Billsby
Login
no img

Retention Rate is one of the key metrics that help businesses identify their success. It brings in a steady stream of revenue for businesses without having to put in a lot of resources or make hefty expenditures. Today, we will explore a few strategies that can help you retain your customers for longer periods and consequently add value to your revenue.

What is the customer retention rate?

Add a heading (1500 × 600 px) (16).png Retaining pre-existing customers is one of the essential tasks for any subscription business. They must devise strategies to ensure that their customers have a high lifetime value and are retained for as long as possible.

For eCommerce, customer retention is the practice of extracting additional value from their customers by increasing their repeat consumption rate. The goal of eCommerce customer retention practices is to ensure that the customer continues to make purchases with your business and are satisfied with the services.

Customer retention rate is the rate at which the customers tend to stay with your business over a given period. A higher customer retention rate means that your customers tend to stay for a longer period with your business, and most of your customers come back for more.

It is an essential metric for eCommerce brands as there is a lot of competition in the market. Customers have so many choices, and thus, retaining them for a long time is quite difficult. Whenever they feel uneasy with your service, they can jump to the competitor instantly.

Therefore, you must ensure that your services are of the highest value to uphold a good eCommerce customer retention rate.

Calculating The Customer Retention Rate In eCommerce

Add a heading (1500 × 600 px) (15).png The number of customers retained can be calculated by subtracting the new acquisitions in the period from the total number of customers. The formula for the eCommerce customer retention rate is-

Total Customers

Add a heading (1500 × 600 px) (14).png New Customers Acquired / Customers at the start of the period.

You can also use the metric churn rate to understand the retention rate. For e-commerce businesses, the average customer retention rate lies somewhere around 30%.

Importance of eCommerce Customer Retention

Mentioned below are a few points indicating the importance of customer retention for a subscription business-

● Increased ROI

Add a heading (1500 × 600 px) (13).png Businesses often spend a lot of their cost on acquiring new customers. However, it is cheaper and more cost effective to convert existing customers and retain them.

It helps to generate a lot of revenue without having to spend more on the acquisition. Therefore, the return on investment in eCommerce customer retention is higher than other marketing efforts.

● Increases Customer Loyalty

Add a heading (1500 × 600 px) (14).png Customers who tend to do business with you for a longer period are generally loyal customers. They come back for your services because they are satisfied. This helps you build a loyal customer base who are satisfied with your product and services.

● Acquire New Customers

Add a heading (1500 × 600 px) (12).png When your brand has a pre-existing customer base, they will refer it to others. Also, people would like to indulge in your services knowing that you leave your customers satisfied.

With higher eCommerce retention rates, you can layer potential buyers into doing business with you, and they will be thrilled to experience your services.

● Reduced CAC

Add a heading (1500 × 600 px) (11).png As we have read above, if businesses spend more time and effort on customer retention, they reduce their customer acquisition cost.

They will gain a lot of revenue without having to make unnecessary expenditures on customer acquisition. This will help you reduce customer acquisition costs.

● A Higher Customer Lifetime Value

Add a heading (1500 × 600 px) (10).png With the increase in the number of returning customers, the lifetime value of the customers also increases. Customer lifetime value is the amount you generate from a single customer over their lifetime of doing business with you. If you retain your customers for a longer period, you can automatically get more revenue from them.

● Word-of-mouth Marketing

Add a heading (1500 × 600 px) (9).png Retained customers play a major role in word-of-mouth marketing and promotion of your brand. It is a great effective marketing strategy that can help you acquire more customers without having to spend a lot.

● Focus on Growth

Add a heading (1500 × 600 px) (8).png If a business focuses too heavily on activities related to marketing and the acquisition of new customers, they often miss out on the more important tasks, such as focusing on the other areas of the business that require growth.

Also, they cannot improve their products and services to the best levels as their focus lies on customer acquisition. Businesses need customers to bring in revenue, and those are unable to dedicate the necessary time and resources towards the growth of the business or product.

However, if you have a good eCommerce customer retention strategy in place, you will never worry about acquiring new customers or retaining them, or having a good flow of revenue, and thus you can focus on improving your business processes. Strategies to improve customer retention for eCommerce brands

Let us now look at a few strategies that can help improve customer retention for eCommerce brands:

● Enhance your onboarding experience

Add a heading (1500 × 600 px) (7).png

The onboarding experience of a customer is the first touch point they have with your brand. It plays a significant role in creating the brand image of your product or service in the customers' minds, and thus it should be outstanding. Ensure that your onboarding process makes a memorable first impression on your customer.

If customers face initial onboarding issues such as mishandling information, a point of contact not being fixed, or poor customer service, it makes them feel that your service is just not worth it.

However, a good onboarding process that includes email addresses, follow-up messages, celebratory messages, etc., can help you impress new clients and retain them for extended periods.

● Offer Customized Experiences

Add a heading (1500 × 600 px) (6).png

The needs and requirements of every customer are different. They come to your brand looking for something entirely different. Therefore, you do not want to provide them with the exact solutions for their varying needs.

