March 24, 2021

5 Time-Tested Ecommerce Customer Retention Strategies to Increase Sales With a Twist!

Want to grow your ecommerce business profitably? It’s time to give your customer retention strategy a new twist to drive repeat purchases.


You’ve heard it time and again, and we’re saying it one more time for you. If your ecommerce business is not focusing on customer retention, you’re losing out. 

Ecommerce success is no longer about one-time sales. It’s about how many times you can get the same customer back to your store to make another purchase. 

It’s about how many times this customer will choose to buy from you despite the distractions around them - competing deals from other brands on the same or similar products, new products and collections appealing to their interests; you name it. 

But the successful ecommerce businesses out there, see 65% of their revenue coming from repeat customers. 

So how do they do it? Let’s start from scratch. 


What is ecommerce customer retention? 


As briefly mentioned above, ecommerce customer retention refers to a company’s ability to turn their customers into repeat buyers. It is a business growth strategy wherein the customer prevents the buyer from switching to a competitor or even exploring the options available to them. 


Why is ecommerce customer retention important? 


As a business grows, it might seem easier to focus on running ad campaigns to continually attract new customers. But keeping your existing customers engaged with your brand, can go a long way. 

Here’s what we mean: 


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Let’s give you a few numbers to crunch on, as found by surveys and studies across the ecommerce industry: 

  • According to the Pareto Principle, about 80% of a business’s profits come from just 20% of their customers. (Forbes)
  • More than 65% of a successful business’s revenue comes from existing customers. 
  • The probability of selling to an existing customer is 60-70%, as compared to the mere 5-20% to a new customer. (Altfield)
  • A 5% increase in customer retention resulted in boosting the business profits by 25% to 95%. (SmallBizGenius)
  • $136.8 billion is lost per year by companies due to consumers switching to other brands in the US alone. (CallMiner)
  • 82% of companies agree that customer retention is cheaper than acquisition in a competing industry. 

Think about the amount of resources you’re spending on enticing online shoppers to visit your store. 

Then think about the conversions you see from running all these campaigns. On average, ecommerce businesses see about 2-5% conversions on-site, which gets increased to about 17-23% on running retargeting and remarketing campaigns on their store visitors. 

Losing a customer who buys from you is like losing the amount of resources you have spent attracting them in the first place. 

Now when you’re growing your business, you might feel that reaching new consumers far and wide is more important to get your brand ‘known’. We don’t disagree. 

But you can, at the same time, also keep your existing customers engaged from day 1 of their first interaction with you. 

Here are some of the time-tested ecommerce customer retention strategies you can put to use. 


Ecommerce customer retention strategies with a fresh approach  


1. Use your live chat to establish relationships with a HUMAN touch! 


Studies have found that about 63% of consumers are more likely to return to a website after using a live chat. At the same time, Harvard Business Review found that more than 50% of online shoppers are seeking to interact with humans before engaging with a business in any way. 

That only goes to say that the age old tactic of relying on automations alone to handle your live chat is no longer effective. If you want to make an impression on a consumer in such a way that they keep coming back for more, you need to humanize your live chat and focus on having a conversation with them. 

As an ecommerce business owner, we know how difficult it is to manage live chat whilst tackling everything else on your plate. But with live chat apps like TextChat, you can manage your live chat queries on-the-go. 

The ecommerce live chat app lets you implement a live chat widget on your store that uses automation to strike a conversation with the visitor. But as soon as the visitor engages with the live chat, it sends you a notification on SMS along with a quick-join link that lets you hop into the conversation right away. Pretty much similar to how you text your friends and family! 

By humanizing live chat, businesses have seen a 13% increase in their on-site conversions. But more importantly, a whopping 27% increase in customer retention as consumers begin to trust the brand more for assisting them in making informed purchase decisions. 



2. Offer guest checkout, but nudge shoppers to sign up for a customer account 


Think about Amazon here for a minute.

One of the biggest reasons we keep going back to the ecommerce giant, is the ease of shopping and the personalized experience it offers to us. 

The customer account page on Amazon lets us store all our information in one place. From our profile, multiple delivery addresses, unlimited wishlists, reviews of previously purchased products to our order history and the ability to place a reorder, the account page has everything we need to make a quick purchase. And that’s exactly what we’re looking for when shopping online! 



In fact, even Walmart has been using this strategy to keep their customers hooked: 



But getting customers to sign up for an account on your online store may seem like asking for too much. 

So the trick here is to allow your store visitors to checkout as a guest, but at the same time subtly encourage signing up for an account with a value proposition after the first order has been placed.  

You can do this in a few ways: 

  • Offer an exclusive discount on the next purchase on signing up for a customer account on your store 
  • Let them know how easy order tracking would be if they signed up for an account on the site 
  • Nudge them to create an account by mentioning ‘how easy shopping next time’ can be if they signed up
  • Mention subtly how you offer them the option to ‘save their shipping information’ for later to enable faster checkout 
  • Share the benefits of your loyalty program that can be availed on signing up for a customer account on your site 
  • Let them know how easy it would be to manage their returns, refunds and exchange of orders 

And what’s there in it for you?

When a consumer signs up for a customer account on your store, they start sharing more information with you. You get to know them better with every interaction they make with the feature, that enables you to learn more about them. 

With a better understanding of their needs, preferences and their shopping behaviour, you can personalize your marketing campaigns - catering to the 80% of consumers who pledge to remain loyal to a brand that uses context to run their promotions. 


3. Set up a loyalty program, but gamify it for better engagement 


You’ve probably heard this one before. 

