5 Proven Strategies to Boost Ecommerce Customer Retention in 2024

What is customer retention?

Customer retention refers to the ability of a company to retain its customers over a certain period of time. In the context of ecommerce, customer retention is crucial for the success of an online store. It is much more cost-effective to retain existing customers than to acquire new ones, and loyal customers tend to spend more and make repeat purchases.

How to measure customer retention rate in ecommerce

There are several key metrics that can be used to measure customer retention in ecommerce. One of the most common ways to measure customer retention is through the customer retention rate (CRR). This can be calculated by dividing the number of customers at the end of a period by the number of customers at the start of the period, and then multiplying by 100 to get a percentage.

5 ways to improve your ecommerce site’s customer retention

1. Launch a customer referral program

A customer referral program is a great way to incentivize your existing customers to refer their friends and family to your ecommerce store. By offering rewards or discounts for successful referrals, you can encourage your customers to become brand advocates and help you acquire new customers while also improving customer retention.

2. Take advantage of email marketing

Email marketing is a powerful tool for customer retention in ecommerce. By sending personalized and targeted emails to your existing customers, you can keep them engaged and informed about new products, promotions, and special offers. You can also use email marketing to gather feedback and improve the overall customer experience.

3. Start a customer loyalty program

A customer loyalty program rewards customers for their repeat purchases and loyalty to your ecommerce store. This can be in the form of points, discounts, or exclusive perks. By offering these incentives, you can encourage your customers to keep coming back and purchasing from your store.

4. Create an SMS marketing campaign

In addition to email marketing, SMS marketing can be a highly effective way to engage with your customers and improve customer retention. With the high open rates of text messages, you can use SMS marketing to send personalized offers, order updates, and other relevant information to your customers.

5. Iterate on your marketing strategy

It’s important to continually iterate on your marketing strategy to improve customer retention. This can involve testing different marketing channels, offers, and messaging to see what resonates best with your customers. By analyzing the data and making adjustments, you can ensure that your marketing efforts are effectively driving customer retention.

Customer retention ecommerce FAQ

Why is a customer retention strategy important in ecommerce?

A customer retention strategy is important in ecommerce because it is much more cost-effective to retain existing customers than to acquire new ones. Loyal customers also tend to spend more and make repeat purchases, so improving customer retention can have a significant impact on the bottom line of an ecommerce store.

What’s a good retention rate in ecommerce?

A good retention rate in ecommerce can vary depending on the industry and the specific business. However, as a general benchmark, a retention rate of 20-40% is considered to be good for ecommerce businesses. It’s important to track and measure your retention rate over time to see if it is improving.

What is a KPI for customer retention?

One key performance indicator (KPI) for customer retention in ecommerce is the customer retention rate (CRR). This metric can help you understand how effective your customer retention strategies are and track improvements over time. Other KPIs for customer retention can include customer lifetime value (CLV) and repeat purchase rate.