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Ecommerce Customer Retention Strategies: 10 Cheap + 10 Highly Effective
E-commerce customer retention strategies are essential for your online business. Focusing on retention increases repeat purchases, reduces customer acquisition costs, and boosts your business’s profitability. Overall, implementing effective customer retention strategies is crucial for your online business’s long-term success and sustainability.
In this article, you’ll find the 20 best eCommerce customer retention strategies to consider when designing your online business marketing efforts.
10 Cheap eCommerce Customer Retention Strategies
Cheap e-commerce customer retention strategies can be highly beneficial. They help maintain a loyal customer base without significant investment. Strategies like email marketing, social media engagement, and sharing educational content are cost-effective yet impactful. Implementing affordable eCommerce retention strategies increases sales, customer lifetime value, and overall business sustainability.
Implement Rewarding Loyalty Programs
Loyalty programs are a fantastic way to encourage repeat business. Offering points or rewards for every purchase incentivizes customers to return to your online store. The more they buy, the more rewards they accumulate, which you’ll redeem with discounts or free products. Not only does it make your customers feel valued, but it also increases the likelihood of them choosing your online store over competitors. Remember, retaining existing customers is always more cost-effective than acquiring new ones. A well-designed loyalty program significantly improves customer satisfaction and retention.
Provide Multiple Payment Options
Offering various payment options is crucial for keeping your customers satisfied and returning for more. Not every customer has the same preferred method of payment. Some prefer credit cards, while others want digital wallets, cash on delivery, or cryptocurrency.
By providing multiple payment options, you cater to a broader audience and remove any barriers that might prevent a potential customer from purchasing.
Additionally, it shows that your business is modern and adaptable, qualities that customers appreciate. Offer as many payment options as possible and display them on your website. It will enhance the shopping experience, boost conversion rates, and improve customer retention.
Offer Hassle-free Returns
The return process is a pain point for both customers and businesses. However, offering a hassle-free return policy can be a game-changer for your eCommerce store. Make the process straightforward and convenient.
Clearly state your return policy on your website, offer free returns if possible, and provide a prepaid return label. You build trust and confidence by making it easy for customers to return products.
Customers will keep buying from you, knowing that if the product is not suitable, they will easily return it without any headaches. Remember, a positive return experience increases the chances of repeat purchases and positive word-of-mouth.
Secondly, the time you spend arguing and convincing unsatisfied customer that you are right will cost you 10 times more than transportation costs. You’ll fail to retain a customer, gain a bad review, and lose 20-50 potential buyers due to word-of-mouth.
Update Order Status Regularly
Keeping your customers informed about the status of orders is essential for building trust and maintaining a positive relationship. Provide regular updates via email or SMS from when the order is placed until it is delivered. Inform your customers about any delays or issues as soon as possible. Transparency is key.
By providing regular updates, you show that you value your customer’s time and business. It also helps to manage expectations and reduce the number of inquiries to your customer service. Keeping your customers in the loop about order status will lead to a better shopping experience.
Try TrackMage for free (no credit card needed) and experience an instantaneous sales boost. You’ll also notice a significant decrease in churn rates in the long run. TrackMage allows you to suggest complementary products in your order tracking notification emails, further increasing sales and profit. There are several more features to increase sales and retention rates, but you’ll see for yourself during the 14-day trial period.
Give Exclusive Offers
Everyone loves a good deal. Offering exclusive offers and discounts to your existing customers is a great way to show appreciation and encourage repeat business. Send personalized offers via email, SMS, or through your mobile app. Make your customers feel special by giving them early access to sales, special discounts, or a surprise gift.
Adding a time-sensitive element creates urgency and shows appreciation to potential buyers, leading to increased orders.
A little gesture of appreciation goes a long way. It’s a small investment that pays big dividends.
Develop VIP Membership Programs
VIP membership programs are an excellent way to reward your most loyal customers. Offer different tiers of membership, each with its own set of benefits. The more a customer spends, the higher the tier they reach, and the better the rewards. Benefits include:
- free shipping,
- early access to sales,
- exclusive discounts,
- personalized gifts.
Offering a VIP membership program incentivizes your customers to spend more and shop more frequently. It also creates a sense of exclusivity and makes your customers feel special and valued. A well-designed VIP membership program increases customer loyalty and retention rates.
Implement Subscription-based Model
A subscription-based model is a sales method of offering products on a subscription basis, where customers receive regular deliveries at a discounted price. It could be:
- monthly delivery of your best-selling products,
- quarterly box of new releases,
- customized selection based on customer preferences.
By offering a subscription-based model, you provide convenience and value to your customers. Buyers don’t have to remember to place an order, and they get a discount on the products they love. It also creates a steady revenue stream for your business and helps build a loyal customer base.