Loyalty programs are one of the most-used ecommerce customer retention strategies. The strategy focuses on increasing the frequency at which a customer interacts or makes purchases from your brand by motivating them with value-added services or rewards. It drives retention on the simple logic of a profitable exchange between you and your customers. 

While this is a strategy implemented by most ecommerce businesses, only 20% of them see success with it. They see customers signing up, but getting disengaged within weeks, leading to a high churn rate despite enticing rewards. 

So here’s what you can do differently - Gamify your customer loyalty program. 

Human brains are wired to ‘want more’. A simple promise of exclusivity or getting to stay ahead of others, is motivation enough for them to remain proactive. 

For example, The Man Company has gamified their customer loyalty program by creating tiers - silver, gold and platinum. Each tier comes with its own set of benefits and value-adds for a customer and they can only ‘progress’ through it to reach to the top. 




In addition to gamification, the ecommerce businesses offer convertible store credits to its customers instead of the usual discounts and loyalty points. This gives its customers a sense of getting more ‘money’ to make their next purchase. 

The strategy has helped the brand drive in 41% more orders using store credits, leading to an impressive 19% increase in customer retention over time. 


4. Personalize and automate your communication, but make it multi-channel 


As more businesses take to digital, your customers receive messages from innumerable brands every day. For instance, 2020 alone saw 306.4 billion emails being sent and received each day, as per Statista

What’s more? The average internet user is exposed to over 5000 ad campaigns every day. 

What we’re trying to say is that your customer is distracted and being enticed by many other brands like yours. There is a high chance that they miss out on your messages and promotions owing to cluttered social media feeds and inboxes. 

This is where you need to re-strategize your communication to boost customer retention. 

A study found that 72% of consumers only engage with marketing messages that are relevant or contextual to their interests. The same study also highlights that 90% of customers find personalized experiences appealing across all stages of their purchase cycle with a brand - no wonder we all love Amazon! 

The numbers only go to suggest that personalization is the name of the game. So when you’re reaching out to an existing customer, you need to make sure it is relevant to them. 

But at the same time, getting your “relevant message” read is as important. This is where implementing a multi-channel strategy comes in. 

We’re not suggesting that you go out there and blast out messages across all channels in one go. In fact, use multiple channels to strategically touch base with your customers in timed durations to stay at the top of their minds. 

For example, a consumer makes a purchase from your brand today. You’re obviously sending them an order confirmation email. 

But after the order has been delivered, it’s important to keep them engaged and give them more reasons to come back to your store. 

Most brands simply run automated email newsletters to do this. 

We’re recommending, following the same approach on web push notifications, Facebook Messenger, SMS, retargeting and remarketing. 

Leverage the difference in the interface of all these channels to keep your customers engaged. 

For instance, you’re using your email newsletters to promote your new range of products. Now use your web push notifications to bring back customers to check out the products ‘they make like’ from the new collection. And use SMS marketing to send them an exclusive early-bird discount on the new range! 

According to surveys, 52% of successful brand marketers are using 3 to 4 channels to communicate with customers. The same study also found that businesses using a multichannel strategy to keep their customers engaged saw a 33% increase in retention rates and drove in 7x more repeat purchases. 


5. Go beyond ratings and reviews to know how customers feel with feedback 


We know you didn’t see this one coming and it’s okay. 

Customer feedback is often seen as a way to simply get a consumer’s opinion on how they feel about a product or a service. For ecommerce businesses, this is mostly in the form of product reviews, ratings and testimonials. 

Nothing wrong with that approach! 

But reviews and ratings only get you the consumer’s opinion on the product they have purchased from you. This is a direct indicator of whether or not they found the product living up to their expectations. But it says nothing about how they feel about your brand or whether they’re going to come back to your store. 

This is where customer feedback comes in. 


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When more than 70% of consumers switch brands for a better experience, it’s important to understand how a customer feels about you throughout their purchase journey. This includes both pre- and post- purchase experience. 

Gathering customer feedback helps you understand how you can improve a customer experience over time. At the same time, it makes your customers feel valued, giving them a bigger reason to remain loyal to your brand. 

And it’s not all data. Customer feedback actually leads to increase in your business too: 

  • Every point you increase on the respondent score, your conversion rate goes up by 3.9% on average 
  • Happy customers lead to 6% lower order cancellation rates, reducing your operation costs 
  • Brands with superior customer experience get 5.7 times more revenue from repeat customers 

Collecting feedback is in fact, even simpler than you thought. 

You can do this at different stages based on your strategy and the goal for collecting customer feedback. 

For example, if you’re gathering feedback from customers on the shopping experience your site offers, use your thank you page. Instead of only displaying an order confirmation message, use the space to get quick feedback. 

Similarly, you can run a quick survey by sending them a little motivation on email to participate in it. 



In fact, even a simple email that asks them to rate your business on a scale of 1 to 10 can give you insights on whether they’re coming back for more or not. 



You can run similar campaigns on other channels as well. But whether you’re using SMS, Facebook Messenger, email or web push to gather customer feedback, make sure it’s easy to participate in. More importantly, that you have a defined goal for your feedback and you’re asking the right questions that lead to actual actionables for you. 


Keep your customers to grow your business 


Consumers who have purchased from your brand already know what you offer. They have seen the products you offer and the value you bring to them. 

All they need is a little love and care, and maybe an encouraging nudge to stay engaged with your brand and choose you over others. So make sure you don’t forget about them after making the first purchase. 

They’re the ones who are more likely to trust you in a new market. They’re the ones who can introduce you to new consumers with a higher probability of purchasing your products too!