Wondering how to increase your ecommerce sales?
That’s what we’ll look at today…
…Specifically, you’ll learn all about how to keep and sell more to existing customers.
Ready to dive right in?
Why an ecommerce customer retention strategy is key.
Why an Ecommerce Customer Retention Strategy Should Be a Priority For You
You’re here because you want to grow your ecommerce business.
To do that, you need to do one thing:
Keep more of your customers.
Here’s how to sell more by retaining your customers
Your existing customers are your best customers.
A new customer costs 5-25 times more than retaining an existing customer.
According to Bain & Company, even increasing customer retention rates by 5% increases profits by 25-95%.
So retaining more of your customers could be huge for your bottom line.
And that’s exactly what customer retention comes down to… increasing the number of repeat customers and the profitability of existing customers.
Sure, there are other things you need to do.
Increasing your website conversion rate is one such thing.
But at the end of the day, the customers you already have are your best asset.
How to retain customers as an ecommerce business
Here’s the thing:
As an ecommerce store, you need to think about what you sell.
That’s how you figure out what your ecommerce customer retention strategy will look like.
If you sell products people use often(say, hygiene products), you’re top of mind every day.
The same applies to subscription boxes.
But what if you sell something people don’t use every day or don’t need to buy that often (for example, furniture or printers)?
Your strategy will need to take into account that customers don’t necessarily keep you top of mind and remember you the next time they decide to buy a product you sell.
In that case, you might need to put extra effort into building relationships with them through email marketing and social media.
And once in a while, remind your customers of your business.
But what do specific customer retention techniques look like?
Let’s have a look.
1. Build a Community by Creating an Email List
A ton of business owners think:
“Ugh, do I need to create a newsletter? But they’re so annoying.”
And they’re right.
Some newsletters ARE annoying.
But then there are newsletters that are engaging. In fact, people look forward to receiving certain emails.
That’s what you want for your business, too.
How to build a community with your email list
In fact, email lists done right are all about creating a community.
And how do they help you retain your customers?
When people feel they’re part of your community, they’re much likelier to come back for more.
And here’s your step-by-step to creating an email list your customers love:
#1: Thank your customers
The best way to create goodwill with new customers?
Send a thank you email after their purchase.
You could tell them that you appreciate them as customers.
Tell them what your brand is all about.
You could even offer a welcome gift, like a discount on their next purchase or a loyalty program benefit.
Here’s Amazon’s thank you email:
#2: Make your emails feel exclusive
Here’s how to think about your emails:
With them, you’re building a club or a community.
Show it! Talk about special offers for email subscribers and show them sneak peaks of new products.
#3: Time your emails right
Want to use the full power of your email marketing efforts?
Time your emails right.
Send them when your customers are thinking about buying your products.
This works well if you sell a product people will need consistently.
Let’s say you sell teeth whitening products or beard oil.
How long does it take to use up your product?
How often do people need to buy new products?
Time your emails accordingly.
If people tend to buy a new beard oil bottle every two months, you would send your emails when it’s time for them to stock up.
2. Set Up a Loyalty Program
The next ecommerce customer retention tactic?
What better way to retain customers than rewarding them for their loyalty?
Here are the best loyalty program ideas:
#1: Use a points system
The most common loyalty program is a points system.
For every purchase, your customers get points.
Once they have a certain amount of points, they get a free product or a discount.
For example, Starbucks uses this with its Starbucks Rewards program.
#2: Use different loyalty tiers
Another loyalty program model is to have different loyalty levels.
So Level 1 might get a certain reward, like a discount.
Level 2 gets added benefits and Level 3 gets even more benefits.
Virgin Atlantic’s Flying Club uses this loyalty program model.
#3: Charge for VIP treatment
Last, you can charge for your loyalty program.
Your customers stick with you because of the deal you offer with your loyalty program. (So, the benefits far outweigh the cost.)
Amazon Prime is a VIP program.
Your benefits could include:
Free or faster shipping, exclusive discounts, and free products.
Keeping up with your customers.
3. Continuously Ask for Product Feedback
You’ll have a hard time retaining customers if your product doesn’t live up to your promises.
To make sure your customers love your products, ask for feedback.
#1: Send out surveys
Surveys can give a lot of insight into your customers’ minds.
Use them (and follow up on interesting answers).
What do people expect of your products? Why?
Do they live up to these expectations?
