Acquiring customers is only the first step towards thriving in ecommerce.

The true test of a business's longevity lies in its ability to retain those customers. 

Customer retention can dramatically affect a company's profitability so much so that a study by Bain & Company found that a mere 5% increase in customer retention yields a 25% to 95% boost in profits. 

This  highlights the necessity of not just drawing in new customers, but fostering loyalty and continued engagement among existing ones.

In this guide, we will share 9 proven customer retention strategies to help you build and retain your audience. 

Let's get started on transforming your customer retention approach and ensuring your customers keep coming back for more.

Understanding Customer Retention in Ecommerce

Customer retention involves tactics businesses use to maintain long-term relationships with their clients. 

For online retailers, this means fostering an atmosphere that promotes recurring sales and brand loyalty. It encompasses customer satisfaction, engagement, and overall experience.

4 Benefits of Increasing Customer Retention for Ecommerce Brands

#1: Cost Efficiency

Acquiring new customers is significantly more expensive than retaining existing ones. 

Marketing campaigns, promotions, and advertisements aimed at new customers often require substantial investments. 

In contrast, retaining customers usually involves nurturing relationships through more cost-effective means like email marketing and loyalty programs.

#2: Increased Revenue 

Retained customers tend to spend more over time. 

They are familiar with your products, trust your brand, and are more likely to make higher-value purchases. 

This is because loyal customers are not only repeat buyers but also potential purchasers of high-margin products and services.

#3: Word-of-Mouth Marketing

Satisfied, loyal customers are more likely to refer your brand to friends and family. 

This is valuable because 92% of consumers trust recommendations from friends and family over other forms of advertising.

This organic promotion can lead to new customer acquisitions without additional marketing costs. 

#4: Competitive Advantage 

Having a strong base of loyal customers gives you a competitive edge. 

These customers are less likely to be swayed by competitors' offers and more likely to stick with your brand because of the positive experiences they’ve had.

By investing in strategies that keep your customers engaged and satisfied, you can drive long-term growth, build a loyal customer base, and ultimately enhance your profitability.

Proven Customer Retention Strategies

Strategy #1: Personalization

Building a strong customer relationship through personalization is key to retaining customers as 80% of consumers are more likely to make a purchase when brands offer personalized experiences.

By offering tailored experiences, you show customers that you understand and value their unique preferences. This can significantly enhance their shopping experience and increase loyalty. 

To enhance your customer’s interactions with your brand, consider the following strategies: 

1. Personalized Recommendations: Use data analytics to understand and analyze customers’ browsing history, purchase patterns, and preferences. Based on this data, provide personalized product recommendations. For instance, if a customer frequently buys fitness gear, recommend new arrivals or related accessories. You should have this stored within each customer's Klaviyo profile.

2. Customized Email Marketing: Segment your email list based on customers’ behavior and demographics. Send targeted emails with personalized subject lines and content. For instance, if a customer recently purchased a product, send them an email with related product suggestions or complementary items. You can do this with dynamic segments in Klaviyo with Dynamic Blocks

3. Dynamic Website Content: Use dynamic content on your website to tailor the shopping experience. This could involve showing different homepage banners or product collections based on the customer’s previous interactions with your site. This is exactly what Because offers, especially when leveraging your customer's Klaviyo data. More on this later.

4. Personalized Discounts and Offers: Offer personalized discounts and promotions based on customer behavior. If a customer frequently purchases a specific brand, send them a special discount for that brand to encourage repeat purchases. You can specify the offer based on the customer profile within Because, so that you are providing the best offer for each customer.

Strategy #2: Effective Communication

Maintaining open and effective communication with your customers is essential for building strong relationships.

Regular, meaningful interactions can help keep your brand top-of-mind and foster a sense of loyalty.

Consider these strategies for deploying effective communication:

1. Email Newsletters: Regularly send newsletters that provide value to your customers. This can include product updates, industry news, helpful tips, and exclusive offers. Ensure the content is relevant and engaging to keep customers interested.

