Top 10 eCommerce Customer Retention Strategies to Increase Revenue

Introduction

Are you acquiring a decent number of new customers but, on the other hand, facing a lower customer retention rate? 

It happens! Running a successful eCommerce business isn’t all about attracting new customers. It’s also about retaining them and creating a loyal customer base that secures your monthly revenue.

In a situation where your customers have an abundance of options and are constantly getting allured by your competitors, retaining them is a tough nut to crack. But it’s not impossible. 

That’s why we have interviewed our internal experts, spent hours researching which techniques have driven the best results, and then come up with these top 10 customer retention strategies you should adopt. 

Let’s start!

What’s the Average Customer Retention Rate in eCommerce?

As of now, the average Customer Retention Rate (CRR) in the eCommerce industry stands at 38%. This percentage can vary depending on multiple factors like country, industry, product category, and business model. 

For example, as per a recent study by Statista, Fast-Moving Consumer Goods (FMCG) has the highest CRR of 62%. On the other hand, the lowest rate was for Sports & Automotive - 35%.

What’s a Good Customer Retention Rate in eCommerce?

If your customer retention rate stands anywhere between 40-80%, you can consider that you have a good customer retention rate. Again, note that it depends on different factors like product category, country, etc. 

10 Best Customer Retention Strategies to Skyrocket Revenue for eCommerce  Businesses 

Retaining one-time buyers isn’t as tricky as it sounds. All you have to do is follow some simple strategies and focus on what your customers crave. For example:

1) Stay accessible to your customers 24/7 

Poor customer service is one of the main reasons for business failure. 

Why? Put yourself in the customers’ shoes for a minute. Suppose you want to buy a branded watch. Since it’s quite expensive, you want to be sure about its features and other guarantees by talking to a customer service agent.

But after sending mail after mail, you didn’t hear one single word from the other side. What’ll you do now? You’ll leave the store and check in with others.

The same happens to your customers. Once they feel they aren’t being heard and valued, they leave the store and never look back. 

In fact, a Forbes study also found the same. It said around 96% of customers will switch to another brand if they face poor customer service. That’s why you should never underestimate the power of excellent customer support. 

Don’t worry! You don’t need to invest a huge amount of money in a large customer support team.

You can delegate most tasks to automation and adopt smart strategies to stay active for your customers whenever they need you. For example:

• Add a chatbot to your official website for instant and basic support. 
• Go for multiple customer service channels, including WhatsApp, Gmail, phone numbers, online forms, etc. 
• Keep an eye on your brand’s social media handles to know if customers are tagging you for their concerns.
• Add a FAQ page to your site to ensure all the common questions are being answered. 
• Provide self-serve resources so customers can resolve all problems in real-time. 
• If you have global customers, consider different time zones and employ human support for each shift.

2) Offer personalized recommendations based on customers’ past purchases

We never forget a shopkeeper that knows our tastes and shows products according to our preferences. This behavior attracts lots of customers and makes them return since they feel prioritized.

The same is the case with eCommerce businesses, too. When you offer a personalized experience, it creates a traditional shopping experience and makes buyers feel like you genuinely care about their priorities. 

You can provide the product recommendations on the website itself so that it can attract customers’ attention.

If possible, you can also go beyond and share customized product recommendations on the branded tracking page to win customers’ impulse buy-ins. 

See how Puma pulls off this process:

3) Provide out-of-the-box post-purchase experience 

As an eCommerce business owner, your responsibility doesn’t end after just sending a “Thank You” mail once your customers complete a purchase from your store. 

Providing an excellent post-purchase experience that keeps customers coming back to your store is way more than that. The process begins from the moment they make the payment to the time they get the parcel in their hands. In between, there are hundreds of tasks you need to take care of to ensure it delights the customers. These include:

• Providing your customers with an estimated delivery date
• Sending them time-to-time tracking updates
• Providing quality packaging 
• Offering post-purchase promotions
• And more

These small efforts don’t require much time or effort yet create a sense of credibility among your customers, which further keeps them glued to your brand. 

4) Improve the shipping process

The previous point led us here. Top-notch shipping is often an overlooked process in the whole eCommerce journey that can directly impact customer satisfaction and, eventually, the customer retention rate. 

It's a subtle point that differentiates the greatest brand from the great. In fact, Meteor Space’s study claims the same theory.

As per its survey, 98.1% of customers confirm that delivery experience affects their loyalty towards a brand. 

So, if you’re still thinking shipping is nothing but only sending the goods to the customers - think again! 

Providing a top-notch shipping experience covers lots of tiny things. These are :

• Showing the estimated delivery date on the product page 
• Choosing the right carrier based on customer preference and delivery type
• Providing real-time shipping information
• Adding a bare minimum shipping charges (If possible, provide free shipping.)
• Updating the customers if any delay occurs along the way
• Managing fake and failed deliveries 
• Offering a branded tracking page
• Streamlining the proof of delivery (POD) process

When you check all the above-mentioned boxes, it creates a smooth shipping experience that further compels one-time shoppers to buy from you next time. 

💡 Pro Tip: Sure, handling all the shipping-related tasks (mentioned above) for each customer isn’t an easy feat, especially when you’ve lots of other tasks like lead acquisition, lead nurturing, marketing, and inventory management to perform. 

That’s where shipping software like ClickPost helps! ClickPost is a SaaS tool that takes care of all things shipping - from smart carrier allocation (it has partnered with 350+ carriers), providing real-time updates to managing failed deliveries. 

