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7 Effective eCommerce Customer Retention Strategies

20 Oct
2022
7 Effective eCommerce Customer Retention Strategies

Think about a company that goes above and beyond for its customers. Who comes to mind first?

If it's brands like Nike, Apple, Amazon, and Walmart, there's a reason why—they all have a (very) loyal customer base. 

According to a 2021 Brand Keys study of over 53,000 customers, companies like Amazon and Apple have loyal consumers thanks to successful customer retention strategies. It's the simple stuff that they get right: meeting expectations, building relationships, and running effective marketing campaigns.

The good news is that you can build a loyal customer base with the right tools and strategies. In this article, we will teach you how.  

Let's dive in 👇

What are the benefits of eCommerce customer Retention? 

You don't need us to tell you that customers are the backbone of your business. 

But what may surprise you is that keeping customers around isn't just good for business; it's great for your bottom line. Statistics show that retained customers spend more and purchase products more. In one example from a Bain & Company study, apparel store customers spent 67% more after shopping with a brand for over 31 months compared to the first six months. 

Then there's the cost of acquiring customers 💰

Shopify research shows the cost of acquiring new customers varies depending on your industry, but it can reach over $500 a year.  

shopify graph of avg customer acquisition cost
Image source

A solid customer retention strategy can help you offset acquisition costs and increase profits. From rewarding loyal customers to optimizing marketing campaigns, there are lots of ways you can keep customers happy so they spend more at the checkout. 

Wait—how do you measure customer retention rate? 🤔

The benchmark for eCommerce retention sits at just under 30%. 

It's simple to calculate how many of your customers are churning:

# of customers over a month/quarter/year 

– 

# of new customers acquired during the same timeframe

Then, divide this number by # of customers at the start of the timeframe. 

Let's say your store had 370 customers at the end of the month, and 150 of them are brand new. Before the month started, you had 410 customers. Use the above calculation to figure out your retention rate: 

370 – 150 / 410 x 100 = 53.6% retention rate 

Now that's a retention rate worth aiming for! 🥳 

7 eCommerce customer retention strategies to use in 2022

There are many different ways to retain customers. Some simply want good service and communication, even when your products cost a little more. Others want a relationship with your brand and perks for shopping in your store. 

Here are 7 strategies to keep your customers around 👇

1. Ramp up promotional campaigns to boost purchases

Target your existing subscriber list by offering exclusive offers and discount codes. 

Believe it or not, your customer base loves hearing from you. According to Statista, 49% of customers like it when promotional emails from their favorite brands land in their inboxes weekly. 82% of shoppers will use a coupon or reward within a week, which can add a healthy boost to your bottom line. 

We love this promotional campaign by The Giving Keys: 

promotional email example

It's got everything to make its customers feel warm and fuzzy:

  • A 10% off coupon to get their customers to the checkout
  • A chance for them to pay it forward, knowing a portion of their purchase will be donated to charity
  • A link to the brand's story so they can learn more 

This promotional campaign connects with customers using emotion and a coupon code. What's not to love?

//[inject:ad-demo]

2. Reward loyal customers (so they reward you back)

Introduce a customer loyalty program that rewards customers for repeat purchases or referring your brand to a friend. 

We've already discussed repeat customers spending more money on products than new customers. Reward them for this with exclusive discounts, free shipping, or even a surprise gift with their next order. 

This won't just make your customers happy. It's also good publicity because they'll talk about your brand with family and friends. Just look at the H&M Club loyalty program: 

eCommerce customer loyalty program example

Customers are rewarded with points for every purchase they make. They can then exchange them for discounts on items, gift cards with partner stores, and even exclusive hotel stays. The club also has quirky ways for customers to earn points, like recycling garments and bringing their own bags into the store to encourage more sustainable choices. 

3. Nurture first-time customers into long-term relationships

Nurture every customer that comes your way. 

First impressions are big. Interacting with customers on social media channels, live chat, or over email helps build a meaningful relationship with your brand and shows them you really care. eCommerce vendors can do this by: 

  • Liking and replying to comments from customers
  • Sharing links or recommendations for products
  • Offering exclusive discounts and competitions to social media followers
  • Replying to messages and emails quickly and answering any questions

These small things can go a long way to building relationships with your customers. You can even leverage user-generated content by reposting customer images on your Instagram and TikTok to increase engagement. Hopefully, you'll get some extra followers along the way!

4. Create personalized and valuable content

Create valuable content that customers genuinely want to read or see. 

Whether posting on social media channels or creating newsletters, you should add value every time you send out content to customers. Emails triggered by personalized campaigns generate 75% more revenue than an email blasted to an entire list. 