2. Social Media Engagement: Use social media platforms to interact with your customers. Respond to comments, share user-generated content, and create interactive posts. This not only builds community but also shows customers that you value their input.

3. Customer Service: 93% of customers are likely to make repeat purchases with companies that offer excellent customer service so be sure to provide exceptional customer service by being responsive and helpful. Use multiple channels like chatbots, social media, email, and phone support to address customer queries and issues promptly. 

4. Feedback Mechanisms: Actively seek customer feedback through surveys, reviews, and direct interactions. Use this feedback to improve your products and services. Communicating changes based on customer input can enhance their trust and loyalty.

Strategy #3: Implementing a Loyalty Program

By rewarding customers for their repeat business, you can foster a sense of loyalty and encourage them to continue purchasing from your store. 

Effective loyalty programs can increase customer lifetime value and generate consistent revenue.

Check out these points below: 

1. Increased Customer Retention: Loyalty programs incentivize customers to return to your store and studies show that loyalty members generate 12-18% more revenue per year than customers who are not members.

2. Higher Average Order Value: Customers who are part of a loyalty program often spend more per transaction to earn rewards faster. This can boost your average order value (AOV).

3. Improved Customer Engagement: Loyalty programs provide a platform for ongoing engagement. Regular communication about rewards, exclusive offers, and program updates keeps your brand top-of-mind.

4. Valuable Customer Insights: By analyzing the data from loyalty programs, you can gain insights into customer behavior and preferences. This information can be used to refine your marketing strategies and improve personalization efforts.

Loyalty programs come in all different shapes and sizes: 

1. Points-Based Programs: Customers earn points for every purchase, which can be redeemed for discounts, free products, or other rewards. This type of program is straightforward and easy to understand. For example, Sephora’s Beauty Insider program allows customers to earn points on every purchase, which can be redeemed for beauty products and exclusive experiences.

2. Tiered Loyalty Programs: These programs offer different levels of rewards based on customer spending. The more a customer spends, the higher their tier and the better the rewards. This structure encourages customers to spend more to reach higher tiers. Airlines like Delta and retail giants like Nordstrom successfully use tiered programs to reward their best customers with exclusive perks.

3. VIP Memberships and Exclusive Offers: Offer a paid VIP membership that provides exclusive benefits such as free shipping, early access to sales, and special discounts. This not only generates additional revenue but also creates a sense of exclusivity and privilege amontg members. Amazon Prime is a quintessential example, offering free shipping, access to streaming services, and other perks for a yearly fee.

Some best practices to follow during implementation: 

1. Define Clear Objectives: Determine what you want to achieve with your loyalty program. Is it to increase repeat purchases, boost AOV, or gather more customer data? Clear objectives will guide the design and implementation of your program.

2. Choose the Right Type: Based on your objectives and customer base, decide whether a points-based, tiered, or VIP program is the best fit. Each type has its own benefits and appeal.

3. Promote the Program: Ensure your customers know about the loyalty program through email campaigns, social media, and on your website. Highlight the benefits and how easy it is to join and earn rewards.

4. Make it Easy to Use: The program should be simple for customers to understand and use. Avoid complicated rules and ensure the process of earning and redeeming rewards is straightforward.

5. Regularly Update and Improve: Continuously gather feedback from members and make improvements to the program. Keep it fresh with new rewards and exclusive offers to maintain interest and engagement.

Check out how Chomps uses its “Chompian” loyalty program as a way to add personality and humor to their brand: 

By implementing a well-designed loyalty program, you can create a community of loyal customers who are not only repeat buyers but also enthusiastic promoters of your brand.

Because integrates with Loyalty apps like Loyalty Lion so that you can adapt your text and image based on the loyalty tier each visitor is on.

Strategy #4: Provide Exceptional Customer Service

Face-to-face interactions are rare in ecommerce, so providing outstanding service can make a significant difference in how customers perceive and engage with your brand. 

High-quality customer service not only resolves issues but builds trust and loyalty, encouraging customers to return. 

According to Salesforce, 89% of consumers are more likely to make another purchase after a positive customer service experience.