With it, you can also offer a branded tracking page to your buyers to enhance your brand loyalty. In fact, you can add an EDD feature to the product page to win customers’ impulse buy-ins. 

5) Incentivize your existing customers

One of the biggest mistakes eCommerce companies make is they think discounts and offers are only for first-time buyers. While this is effective and helps acquire new sales, offering special discounts only to first-time visitors can lead to a significant customer churn rate. 

Why? According to a survey by Capterra, around 78% of customers say that they won’t make a purchase if they haven’t been offered a discount.

This means if you’re not offering coupons and discounts to your existing customers, you are compelling them to switch to your competitors who might be giving exciting offers. 

So, besides providing discounts to your first-time visitors, ensure to incentivize the existing ones as well. You can do this in multiple ways:

Loyalty Programs: Reward your customers every time they buy something to persuade them to make repeated purchases. 

Take the example of Newegg - an American eCommerce company that sells computer hardware and consumer electronics. As of now, it has over 40 million loyal customers. One of the main reasons for Newegg’s enormous growth is its loyalty program named EggPoints program. 

Members can earn points by purchasing products with EggPoints badges, participating in promotional events, etc. Eventually, they can use those points to get discounts on their next purchases. 

2. Exclusive discounts: You can provide special discounts or early access to sales to your existing customers. Kohl’s, for example, witnessed a hike of around 70% in sales after providing special discounts to their most valued customers. 
3. Referral Programs: Incentivize your buyers to refer your brand to their friends and families.

Plus, you can also incentivize them with birthday gifts and discounts to win their loyalty. 

6) Build connections with the customers through clever messages

Customized messages still stay at the top of customers’ minds since they help a brand connect with the shoppers on a personal level. 

Plus, as they are created with shoppers’ preferences, past purchases, and personal information in mind, they create a long-lasting impression and make them feel like you actually care for them. 

For example, you can craft targeted specific emails or WhatsApp with the customers' names. Keep an eye on their behaviors on your site and then send them personalized messages to remind them to recover their items. 

You can also consider your customers’ birth dates and send them messages with special offers. 

But here’s the catch! You can’t craft these messages until you know your shoppers inside out. So, use tools like WebEngage and Optimizely to gather real-time customer information.

You can also nudge them to fill up a quick form to gather their personal information like gender and birth date. 

7) Make the return and refund processes as seamless as possible

Sure, returns are the negative aspects that can hamper your profit margin. But, you can turn those dissatisfied shoppers into retainers since 92% of customers say they are more likely to buy from the same brand next time if the return process is easy. 

Here are some strategies to help you create a streamlined return process:

• Create a self-serve return portal
• Use automation for instant return request analysis
• Go for prepaid (if possible labelless) return process
• Streamline the pick-up by communicating with the customers
• And most importantly, initiate the refund process as soon as possible and provide time-to-time return updates. 

If you feel managing these tasks can be overwhelming, you can rely on ClickPost since it also takes care of returns along with shipping. 

8) Try to build a community on social media

Since the rise of social commerce, every eCommerce brand is now on social media. While most of them are solely there for selling purposes, some of them are focusing on building a loyal customer base by connecting with the customers, which eventually increases their sales and customer retention rates. 

Take the example of Starbucks. Despite being a giant brand, it engages with its followers on social media (Instagram and X) and tries to build a connection through communication. 

Here’s an example from its X (Twitter) page:

Likewise, you can also address the concerns of your followers/ customers, communicate with them and make them feel like they are your priority.

You can also encourage them to create user-generated content (UGC) to build a solid loyal customer base and boost your Word-of-Mouth (WOM) marketing. 

9) Fetch customer feedback after each purchase

This is the underrated yet one of the most effective ways to boost customer retention rate. 

When you try to know where you have performed well and where you’ve lacked directly from your buyers, it makes them feel valuable. And when you work on that feedback, it makes them think that their concern is your priority.

This further creates a sense of credibility among your shoppers and makes them loyal to your brand. 

Sure, fetching feedback from each customer is a daunting task. Here also, you can rely on ClickPost, which sends automated messages to customers to fetch NPS (Net Promoter Score).

Here’s an example of an NPS mail of Nutrabay:

Oftentimes, customers ignore or overlook these messages. In that case, you can nudge them by providing offers so they can put their point of view on the likes and dislikes. Birchbox, an online monthly subscription service, offers loyalty points to customers to gather their honest feedback.

10) Prioritize sustainability

As time passes, customers’ focus is shifting towards the circular economy. They are now demanding sustainable eCommerce. As per Nielsen survey, around 73% of global consumers say they are ready to change their purchasing habits to contribute to the circular economy. 

So, if you’re not prioritizing sustainability, you’ll face major issues in retaining customers. There are multiple ways you can consider to enter into the sustainable eCommerce world.

For example, you can integrate circular product design, promote resale approaches, adopt a reuse model, and so on. 

These subtle adoptions will make your brand “nature-friendly” and retain environment-conscious customers for a long period. Brands like The Body Shop, Puma, and Mamaearth invested in sustainability to increase their customer retention rate. 

Final Words!

It doesn’t matter what your customer retention rate is; these strategies will help you boost it to a great extent. So, forget the years-old approaches and follow these strategies.

In this process, if you feel shipping and returns are the pivotal parts that directly improve customer retention rate (they absolutely do!), you can book a demo for ClickPost to know what value it can bring to your table.