80% of companies say customer retention is important, but only 30% are actually good at it. That means a good number of customers need to be made aware of retaining customers in their eCommerce store. Even at Shopify, the number is also high.
If a business wants to do better in eCommerce, there is no alternative to retaining customers because, in the end, the retained customer becomes a loyal one. On the other hand, some business people may know the importance of customer retention but need to learn the strategies.
Keeping clients takes more than just offering superior goods and services. Improving the client experience and offering incentives for repeat purchases are both essential measures to implement.
In this article, we will talk about the ways of retain customers at Shopify. First of all, let’s see what customer retention is,
What Is Customer Retention?
Customer retention is an indicator of a company’s success in maintaining the flow of repeat customers. Customer retention measures not just the percentage of repeat buyers but also their level of satisfaction, involvement, and personal attachment to a particular brand.
Moreover, customer retention focus on the lifetime value of a customer, which begins with the first transaction they make and includes all subsequent interactions. If a company notices a decline in client retention, for instance, it can utilize that information to figure out why and then modify its products accordingly.
Retaining current consumers is essential because the cost of recruiting new ones is substantially higher. Customers who stick around are also more inclined to promote your brand through personal recommendations. Know how to increase the brand visibility at Shopify.
The Importance of Customer Retention in eCommerce Businesses
Only 5–20% of unique visitors actually make a purchase from your site. Existing customers account for 65% of a business’s profit, while the cost of acquiring new ones is 16 times higher.
So, keeping your eCommerce customers is essential to the long-term viability of your company. These customers are more likely to make repeat purchases and advocate for your business among their social circles.
- Increase Customer AOV
- Boost Company ROI and Sales
- A Cheaper Way to Attract Prospects
- Give a Push into the customer’s Purchase Frequency
- Increase Customer’s CLV
Importance 1- Increase Customer AOV
AOV means average order value. To calculate AOV, divide your total revenue from all orders by the total number of consumers placed. If your product price is 20$ and your customer’s average order value is $100, then you may relax because the AOV ratio of your business is on point.
Now the question is, how can this AOV be maintained? This is only possible if customers become repetitive and buy products in bulk. When a business successfully grabs the attention of old customers, that calls for customer retention. When a customer becomes retained, he will be willing to pay a few extra if needed. As a result, a business can make a profit.
Importance 2- Boost Company ROI and Sales
Profits can be increased by 25-95% for every percentage point of improvement in client retention, according to a study cited in the Harvard Business Review. Even if there is a large margin of error, it still highlights how much impact even a slight improvement in customer retention can have on ROI. Read this to learn about the increasing technique of ROI.
According to HBR, it costs 5-25 times higher to bring in a new customer than to keep an old one. Hence, one easy method to cut costs and boost ROI is prioritizing keeping existing customers happy.
Additionally, repeat business from current consumers is more profitable because they have already demonstrated a preference for your offerings. Since they like working with your organization, they are more willing to pay for optional extras that add to the quality of their experience.
Sales, especially those that prioritize upselling, improve when the percentage of returning customers rises. You can increase the average order value per customer by upselling to existing clients who have already purchased from you.
Importance 3- A Cheaper Way to Attract Prospects
When your business focuses on customer retention, satisfied customers will praise your business through reviews, recommendations and references. In such a scenario, social media will help showcase your product and inform prospects through retained customers.
The success of your customer retention approach is to keep existing customers happy and get new customers from them. Instead of making guesses about what your customers want, implement strategies to gain insight from their experiences.
Use existing data of your happy customer to modify your approaches and offer to upsell and cross-sell to your current client. As a result, your existing customers will be repeated into your business and will bring new customers.
Importance 4- Give a Push into the customer’s Purchase Frequency
Purchase frequency refers to the total number of purchases a customer makes in a specific period. Your company will grow the greatest because of your repeated customers.
A good number of startup businesses make the common mistake of prioritizing customer acquisition over retaining existing ones. In the end, a company needs to retain repeat customers who work hard to make a brand value of a business.
In addition, According to Clever Tap, 82% of CEOs feel that retaining existing customers saves money over attracting new ones. Therefore, there is no doubt that repeated customer boost purchase frequency as well.
Importance 5- Increase Customer’s CLV
Customers’ lifetime value and customer retention are related to each other. Long-term customer value (LCV) and keeping existing customers happy is a sign of a good business relationship.
According to a poll by Qualtrics, 75% of organizations responded that boosting CLV was a high priority for their business, whereas 64% said that improving retention of clients was the primary way of their business.
customer retention would rise significantly with an increase in the lifetime value of consumers. In other words, if you have faced problems grabbing the attention of your existing customers, then your LCV needs some attention, too.