Resolving issues promptly and efficiently leads to higher customer satisfaction, and happy customers are more likely to recommend your brand to others. 

Additionally, effective customer service can help identify and resolve issues that might otherwise lead to customer churn. By addressing problems quickly, you can prevent customers from leaving.

Consider these best practices as you implement or improve your existing customer service experience: 

1. Fast Response Times: Customers expect quick responses. Aim to respond to inquiries within a few hours, if not sooner. Use chatbots to provide instant answers to common questions and ensure human agents are available for more complex issues.

2. Multichannel Support: Offer customer support across multiple channels, including email, live chat, social media, and phone. This provides customers with options and ensures they can reach you through their preferred method.

3. Empower Customer Service Teams: Equip your customer service teams with the tools and authority they need to resolve issues efficiently. This can include access to customer purchase history, the ability to issue refunds or discounts, and training on best practices for customer interactions.

4. Personalize Interactions: Address customers by name and reference their purchase history during interactions. Personalization shows that you value them as individuals and enhances the overall customer experience.

5. Follow-Up: After resolving an issue, follow up with the customer to ensure they are satisfied with the resolution. This extra step shows you care about their experience and can help turn a negative situation into a positive one.

Ensuring that your customers feel valued and supported will not only keep them coming back but also encourage them to spread the word about your brand.

Strategy #5: Offer Incentives and Discounts

Entice customers to make additional purchases by offering value through special deals, thus strengthening their loyalty to your brand. 

Incentive and deals can be customized to fit your brand and/or customer. Check out some of these popular options below: 

1. Limited-Time Offers: Create a sense of urgency by offering discounts for a limited period. Flash sales and time-sensitive discounts can encourage quick purchases. For instance, you might offer a 20% discount on all items for 24 hours to drive immediate sales.

2. Referral Discounts: Encourage your existing customers to refer friends and family by offering them discounts on future purchases. For example, provide a 10% discount to both the referrer and the new customer when a referral results in a purchase.

3. Birthday and Anniversary Discounts: Show customers you care by offering special discounts on their birthdays or the anniversary of their first purchase. Personal touches like these can make customers feel valued and appreciated.

4. Bulk Purchase Discounts: Offer discounts for bulk purchases to encourage customers to buy more at once. For example, you might offer a "Buy 3, Get 1 Free" deal to increase the average order value.

While discounts can be effective, overusing them can devalue your brand and train customers to only buy when there's a sale. 

Therefore, use discounts strategically and sparingly to maintain their impact. Ensure that the terms and conditions of your discounts are clear and easy to understand, as miscommunication can lead to customer frustration and dissatisfaction. 

And don’t forget to use customer data to create targeted discount offers. 

For example, Zak!’s water uses Because’s platform to segment (so you don’t have to) and first-time users are automatically greeted with a discount offering at the top of the page. 

You might also consider using discounts to encourage customers to explore related products. 

For instance, you might offer free shipping when a customer purchases complementary products together similar to tomboyx’s Bikini Tencel that match the Essentials Soft Bra.

Just remember - to effectively offer discounts, you need to set clear goals. 

Determine what you want to achieve with your discounts—whether it's boosting sales during a slow period, moving excess inventory, or rewarding loyal customers. Clear goals will help you design effective discount strategies. 

Measure the impact of your discount campaigns by tracking metrics like redemption rates, conversion rates, and impact on average order value. This allows you to see what works and make data-driven adjustments. 

Balance short-term gains with long-term strategy by considering the long-term impact of discounts on customer behavior and brand perception. Use discounts to complement your overall customer retention strategy rather than relying on them exclusively.

By offering well-timed and thoughtfully designed incentives and discounts, you can enhance customer satisfaction, encourage repeat purchases, and ultimately improve customer retention.

Strategy #6: Pay Attention To Customer Feedback

77% of consumers view brands more favorably if they proactively invite and accept customer feedback.  

By actively seeking and acting on feedback, you can demonstrate to your customers that you value their opinions and are committed to enhancing their shopping experience. 

This, in turn, fosters loyalty and encourages repeat business.