Usually, a customer chooses the money limit, product types, and delivery dates six months or a year in advance.
Create Referral Programs
Referral programs are a win-win for both your business and your customers. Offer incentives for your existing customers if they refer friends and family to your eCommerce store. The incentives could be a discount on the next purchase, a gift, or money generated on their accounts. The money option will not be paid, but the next purchase will be discounted for the generated amount.
The referral program must be easy to understand and offer attractive rewards. It helps you acquire new customers at a lower cost and encourages your existing customers to spread the word about your business. Remember, word-of-mouth is one of the most powerful forms of marketing.
Statistics show that each dollar you do not earn due to discounts and gifts (consider it an investment) will bring you 1.3-1.6 dollars from newly acquired buyers.
Additionally, the more reviews you acquire, the higher your eCommerce website will rank, thus bringing you more sales.
Finally, new buyers will bring more customers, reviews, and shares.
Promote User-generated Content
User-generated content is everything potential buyers post and share on social media, review platforms, and eCommerce-related websites.
Encourage your customers to write and share content about your products. It could be photos, videos, reviews, and posts.
Offer incentives, such as:
- chance to win a prize,
- discount on the next purchase,
- VIP membership,
- feature their content on your website,
- invitation to popular events,
- sharing on your social media channels.
User-generated content provides social proof and helps build a sense of community around your brand. It shows that you value your customer’s opinions and experiences. Additionally, user-generated content provides fresh and authentic posts for your marketing efforts.
Implement Price-Match Guarantee
A price-match guarantee means you advertise the lowest online price compared to your competitors. To implement this method, you should clearly state on your website that if a customer finds a cheaper product and provides evidence, you will lower your price to match or beat it.
Offering a price-match guarantee can be a powerful way to retain customers and build trust. It shows you are confident in your pricing and value your customer’s business.
A price match guarantee removes price as one of the main purchasing barriers. It also helps establish your brand as a trustworthy and value-driven retailer.
The downside of this strategy is a potential price war. It might be exhausting and detrimental to your profit. If you decide to implement the price-match guarantee strategy, perform detailed competitive analysis and profit calculations once a week.
10 Highly Effective eCommerce Customer Retention Strategies
Check out 10 highly effective e-commerce customer retention strategies that will help you increase customer loyalty and satisfaction, generating repeat purchases and strong customer retention. Additionally, satisfied customers are more likely to recommend your brand to others, leading to new customer acquisition. The effective retention strategies we’ll list below will lead to sustainable growth and a stronger brand reputation for your online business.
Offer Product Recommendations
To implement a personalized product recommendation method, you must analyze a customer’s browsing history, preferences, and past purchases to suggest relevant products. This eCommerce customer retention strategy simplifies the shopping process and shows customers that their needs are understood and valued, ultimately building trust and loyalty.
To perform and speed up the big data analysis, use algorithms or recommendation engines that parse customer data to suggest products most likely to be of interest.
A personalized product recommendation strategy’s benefits:
- increased trust and loyalty,
- generated additional purchases,
- enlarged average order value
- created a personalized shopping experience,
- made the customers feel valued,
- improved the probability of repeat purchases.
Furthermore, it provides an opportunity to cross-sell or upsell products, thereby increasing the overall order value.
Utilize Targeted Email Marketing
Targeted email marketing is a method of sending personalized emails to specific customer segments based on purchase history, browsing behavior, and preferences.
This eCommerce customer retention strategy is effective because it delivers timely and relevant information to existing shoppers, promoting new products.
To implement targeted email marketing:
- Define Your Goals: Decide what you want to achieve with your email marketing automation. It could be increasing sales, nurturing leads, increasing engagement, or something else.
- Segment Your Email List: Divide your email list into smaller segments based on criteria like purchase history, engagement level, or demographic information.
- Select an Email Marketing Automation Tool: Choose a tool to automate your email marketing campaigns. Some popular ones are Mailchimp, HubSpot, and ActiveCampaign.
- Create Your Email Content: Develop the content for your emails. Email texts should be relevant and valuable to the audience segment. Consider using eCommerce cross-sell and upsell email templates crafted for high conversions.
- Set Up Automated Triggers: Define the triggers that will send your emails. For example, you can send an email when a customer makes a purchase, abandons a cart, or clicks on a link in a previous email.
- Test Your Campaigns: Before fully automating your emails, test them to ensure everything works as expected. Most email marketing tools allow you to send test emails to yourself or a small segment of your list.
- Monitor and Optimize: After your campaigns are live, monitor their performance. Look at metrics like open rates, click-through rates, and conversion rates. Use this data to optimize your future campaigns.