Keeping customers will likely take time and effort if your LCV is lower than you’d want. Although there is no direct causality between the two, there is a strong correlation between the two variables. Therefore, if retaining customers is important to your business, CLV is an area where your attention should be needed.
How to Increase Customer Retention
Look at how your customers feel and what they think about your brand if you want to increase customer retention. Their interactions can influence a customer’s opinion of a company. Here are some ways to increase customer retention.
- Know Your Customer Demand
- Offer Discount and Incentives
- Give Your Customers the VIP Treatment
- Arrange Exceptional Customer Service
- Make Sure Fast Delivery and a Flexible Return Policy
Way 1- Know Your Customer Demand
To retain customers, knowing about their demand is essential. Because when you understand their pain point, they will become loyal to your brand. Maintaining satisfied customers is a key component of any client retention strategy.
A high-quality eCommerce site with a loyalty program, regular promotions and discounts, and exciting material showcasing your products is the key to knowing your customers.
Way 2- Offer Discount And Incentives
The majority of customers want to get discounts and incentives from a company from where they buy products regularly.
Offering discounts and incentives is one of the incredible ways to increase customer retention. The first step of providing discounts and incentives is making a segment of the customers who are repetitive and eligible for getting discounts.
Of course, you will offer discounts to only some of your customers. But sometimes on the eve of holidays, you can offer a flat discount for all your customers to make them loyal. On the other hand, provide incentives to those customers who bring new clients to your business.
Way 3- Give Your Customers the VIP Treatment
If you are a Shopify store owner, you are open to using different plugins in your store. Adding an app will be an extra perk for you and your clients.
For example, if you are someone, who is running a B2B wholesale business at shopify, then you can add an third-party bulk order app in your Shopify store. These apps cut the extra cost and make your customer feel special.
Read this article to learn about low-cost B2B business ideas.
A bulk order app that will allow your customers to choose multiple items from one product page.
A customer can not do it in Shopify because ordering several products from one product page is not possible by default. So using an app will add an extra perk to your store, which will help you to retain your customers.
Here is an example of what a bulk order app looks like-
Here, we can see a storeowner is using a third-party bulk order app for Shopify, which allows its users to add multiple products from one product page.
This is a significant advantage for a storeowner because he can easily attract more customers than his competitors because of the usage of such kind of third-party applications. As a store owner, it will depend on your shop type and product details if you can use any third-party application in your store.
Way 4- Arrange Exceptional Customer Service
When you are just trying to grab the attention of your existing customers, then you can not deny the importance of offering top-notch customer service to your clients. Your Customer service team should be like a true helper to your customer.
Customers will likely remain loyal to your company if they receive excellent service and a positive shopping experience. Provide prompt, professional service to your clients.
Adobe found that if customers aren’t receiving personalized communications from a company, 52% of them will look elsewhere.
The success or failure of a website and online store depends heavily on the user’s experience and customer service. When a customer is repeatedly asked to describe the same problem, they become increasingly frustrated. Furthermore, clients are more willing to leave after engaging in lengthy, repetitive interactions.
Provide the resources for agents in a customer service solution to readily access client data, review past interactions, and improve the flow of current ones.
Way 5- Make Sure Fast Delivery And a Flexible Return Policy
Customers who have a positive return experience are much less likely to shop elsewhere and are much more likely to make repeat purchases. The Pareto principle states that 20% of your recurring consumers can account for up to 80% of your profits.
You need a returns process that boosts customer loyalty and lifetime value. It’s important to have a well-defined return policy for your store so that customers know what to expect before purchasing.
Ensure your website prominently displays your return policy, and should be written in simple language. Customers are more likely to remain loyal to a business if they are aware of its return policy beforehand.
Furthermore, making returns simple and convenient increase client satisfaction and encourage repeat business. Customers may be dissatisfied with your business if the return process is simple enough.
You should provide consumers with pre-printed return labels with their orders or collaborate with a third-party location for things that customers cannot package themselves to be dropped off.
In 2022, Loop Returns performed a poll showing that companies with more liberal return policies kept more consumers than those with more strict rules.
Retain customers at Shopify is the key, so it’s important to use a variety of tactics to enrich the shopping experience and encourage repeat purchases.
You can retain customers on your Shopify store in various ways, including through personalization, email marketing, loyalty programs, and user-generated content. Providing quick shipping, low prices, and hassle-free exchanges.