There are numerous ways to go about gathering customer feedback: 

1. Surveys: Send out surveys to your customers to gather detailed feedback on their shopping experience. Use tools like SurveyMonkey or Google Forms to create and distribute surveys. Ask specific questions about product satisfaction, website usability, and customer service. Or you can use post-purchase survey tools that integrate with your Shopify store to learn more about their customer journey and satisfaction.

2. Product Reviews: Encourage customers to leave reviews on your product pages. Positive reviews can boost your brand’s credibility, while negative reviews provide insights into areas for improvement. Scotch Porter features its reviews next to its products making it easy for customers to read before purchasing. Fairing, KNO Commerce and Grapevine all work here.

3. Social Media: Monitor social media platforms for mentions of your brand. Engage with customers who provide feedback, both positive and negative, and use their comments to improve your offerings.

4. Customer Service Interactions: Use customer service interactions as an opportunity to gather feedback. Train your support team to ask for feedback at the end of each interaction, and record the insights for analysis.

When you collect your feedback, use it to guide your next steps:

1. Analyze Feedback: Regularly review the feedback you receive to identify common themes and areas for improvement. Use data analytics tools to help categorize and prioritize the feedback.

2. Implement Changes: Based on the feedback, make necessary changes to your products, services, or website. Communicate these changes to your customers to show that you are listening and taking action.

3. Follow-Up: After implementing changes, follow up with the customers who provided the feedback. Thank them for their input and let them know how it has been used to improve their experience. This can turn a negative experience into a positive one and build customer loyalty.

4. Create a Feedback Loop: Establish a continuous feedback loop where you regularly gather, analyze, and act on customer feedback. This ongoing process ensures that you are always aware of customer needs and can make timely improvements.

Keep these best practices in mind when utilizing customer feedback: 

1. Make It Easy to Provide Feedback: Simplify the process for customers to provide feedback. Use short, accessible surveys and make review submission straightforward.

2. Be Responsive: Acknowledge all feedback, whether positive or negative. Respond promptly to show customers that you value their opinions.

3. Show Appreciation: Thank customers for their feedback and, if possible, offer a small incentive, such as a discount on their next purchase, as a token of appreciation.

4. Share Success Stories: Highlight how customer feedback has led to positive changes. Share these stories through newsletters, blog posts, or social media to show that you are committed to continuous improvement.

By effectively leveraging customer feedback, you can make informed decisions that enhance the customer experience, resulting in higher satisfaction and improved retention rates.

Strategy #7: Enhance the Customer Experience

A positive customer experience keeps customers satisfied, encourages repeat purchases, and fosters brand loyalty. 

Tip 1: User-Friendly Website Design

To enhance your customer’s experience, implement a user-friendly website design. 

Customers should be able to navigate your site easily, find what they need quickly, and complete purchases without frustration.

Humidifier brand Canopy does an excellent job of featuring important information alongside product images, reducing scroll time for viewers.

Different product colors and subscription prices are visible off the bat.

Consider these key elements to ensure the seamlessness of your website design: 

1. Intuitive Navigation: Organize your website with clear categories and straightforward navigation menus. Use a logical structure that helps customers find products with minimal clicks.

2. Mobile Optimization: Ensure your website is fully optimized for mobile devices. According to Statista, over 50% of ecommerce traffic comes from mobile devices.

3. Fast Loading Times: Slow-loading websites frustrate customers and can lead to high bounce rates. Use tools like Google PageSpeed Insights to analyze and improve your website’s load times. Aim for a load time of three seconds or less.

4. Clear Call-to-Actions (CTAs): Use prominent and persuasive CTAs to guide customers through the purchasing process. Buttons like “Add to Cart,” “Buy Now,” and “Checkout” should be easily visible and compelling.

5. High-Quality Images and Descriptions: Provide high-quality images and detailed descriptions for all products. This helps customers make informed decisions and reduces the likelihood of returns.

Tip 2: Ensure Fast and Reliable Shipping

Shipping plays a significant role in the ecommerce customer experience as customers expect fast, reliable, and affordable shipping options. 