The targeted email marketing strategy will increase engagement, repeat purchases, and customer retention rates.
Run Re-Engagement Campaigns
Re-engagement campaigns involve sending special offers, updates, online surveys, or feedback requests to customers who have been inactive for a certain period. It is effective as it shows the customers they are valued, and the brand is trying to win back their loyalty.
Steps to run re-engagement campaigns:
- Identify the inactive customers
- Craft personalized messages to show them the benefits they are missing (For example, if a customer has not purchased in the past six months, send them a special offer or a discount to entice them to shop again)
- Ask for feedback to understand the reasons for their inactivity
- Invest time to analyze results and conversions
- Make the necessary improvements.
Statistical data and case studies
- Adobe noticed that a segment of their customers stopped engaging with their emails. They ran a re-engagement campaign targeting inactive users with a series of emails. The first email was a ‘We Miss You’ email, the second offered a discount, and the third was a final reminder of the discount. The result was a 15% open rate and a 2.5% click-through rate, which might seem low, but it was a significant improvement compared to the 0.5% click-through rate from the regular emails sent to this segment.
- Starbucks ran a re-engagement campaign for their rewards program members who had not purchased in the last six months. They sent an email offering a double-star reward for their next purchase. This campaign resulted in a 25% increase in customer visits from the targeted segment and a 15% increase in the average transaction value compared to the previous six months.
- ASOS ran a re-engagement campaign targeting customers who had not made a purchase or interacted with their emails in the last year. They sent an email with the subject line ‘You’ve Been Missed,’ offering a 20% discount on their next purchase. The campaign resulted in a 24% open rate, a 7% click-through rate, and a 3% conversion rate, significantly improving compared to the 1% conversion rate from their regular emails to this segment.
Statistical data and case studies prove that re-engagement campaigns successfully revive inactive customers. Personalized offers and incentives increase open, click-through, and conversion rates. Therefore, they are one of the most powerful eCommerce customer retention strategies.
Provide Exceptional Customer Service
Providing exceptional customer service involves quickly responding to inquiries and complaints, being empathetic, and offering multiple communication channels.
Positive customer service experiences build trust and loyalty, encouraging customers to return.
To build exceptional customer service:
- Train the team to respond quickly and empathetically to customer inquiries and complaints
- Provide multiple communication channels, such as phone, email, and live chat, so customers can choose the one they prefer
- Proactively address common concerns by providing detailed information on the website or sending follow-up emails after a purchase
- Pay special attention to customers’ complaints
- Group complaints using the Pareto method to understand and resolve common customer complaints
- Address the problems’ causes to eliminate complaints.
Check out our article: 15 Best Practices for Effective eCommerce Customer Service.
Exceptional customer service is a prerequisite for long-lasting relationships with existing and potential buyers. Remember, satisfied customers are more likely to become repeat customers and recommend the brand to others.
Enhance Social Media Engagement
Enhancing social media engagement involves
- responding promptly to comments and messages,
- sharing user-generated content,
- creating interactive content that encourages customer interaction.
Your engagement with shoppers on social media creates a sense of community around your brand and keeps the buyers informed and engaged.
- Create a social media plan that includes regular updates, interactive content, and prompt responses to comments and messages.
- Share user-generated content, such as photos and reviews shared by customers, to show appreciation and build trust.
- Design interactive content, such as polls, quizzes, and contests, to encourage customer interaction and engagement.
A strong social media presence helps keep the brand top-of-mind, generating repeat purchases and recommendations of your brand to friends, family, and social network connections.
Develop Interactive Content
Interactive content engages customers with quizzes, polls, videos, and games. Additionally, it helps you better understand shoppers’ preferences. Empowered with knowledge about your buyers, you’ll be able to increase brand recall and loyalty.
Implementing engaging content requires creating content that resonates with the audience (tools like Outgrow or Apester are great for this eCommerce retention strategy).
DemandGen reports reveal that interactive content generates up to 50% more conversions compared to passive content. Regularly updating the content and ensuring it is accessible on all devices will also contribute to the strategy success.
Encourage Mobile App Usage
A well-designed app providing a seamless shopping experience will significantly increase profits. Regularly updating the app and promptly addressing any technical issues will ensure customers have a positive experience. Additionally, actively promoting the app and offering exclusive incentives for app users will encourage more customers to download and use the app.
Personalized shopping experiences can be offered via user-friendly mobile apps. Implementing push notifications for special offers, sales, or new products and promoting special discounts or rewards for app users will lead to higher retention rates, increased sales, and customer loyalty.
Criteo reports show that mobile apps generate three times higher conversion rates than websites.
To add a mobile app to your online business, hire an agency or a freelancer. For $500-$1000, you’ll get an exceptionally powerful customer retention tool that will pay back invested money in less than a year.