This is usually down to how well your list is segmented: 

  • Status. If they're a repeat customer or are yet to buy anything (those virtual window shoppers!)
  • Opt-in source. Did they hand over their email for a discount coupon or respond to a product launch? Every customer has different reasons why they interact with your brand; segment them accordingly.
  • Buying behavior. Some customers have a high LTV, while others will only buy stuff from you at Christmas. Send them content that matches their past purchasing behavior.

With a segmented list, you can offer customers a truly personalized experience with your brand. Automatically send a welcome email to first-time buyers or a discount code to repeat customers who've abandoned their cart to entice them back to your store. 

Whatever communication tactic you use, make sure it's personalized. 

5. Optimize digital marketing campaigns across chosen channels

Implement a strategy focusing on retaining existing customers rather than generating new leads. 

A successful digital marketing campaign covers every corner of your online presence:

  • Website. A clean interface, exclusive discounts, and pop-ups to increase customer spends
  • Checkout. A user-friendly checkout with integrated payment options to delight customers
  • UX. 79% of customers purchase products on their smartphones, so make sure your site is mobile-friendly with responsive designs
  • Forms. Simple forms for customers to complete their transactions. Simple logins or guest checkout can cut friction in the buying process

And then there's the big one—social media channels. 

Thanks to the rollout of features like Instagram Checkout, TikTok Shopping, and Facebook Shops, brands can now sell products directly from social media feeds. For example, brands with integrated Instagram Checkouts can add shopping tags, collections, and even a separate shop directly tied to online inventory. 

If a customer sees an item in a post they want to buy, all they have to do is click on it and complete the purchase on Instagram. Here's an example from @colourpopcosmetics' Insta feed:  

example of social selling on instagram

The customer will tap the product on the image to reveal a buying link. They're then redirected to Instagram's online checkout, where they complete the purchase using a payment card stored on their phone. 

The transaction takes under a minute and gives customers a quick and easy experience with a brand. 

6. Prioritize support and service to win over customers

Build a dedicated customer service team that lives and breathes your brand's mission. 

Customers expect to be kept in the loop when they buy something from you, so prioritize communication and support. Look at how Boohoo does this: 

order confirmation email example featuring support
  • It mentions the customer by name and lets them know their order is on its way
  • It gives a timeframe for when it'll be delivered by and confirms the customer's address
  • A tracking link is included so the customer can track the order

The email also includes a breakdown of the items in the order, and a simple FAQ helps customers answer any questions.

customer support featured in footer of email
Boohoo includes FAQs in every order confirmation email. 

But even with an email like this, brands should be realistic—things can (and will) go wrong during the order fulfillment process. 

Products get lost, shipments can be delayed, and packaging can sometimes get damaged by a courier. And if an item doesn't fit or the customer changes their mind, your return and refund policy can impact their decision to shop with your brand again. 

How well your customer service team handles these issues will either retain a customer or lose them forever. Create Standard Operating Procedures (SOPs), so your team responds appropriately if something goes wrong to keep your customers happy. 

7. Stay in touch with SMS marketing 

SMS marketing is wildly overlooked, but it has the highest open rates of any marketing channel.

Stats show SMS open rates sitting as high as 98%, and 90% of people open a text within 3 minutes after it lands in their inbox. Prioritize your VIP customers and build an SMS marketing list to send them exclusive deals and first dibs on new product launches. Use insights from past purchases and buying behavior to send personalized product recommendations they'll love.

When Reebok launched a collaboration with Cardi B in 2021, loyal customers were given the heads up over SMS: 

reebok sms marketing example

This SMS has everything: 

  • An image featuring the product to grab the customer's attention
  • Information about the launch and when the shoes will be available to buy
  • A hyperlink that takes the customer straight to the landing page that will open once the launch drops

The campaign is an effective way to make sure every customer on your SMS list knows about a new product or sale. Emails sometimes get buried, and social media feeds get scrolled past. But if an SMS lands in your customer's phone, there's a really good chance they'll read it. 

Pro-tip: Sendlane takes the hassle out of eCommerce SMS campaigns so vendors can send targeted messages to their customers. Brands can build custom campaigns inside Sendlane's builder and leverage multivariable segments to personalize text and images. You can even add GIFS and emojis to make your messages more engaging!

sedlane SMS/MMS marketing in app

//[inject:ad-sms-messaging]

Keep your customers happy, and they'll keep coming back

It's easy to get customers. It's harder to keep them and turn them into fans of your brand. 

Successful eCommerce brands take care of their customers. Customers are targeted with products they love, and they're nurtured post-purchase to ensure they're happy. Small touches like optimized checkouts and fulfillment tracking go a long way to keep your customers satisfied. 

Build customer relationships and invest in retention strategies. Because once a customer buys from you and trusts your brand—they stay with you. 

If you’re ready to give your customers the experience they deserve, take Sendlane for a spin!

Start your free trial and access all our email & SMS marketing automation features for 14 days. 

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