Meeting these expectations can greatly enhance customer satisfaction and retention.

Review the strategies below to optimize your customer’s shipping experience: 

1. Multiple Shipping Options: Offer a range of shipping options, including standard, expedited, and overnight shipping. Providing choices allows customers to select the option that best suits their needs.

2. Transparent Shipping Information: Clearly communicate shipping costs, delivery times, and tracking information. Transparency helps set customer expectations and builds trust.

3. Free Shipping Incentives: Consider offering free shipping for orders over a certain amount. This can encourage larger purchases and improve the overall customer experience.

4. Reliable Delivery Partners: Partner with reliable delivery services to ensure packages arrive on time and in good condition. Delays and damaged goods can negatively impact customer satisfaction.

5. Easy Returns Process: Simplify the returns process by providing pre-paid return labels and clear instructions. A hassle-free returns policy can enhance customer trust and encourage repeat business.

Tip 3: Brand Continuity and Frequent Updates

Ensuring consistent branding across all touchpoints, including your website, emails, and social media, is essential for building trust and recognition. 

A cohesive brand experience makes customers feel more connected to your business. 

Regularly updating your website with the latest products, promotions, and content is also vital. 

Frequent updates indicate that your business is active and engaged, which can boost customer trust and keep them coming back for more. 

By focusing on these best practices, you can create a positive and memorable customer experience that fosters loyalty and encourages repeat business.

Strategy #8: Email Marketing for Retention

By engaging customers through personalized and relevant email content, you can keep your brand top-of-mind, encourage repeat purchases, and build long-term loyalty. 

And this is a stat you don’t want to miss - email marketing for ecommerce has been found to have an average ROI (return on investment) of 45:1. 

Compared to other forms of marketing, email’s ROI is $40.

Let's dive into how you can leverage email marketing to enhance customer retention.

1. Welcome Emails: First impressions matter. Send a warm, personalized welcome email to new subscribers or customers. Include a special offer or discount to encourage their first purchase. According to a study by Experian, welcome emails generate 4 times the open rates and 5 times the click rates compared to other promotional emails.

2. Re-engagement Emails: Reach out to inactive customers with re-engagement campaigns. Offer incentives such as discounts or exclusive content to entice them back. For example, a "We Miss You" email with a special offer can rekindle interest and encourage a return visit.

3. Post-Purchase Follow-Ups: After a purchase, follow up with a thank-you email. Include related product recommendations, a request for feedback, or information on how to use the purchased product effectively. This not only shows appreciation but also keeps the customer engaged.

4. Abandoned Cart Emails: Recover lost sales by sending timely reminders to customers who left items in their cart. Offer a discount or highlight the benefits of the products to encourage them to complete the purchase. Studies by SaleCycle show that nearly half of all abandoned cart emails are opened, and over a third of clicks lead to a purchase back on site.

And last but not least, some best practices: 

1. Personalization and Segmentation: Personalize your emails with the customer’s name and tailor the content to their preferences and behavior. Segment your email list based on criteria such as purchase history, browsing behavior, and demographics. According to DMA, segmented and targeted emails generate 58% of all revenue.

2. Provide Valuable Content: Ensure your emails offer value beyond promotions. Share useful tips, how-to guides, industry news, and exclusive insights. Valuable content keeps customers engaged and looking forward to your emails.

3. Optimize for Mobile: With a significant number of emails being opened on mobile devices, it’s crucial to ensure your emails are mobile-friendly. Use responsive design, concise content, and clear CTAs that are easy to tap on small screens.

4. Clear and Compelling CTAs: Every email should have a clear call-to-action (CTA). Whether it’s “Shop Now,” “Learn More,” or “Claim Your Discount,” make sure the CTA stands out and is easy to act upon.

5. Test and Optimize: Regularly test different elements of your emails, such as subject lines, send times, and content. Use A/B testing to determine what resonates best with your audience and continuously optimize based on the results.

Effective email campaigns can significantly enhance customer engagement and retention. 

