3 Effective Customer Retention Tips for E-commerce Businesses

Acquiring new customers is important but not easy for e-commerce businesses. What’s even more important is retaining the existing customers. 

Customer retention is important because – 

• A 5% increase in customer retention rate can lift profits by 25%-95% profits. 
• It’s more expensive (7X) to acquire a new customer than retain an existing one.

This article walks you through three effective customer retention strategies that you can incorporate into your eCommerce marketing strategy. You can start implementing them right away in your online store. Let’s find out more about them. 

1. Work on Improving Customer Satisfaction

Customer satisfaction isn’t just about giving your customers the products they need. You can satisfy them in three ways – 

Excellent customer service 

Customer service is equally important as the product itself. Bad customer service can result in a loss of 71% of your customers. 

You need to respond to customer’s support tickets and resolve them ASAP. Train your team in the best possible way to achieve this.

Appreciate your customers 

To keep customers satisfied, excellent customer service is not enough. You need to show them your appreciation. When customers feel a sense of appreciation, they would be more loyal to your brand. 

‘Thank you!’ The first step in appreciating your customers is to say those two magical words. You can take this a step further with some creative ideas, such as: 

• Send a well-designed thank you note in the mail. 
• Insert a free gift in the package like product samples. 
• Offer a post-purchase discount. Give the customers a discount code that can be used on their next purchase.
• Run a customer spotlight campaign to make your customers feel special and noticed.

Improve customer experience

If you want customers to come and shop with you frequently, you should make the shopping process frictionless. 

Create a one-step or one-page checkout and the checkout process should take less than 1 minute to complete. Amazon has reduced this process to just a single click. 

A good UI/UX is the second thing that matters in customer experience. Your experience with customers depends on the way you design your online store. A good store design must tell customers everything they need to know without causing frustration or inconvenience. For example, visitors should be able to skim the navigation bar without thinking much.

• Establish a long-lasting relationship with customers 

Once you’re confident with your customer support quality, it’s time to move to advanced tips. We are going to talk about customer loyalty programs. If implemented correctly, they can boost your customer retention rate significantly. 

Building a fruitful loyalty program 

Here are the reasons why a loyalty program attracts customers so well: 

• You can leverage rewards to motivate customers to shop more. 
• Loyalty programs allow you to track and manage thousands of customers’ accounts at a time. 
• The increase in rewards and benefits over time makes customers feel attached to your loyalty program. 

Here are two things to keep in mind when you start a loyalty program: 

Indicate the loyalty level 

Offer a fixed number of points for a certain amount of dollars spent. You can also reward customers for other actions like signing up, social sharing, etc. to boost engagement. Customers can trade these points for discounts or other incentives. By tracking the number of points in the customers’ accounts, you can measure their “loyalty level.” 

If you visit H&M, their loyalty point program lets you earn 1 point for each dollar spent. It also has a mobile app to help customers keep track of all the points and exclusive offers they have. 

Promote your loyalty program 

Marketing is very important for loyalty programs. No matter how big your rewards are, customers may easily forget it. 

Some of the most effective ways you can promote your loyalty program are: 

• Email announcement: Send a newsletter and inform your existing customers about the loyalty program. 
• Show how many loyalty points customers can earn for a variety of products. This tactic not only motivates them to make a purchase but also reminds them about your loyalty program. 
• Promote the program on your home page as it will give you the highest exposure. 
• Use social media channels: You can reach your brand’s existing followers without any difficulties and tell them about the loyalty program.

This list can go on and on. You should experiment with different strategies and follow whichever suits you best.

Read also about 7 key steps to building an effective business website

• Build a strong brand image

Customers should always remember you as a brand and not a random online store. There’s no dearth of such online stores on the World Wide Web.

You can build a brand image by positioning your brand as a trusted knowledge center. If you’re an expert in your field, help customers learn something new often. They will look up to you as a reliable resource when they need help. Ultimately, they also start trusting the product and service you provide.

A good example is the Nike Running Club mobile application. This app helps users find many useful guides from experts or athletes. They can also create a personalized training program for themselves.

Summing it up

There’s no shortcut to achieving higher customer retention rates. The tips you just read are the tip of the iceberg. You always need to be on the move and stay updated about the latest customer retention strategies. Good luck!