Skip to main content

Finding creative ways to increase customer retention can help grow your eCommerce business. In the eCommerce world, consumers have an unlimited amount of access to products and services. Without human interaction, it can be difficult to retain customers or educate them on why they should do business with you. So how do you increase customer retention while growing revenue in the eCommerce space?

Why is customer retention important for eCommerce businesses?

Customer retention is extremely important for any type of business. Restaurants, clothing stores, and even gas stations do everything they can to make sure that their customers are loyal and that they return time after time. This idea of customer retention is especially important for an eCommerce business. For an eCommerce business, a slight increase of customer retention by 5% could see an increase of profits by anywhere from 25% to 95%. For all business owners, there is a general rule that you may learn in business school or find out through your experience. The general rule is that 20% of your customers will bring in 80% of your total revenue. Repeat customers are not only important for increasing profits and generating revenue, they are also important because they can be your best advocate. Satisfied and loyal customers are more likely to recommend your business to their friends and family and on social media. Essentially, by building a loyal customer base, you are building a small army of advocates that do not directly take money from your marketing budget, who will fiercely defend and recommend your products. 

Another reason why customer retention is so important for an eCommerce business is that acquiring new customers is much more expensive than taking care of your loyal customers. It is estimated that acquiring a new customer who then turns into a loyal customer can cost up to 16 times more than simply nurturing an existing one. Although you will want to strive to add new loyal customers to your customer base, you will want to make sure you take care of your existing loyal customers. A small eCommerce business owner can become too focused on advertising to new customers to acquire growth that they begin to lose some of their existing customers. This is short-sided. The key to long-term and stable profitability for any eCommerce business is to maximize the number of repeat purchases and to retain the highest percentage of existing customers possible. 

It is for these reasons why it is extremely important for an eCommerce business to pay close attention to their customer retention metrics and to make adjustments to ensure positive results. The customer retention metrics that any eCommerce business owner will want to pay close attention to are the repeat customer rate, purchase frequency, and the average order value. The repeat customer rate shows you how many of your customers have returned to your website for at least a second time. The purchase frequency metric shows you how many purchases a customer makes through your website. The average order value is a metric that you will want to improve over time. Once you have repeat customers coming to your website to make frequent purchases, how do you increase the overall value of their orders? By paying attention to these three main customer retention metrics, you can see if your marketing efforts to increase customer retention are effective or not. 

What are the benefits of eCommerce customer retention strategies?

There are many benefits to implementing e-commerce customer retention strategies. The main benefit is building a loyal customer base that will make frequent and repeat purchases which will increase your profitability and help your business generate revenue. It is estimated that an eCommerce business is 40% more likely to sell to an existing customer than they are to convert a new customer. Aside from these types of statistics of how repeat customers potentially generate the most revenue and increase profitability, what other benefits can be seen by implementing e-commerce customer retention strategies? Let us take a deeper look at a few benefits that can come from focusing on retaining customers.

  • Return customers are more profitable: It is estimated that return customers can generate on average 23% more profit than the average customer. However, it is important to know that a satisfied customer only comes back to a business if that business can build brand loyalty. It is not enough to simply give a customer a good first-time experience, they need to be encouraged to return the implementation of customer retention strategies. 
  • Return customers provide more feedback: Loyal customers are much more likely to leave feedback, write product reviews, and/or complete customer satisfaction surveys. The means for an existing customer to leave feedback should be simple, quick, with a focus on quality over quantity. A few good product reviews are much better than 10 vague reviews. That being said, a product that contains at least five quality customer reviews is 270% more likely to sell than a product with no reviews. You may want to encourage existing customers to leave their reviews by incentivizing the process. By offering special promotions or discounts in exchange for leaving feedback, you could potentially increase the number of quality reviews on your website and on social media. 
  • Loyal customers make good advocates: A loyal customer who is always satisfied with their experiences may be more willing to recommend your products to friends and family as well as answer questions from potential new customers on social media. For example, someone in a Facebook group may create a post looking for product suggestions to solve a particular dilemma they have. A loyal customer who has had great experiences with one of your products is much more likely to chime in and recommend your business. 
  • Return customers are cost-effective: It takes far less advertising dollars to encourage a customer to make additional purchases than it does to acquire a new customer. 

These are just a few of the many benefits that having a strong customer retention program can bring to your business. You should still always work on acquiring new customers, but try not to lose focus on your existing loyal customers in the process. 

Effective tips to increasing customer retention

There are many ways to increase customer retention for your ecommerce business. Loyalty programs, special offers, personal correspondence, and encouraging customers to follow your social media profiles, are all effective ways to increase retention. Since customer retention is so important to an online business, here are a few more tips on how to increase your customer retention. 

  • Use social media to nurture your customers: Give incentives to your customers to follow your business’s social media profiles. Create engaging content, promote new products, and offer exclusive discounts and promotions to your social media followers. Create an online presence and community of loyal customers. 
  • Email marketing: Trigger-email marketing is a productive way to advertise to customers who have already made at least one purchase on your website. Sending out targeted emails at the right time can increase open rates and click-through rates. 
  • Customer loyalty programs: Customer loyalty programs can be an effective tool to encourage repeat purchases. Reward your loyal customers and they will reward your business with all the benefits that come with having a loyal customer base. 
  • Coupons/promo offers: By including coupon codes and promo offers in your email marketing campaigns, you can ensure that your repeat customers feel special since they are receiving an incentive that is exclusive. 

Again, these are just a few of the many ways to improve your customer retention. One more simple and effective way to retain customers is to simply listen to them. What do they like about your products? What do they not like? Do they wish your business could also offer something you may not currently offer? Listening to your loyal customers is a way to make them feel appreciated and that you value their input, but it is also a way to grow your business by expanding into new markets and avenues you may not have realized unless you heard it from your customers. 


As an eCommerce business you can achieve impressive customer retention rates. However, just like any business, you will need to work for it. You will need to stay in front of your customers and treat them right. Finding more ways to connect to customers in a valuable way can help improve retention. As your eCommerce business grows, you may need to stock more inventory. If you do not have the right inventory levels, you may miss out on sales. In addition, you may be able to purchase inventory for a cheaper price if you order more volume. Regardless of the situation, eCommerce businesses often need to use inventory financing. Qualifying for inventory financing may be a challenge. Affording inventory financing may also be a challenge. Kickfurther is the world’s first online inventory financing platform that enables companies to access funds that they are unable to acquire through traditional sources. We connect brands to a community of eager buyers who help fund the inventory on consignment and give brands the flexibility to pay that back as they receive cash from their sales. This alleviates the cash-flow pinch that lenders can cause without customized repayment schedules, allowing your brand to scale quickly without impeding your ability to maintain inventory or financial flexibility.

Discover affordable inventory financing. . . visit Kickfurther today!

Copy link
Powered by Social Snap