And what about your delivery methods? Your product packaging?
Make sure you know exactly what your customers think of your products…
…That’s the only way to make sure you retain as many customers as possible.
#2: Send out feedback forms
Beside using surveys, you can send out feedback forms.
These can usually be sent with the product or as an email when your customers have received their product.
Keep the feedback form simple, so that people don’t get overwhelmed and leave it unanswered.
Here’s how Airbnb does it:
#2: Reach out to past customers
Finally, reach out to your customers.
Ask them what made them buy from you again OR why they didn’t do it.
You might be surprised by how much invaluable data you get this way.
4. Get the RIGHT Customers
You know how it is:
Not all customers are your ideal customers.
Some will love your brand… Some won’t.
If you attract the wrong customers, it’ll be hard to retain them- whatever you do.
Instead, do this.
Use marketing that targets YOUR ideal customers.
- Affiliates and referrals. One of the best ways to attract the right customers? Use affiliates and referrals. Studies have shown that friend referrals have a 25% higher profit margin and are 18% less likely to leave.
- Use the right marketing channels. Where do your customers hang out online? That’s where you want to be. For example, if they’re on Instagram, that’s where you should be. Read our marketing strategy guide here.
- Use the right keywords. Last, Google could drive a good amount of traffic to your website. But! To make sure you benefit from that traffic, you need to target the right keywords. Read our guide here.
5. Create a Mission That Speaks to Your Customers
You might be surprised…
…But your brand values matter for customer retention.
A study by the Harvard Business Review showed that consumers build relationships with brands thanks to shared values… Not because of how often they interact with a brand.
So if your customers think you share their values, chances are they’ll stick around.
But what does this look like?
Here are a few examples:
#1: A shared cause
A shared cause is one of the best ways to unite your customers.
Maybe you speak for a cause, like animal welfare.
Or you donate a portion of your revenue to a cause.
Shoe brand TOMS does this.
Its “One For One” program helps people in need every time a pair of shoes is purchased.
Warby Parker is another example.
Every time someone buys a pair of glasses, it donates a pair of glasses.
#2: Build your values into your brand
But working for a cause is not the only way to create a strong mission.
If you want to retain your customers no matter what, look at companies like Apple.
They have their values built into their brands.
Apple’s tagline is “Think Different”.
It’s all about being a creative and trailblazer.
These values make Apple’s customers queue for hours during product launches.
They happily pay premium prices.
And… Apple is today the most valuable company in the world.
Make your order processes as user-friendly as possible.
6. Make It Easy for Your Customers to Buy from You
Want to make sure your customers stick around?
Then, make sure it’s as easy as possible to buy from you.
#1: Shipping and returns
Make it easy to order from you AND return orders.
This could mean free shipping, working with a shipping company that delivers the goods on time, and a fast and simple return policy.
Want to make sure you optimize the process and retain your customers?
Follow up with customers to see what they think of your shipping and returns.
#2: Customer service
What else can you do to make it easy for your customers to buy from you?
Improve your customer service.
Is it easy for people to contact you? Do they get the service they need?
Consider using a chat service like Intercom.
Make your support page visible on your website.
And send out feedback forms after a customer has contacted you to see how your customer service can be improved.
7. Create Amazing Product Descriptions
Your product descriptions can have a major impact on your customer retention rate.
If you don’t deliver what you promise, your customers won’t buy from you again.
So how do you make sure your product descriptions describe your product in the right way… AND sell?
#1: Images and videos
Your images and videos are the only way for your customers to see your products before they buy.
That’s why high-quality images and videos are so important.
Show what the product looks like from different angles.
If possible, include a short video where you use the product.
Take a look at Asos’ product images:
#2: Your copy
Use your copy to describe materials, sizing, and colors.
For example, here’s how Glossier does it:
#3: Use social proof
Showing that your customers love your products is a good way to improve conversions on your website.
But social proof serves a second purpose, too.
Let’s say you ask customers to tag your company in Instagram pictures.
You then show those pictures on your website.
What does this do?
Your website visitors (potential customers) see how the products look in “real life.”
This means they have the right expectations when they order the product… And your retention rate stays high.
Over to You!
That’s it! There you have the 7 best customer retention strategies.
It all comes down to targeting the right customers and improving the experience for them.
Over to you.
How are you improving your customer retention rate?
Share your experiences below.