segment the audience.
- Identify and target clients who convert well.
- A win-back program is used to re-engage churned consumers.
10. Exhibit Brand’s Story and Values
Aside from everything else, developing an emotional connection with your consumers may go a long way. You may provide experiences to clients by making the buyer journey more motivated, which may prompt them to remain loyal to the business.
Moreover, You may achieve this emotional connection by telling the narrative of your brand. You may include the brand’s narrative on the website’s homepage or About page. However, You might discuss how an eCommerce firm came to be, the challenges you faced, and its successes.
You can also discuss your values. If you care deeply about anything as a brand, be sure to tell customers about it. If your values align with theirs, you will have a distinct advantage over the competition.
Assume you donate to a worthy cause, such as an ecologically friendly endeavor, community service, or charity. In such a scenario, you should display it on social media and your website.
Customer retention is the most effective strategy to boost profitability, raise brand recognition, and build brand champions. Improving client retention in eCommerce can difficult task to start. By using tactics outlined in this article, you will be able to significantly boost client retention rates.
Following even a couple of these 10 customer retention methods to your eCommerce business can help you retain more customers, improve income, obtain more reviews and recommendations, and expand your business over time.
With correct digital marketing tools, you can implement customer retention techniques that increase income and improve the reputation of the company. If you wish to build a client retention plan and/or loyalty program for your firm, contact our specialists. M-Connect Media provides the tools you need to put eCommerce client retention plans into action.