For instance, sending emails that highlight special promotions and product launches tied to holidays and seasons can create excitement and drive sales. 

Keeping customers informed about their loyalty program status, points balance, and available rewards helps maintain their interest and participation in the program. 

T2 uses Because’s platform to segment users in order to personalize newsletter sign ups but the options for presonalizing email communications are endless. 

For example, you might offer existing subscribers early access to new products or sales as a reward for their loyalty which can make them feel valued and special. 

By implementing these email marketing strategies, you foster deeper connections with your customers, encourage repeat business, and significantly improve customer retention.

Strategy #9: Measuring and Analyzing Customer Retention

Measuring and analyzing key metrics is essential for improving customer retention because it allows you to evaluate the success of your retention strategies and identify areas for improvement. 

Let’s explore the essential metrics for tracking customer retention:

1. Customer Retention Rate (CRR): This metric measures the percentage of customers who continue to purchase from your store over a specific period. It is calculated using the formula:
   

1. A higher CRR indicates a successful retention strategy. 

2. Customer Lifetime Value (CLV): CLV predicts the total revenue a business can expect from a single customer account throughout their relationship. 

It is calculated as follows: CLV = Average Purchase Value x Average Purchase Frequency Rate x Customer

Increasing CLV is a key goal of retention strategies, as it directly correlates to higher profitability.

3. Repeat Purchase Rate (RPR): This metric measures the percentage of customers who make more than one purchase. It is calculated using the formula:
              

3. Churn Rate: Churn rate measures the percentage of customers who stop buying from your store over a specific period. It is calculated using the formula:
   

A lower churn rate indicates better customer retention. 

Some essential tools for tracking customer retention:

1. Customer Relationship Management (CRM) Systems: CRM and email tools like Klaviyo, BigCommerce, and Sendlane help track customer interactions, purchase history, and engagement. These systems provide valuable insights into customer behavior and help tailor retention strategies.

2. Analytics Tools: Google Analytics, TripleWhale, Northbeam offer detailed insights into customer behavior on your website. Track metrics like repeat visits, conversion rates, and user flow to understand how customers interact with your site.

3. Customer Feedback Tools: Tools like SurveyMonkey, Qualtrics, and Typeform help gather and analyze customer feedback. Use these tools to identify pain points and areas for improvement in the customer experience.

4. Email Marketing Platforms: Platforms like Klaviyo offer analytics on email campaign performance. Monitor open rates, click-through rates, and conversion rates to gauge the effectiveness of your email marketing efforts.

Follow these best practices to measure and analyze customer retention: 

1. Set Clear Goals: Define specific, measurable goals for your retention efforts. This could include increasing your CRR by a certain percentage, reducing churn rate, or boosting CLV.

2. Regularly Review Metrics: Monitor your key retention metrics on a regular basis. Weekly or monthly reviews can help you identify trends and make timely adjustments to your strategies.

3. Segment Your Data: Analyze retention metrics by customer segments to identify which groups have higher or lower retention rates. This can help you tailor your strategies to different customer needs.

4. Use A/B Testing: Implement A/B testing for retention strategies to determine what works best. Test different email campaigns, loyalty program structures, and customer service approaches to see which methods yield the best results. Because is a great tool to implement and analyze your A/B tests.

5. Act on Insights: Use the insights gained from your analysis to refine and improve your retention strategies. Continuously iterate and optimize your approach based on data-driven decisions.

By effectively measuring and analyzing your customer retention metrics, you can gain valuable insights into the success of your strategies and make informed decisions to enhance customer loyalty.

Wrapping Up

In this comprehensive guide, we explored 9 proven customer retention strategies for ecommerce, highlighting the critical role of customer retention in achieving long-term business success. 

We showed you how implementing these strategies can greatly enhance your efforts, driving repeat purchases and building a loyal customer base. 

By following these guidelines and examples, you can develop a robust customer retention strategy that not only keeps your customers coming back but also transforms them into brand advocates. 

Want to level up your retention strategy and see how it impacts your store’s revenue? 

Head over to Because and sign up for a free demo!