Conduct Regular Surveys
Regularly asking for feedback on products, services, and the overall shopping experience using tools like SurveyMonkey or Google Forms:
- shows customers their opinion matters,
- arms you with invaluable data,
- empowers your brand loyalty
- improves customer retention rate
- generate additional sales and profit.
A Microsoft study indicates that 77% of customers view brands more favorably if they seek and act on feedback.
Steps to conduct successful surveys:
- Design the survey to capture all the necessary information.
- Make it easy to complete -questions should be clear and straightforward. Collect the responses.
- Analyze the results.
- Take appropriate actions based on the feedback received.
After the analysis phase, do not neglect one more customer retention trick: inform the survey-takers about the results and thank them for being part of something big.
Informing customers about your changes based on feedback will show them you are listening and value their opinions. They will enjoy their contributor status and become loyal brand advocates and repeat customers.
To better grasp this eCommerce customer retention strategy, spend 7 minutes reading the article “Ecommerce Survey Success: Ultimate Guide To Create Effective Surveys“.
Offer an Omnichannel Shopping Experience
Providing a seamless shopping experience across all channels (online, mobile, and in-store) is an omnichannel experience strategy. Integrating all sales and communication channels ensures a consistent and convenient shopping experience, increasing customer retention and satisfaction.
A 2017 Harvard Business Review study about omnichannel strategy found that customers using multiple channels had a 30% higher lifetime value than those using a single one. Therefore, offering an omnichannel shopping experience is one of the most effective eCommerce customer retention strategies.
Steps to implement an omnichannel strategy:
- Integrate all sales and communication channels:
- Ensure that the customer experience is consistent across all platforms; Keep track of the inventory and orders in one place connected to all channels;
- Provide real-time updates across all channels;
- Regularly review and update the channels for 100% functionality;
- Train your staff to provide consistent service across all channels.
To successfully implement this eCommerce customer retention strategy, check out the article “5 Ways To Improve Omnichannel Customer Experience“.
Share Educational Content
Creating and sharing educational content, like blog posts, ebooks, webinars, and tutorial videos, will:
- position your brand as an expert,
- drive organic traffic,
- increase customer retention and loyalty.
The 2021 HubSpot report on blogging displays that companies that post 11+ times per month had almost three times more traffic than those blogging 0-1 times per month.
Zappos, an online shoe and clothing retailer, is renowned for its exceptional customer service and customer-centric culture. They have an extensive collection of educational videos and tutorials on their website and YouTube channel, which include product reviews, how-tos, and behind-the-scenes looks at their operations.
According to a 2007. case study by MarketingSherpa, Zappos had between 6% and 30% more sales for products that featured a demonstration video. Moreover, repeat customers are a significant portion of Zappos’ customer base, accounting for 75% of their annual sales.
Creating high-quality, relevant content that addresses the needs and concerns of the target audience generates multiple benefits for your brand and customer retention.
Dictionary: What are Customer Retention Strategy, Churn Rate and Customer Lifetime Value
Ecommerce customer retention strategy refers to a set of tactics and actions implemented by online businesses to encourage repeat purchases and ongoing engagement from existing customers. Strategies aim to maximize customer loyalty, reduce churn rate*, and increase lifetime buyer value**.
Customer churn is the loss of existing customers over a certain period of time. It occurs when customers stop buying or engaging with an online store. Various reasons cause customer churn, such as dissatisfaction with the products or services, better offers from competitors, or a lack of engagement from the business. Customer churn is a critical metric for eCommerce businesses, as it directly impacts revenue, customer lifetime value, and the company’s overall health.
*Churn rate is the percentage of customers who stop purchasing from an online store over a specific time period. It is calculated by dividing the number of customers lost during a certain timeframe by the total number of active customers at the start of that period. A high churn rate indicates a company is losing many customers, which harms revenue and growth.
**Customer lifetime value (CLV) is a prediction of the net profit attributed to the entire future relationship with a customer. It represents the total amount of money a customer is expected to spend at your online store over time. CLV helps determine how much eCommerce businesses should invest in acquiring and retaining customers.
E-commerce customer retention is crucial for the sustainability and growth of your business. It is more cost-effective to retain existing customers than to acquire new ones.
Without incorporating retention strategies into your global business plan, you risk losing customers to competitors who offer a more personalized and supportive experience.
Moreover, neglecting customer retention leads to decreased sales, a damaged reputation, and increased marketing costs to attract new customers.
Do not try to implement all the listed eCommerce customer retention strategies simultaneously. Choose one or two, and when they start generating sales, proceed to the other two. Implementing some of the above strategies will significantly enhance customer loyalty and encourage repeat purchases.