Consequently, you must offer a personalized customer experience to all your customers. This helps you create amazing customer relationships, which eventually increase the customer retention rate. In addition, your personalized solutions can help you solve their problems.

● Focus on Building Trust

Add a heading (1500 × 600 px) (5).png To retain your customer for longer periods, it is important to build trust with them. Trust takes a lot of time to build and is often built after the customer starts engaging with the brand.

A business can build trust over the customers by doing what they say and following through on its brand promises.

● Set up a Sound System of Customer Feedback

Add a heading (1500 × 600 px) (4).png Along with engaging with your customers now and then, it is essential that you create a unique feedback system for your customers. You must proactively ask for their feedback.

You can ask them to participate in user testing, make phone calls, rate your services, or ask for product reviews. After taking the feedback, you must analyze the feedback and identify the areas that need improvement. Accordingly, you must work to enhance the user experience.

● Effective email marketing

Add a heading (1500 × 600 px) (3).png You must constantly be in touch with your customers through email marketing. For example, you can send them welcome emails after their first purchase. Apart from this, you can conduct cross-selling and up-selling through emails, intimate them after they abandon their card, get offers or discounts, and wish them on special occasions such as birthdays. You can also send valuable content to your users through email and make them a part of your newsletter, which should be engaging.

● Take up social media and content marketing

Add a heading (1500 × 600 px) (2).png One of the most remarkable ways to keep customers engaged today is through social media channels. Adding great content on social media platforms ensures that your customers are engaged with your services and your product.

You can share relevant content which your customers can be interested in. You should add beautiful images and videos of your products and exclusive discounts and offers for your followers on social media platforms.

You can also engage with your customers through messaging or holding contests on special occasions. Apart from this, you can also create a blog for your eCommerce website to add informational and promotional posts to help your customers regarding your industry, your product, and its usage. You can also create guides, forums, newsletters, etc., for their information.

● Provide fantastic customer service

Add a heading (1500 × 600 px) (1).png The customer service associates of your business are probably the only point of contact for your customers, so they turn to them whenever they need help or assistance. Therefore, it is quintessential for a business to offer world-class customer service to the customers.

The associates should be polite and helpful, take upon the customers' problems just like their own, and provide them with efficient solutions. Also, you should open multiple channels from which customers can contact customer service, such as phone calls, messaging, chat, email, etc.

How To Build an Excellent Customer Retention Strategy

Add a heading (1500 × 600 px).pngWe have read about some tips you can use to provide outstanding experiences to your customers to help you improve your retention rate. Let us now read about some of the most rewarding eCommerce customer retention strategies.

1.Use customer service tools to ensure that your customers do not end up waiting to talk to a human for a solution. Instead, they get a solution instantly through technology and automated bots.

2.Not fail to apologize whenever you make a mistake. Sometimes, a simple and straightforward apology can help retain a customer for a long time.

3.Have a mission and a vision for your brand. With this, the customers can connect with your brand in a better way.

4.Provide as much convenience as possible to your customers. For example, offer them multiple payment options for billing, making your products accessible to them as they desire, and other such conveniences.

5. Offer personalized recommendations to customers based on the data you’ve acquired from their previous purchases. If customers get exactly what they want through your recommendations, they will purchase it and continue doing business with you for a long time.

6.Constantly engage with your customers through multiple sources. Listen and connect with your customers, understand the problems they face, and make improvements based on their feedback.

7.Set yourself apart from your competitors by providing your customers with something different. If you want your customers to be retained, you must ensure that you give them something that your competitors cannot.

8. Provide exemplary experience and special treatment to your customers time and again. Customers never forget how you treated them, and that good treatment means higher eCommerce retention rate.

9.Connect with your customers through multiple social media platforms. The internet is quite creative today, and your brand must know how to use social media platforms best to engage with your customers.

10.Educate your customers with things regarding your brand as well as your industry. If the customers find your services more informative than the others, they tend to stay with you for considerably longer.

11.Exceed your customer's expectations by surprising and delighting them. Offer them additional gifts or benefits which can help them be more engaged in your services.

12. Do not forget to thank your customers for every purchase they make.

13.In case you offer a free trial to your customers, or their monthly or yearly subscription is about to end, you must engage your customers to ensure they are lured into renewing their membership and not explore what your competitors have to offer.

14.Create a community or a forum around your product or services where all your customers can engage with each other. Having a community helps you build trust with your customers and gives them a place to get essential knowledge.

15.Make your product or service an inevitable part of the customer's lifestyle. When your customer is hooked on your service, they will find it difficult to detach from it, and thus, they will continue doing business with you for extended periods.

16.Enhance and upgrade your product or service. Apart from your marketing and customer experience services, you must also focus on improving your product and service so that the customers find it amazingly satisfying.

Final Words

You might have understood the importance of creating a masterful eCommerce retention rate strategy for your business, and the growth it drives for your business. Therefore, you must start working on creating a strategy for your business and customers if you haven’t already. From the key points mentioned above, you can devise the perfect game plan to ensure your customers keep doing business with you for longer periods, and you can thank us later!

Get started in less than 2 hours
Inspiration right to your mailbox