The ten Finest Buyer Retention Methods (That Are Tried and True)


Think about two manufacturers. 

Model A is one among your favs. You’ve purchased from them earlier than, you’re keen on their merchandise, you subscribe to their e mail newsletters, and also you get a tingle of anticipation every time you place an order.

Then there’s Model B, who you’ve by no means even heard of. They promote the identical sort of stuff as Model A at the same value level, however you’ve received no concept about their product high quality, buyer help, or the rest.

If I requested you which of them of the 2 you’re most certainly to purchase from subsequent, I’d wager my home you’ll say Model A.

Rationally, ecommerce entrepreneurs know it’s simpler to promote to current prospects than new ones. But many manufacturers are obsessive about new prospects, with one survey revealing that:

  • Solely 20 % of ecommerce professionals have a devoted finances for buyer retention
  • 63 % allocate extra finances to acquisition than retention

It’s time to vary that.

On this article, I’ll speak by way of every little thing you could learn about ecommerce buyer retention, from understanding its worth to calculating retention charges. And I’ll even share a retention technique instance or two (really, 10).


What Is Buyer Retention?

Buyer retention is the method of encouraging earlier prospects to proceed to make purchases out of your firm. They stick to you and don’t change to a different model.

Churn, aka after they go away your model, might occur for quite a few causes. They could have a poor customer support expertise, for instance.

Buyer retention differs from buyer acquisition. The latter means getting prospects which have by no means purchased from you earlier than to make their first purchases. Buyer retention is, due to this fact, a later stage within the buyer journey.

Customer Retention

At its core, buyer retention is about protecting prospects engaged, making a constructive expertise, and turning potential one-time patrons into loyal, long-term prospects.

Why Concentrate on Buyer Retention?

Buyer retention has a greater return on funding than acquisition. It’s cheaper and simpler to retain prospects than purchase new ones. Actually, it’s estimated that the price of buying a buyer is 5 to 10 instances better than retaining one.

What’s extra, retention leads to better buyer lifetime worth (CLV). Returning prospects not solely spend extra on common, however in addition they buy extra usually. Fifty-two % of consumers say they’ll exit of their approach to purchase from their favourite manufacturers.

52 Percent of Customers Buy from Their Favorite Brands

Lastly, loyal prospects are likely to advocate manufacturers they wish to their buddies and households. That is one other approach through which retention works out cheaper than acquisition. You purchase prospects at no added value by way of referrals.

Learn how to Calculate Buyer Retention Fee

Calculate your ecommerce retention price utilizing this formulation:

In different phrases, to calculate your retention price for the earlier quarter, you want three items of data:

  • The full variety of prospects at the beginning of the quarter
  • The full variety of prospects on the finish of the quarter
  • The variety of new prospects acquired by way of the quarter

Say you had 10,000 prospects in the beginning of the quarter and eight,000 on the finish. Alongside the way in which, you acquired 5,000 new prospects. That leaves you with the next calculation:

[(8,000 – 5,000) / 10,000] x 100 = 30 % retention price

How does that stack up in opposition to the competitors?

Nicely, in keeping with Omniconvert, amongst ecommerce professionals who know their retention price, a majority cited a price of 16 – 30 %. However that’s a fairly broad vary. And it’s value noting that comfortably the preferred response, with 31 % of votes, was “Don’t know.”

Number of Ecommerce Marketers who Know their retention rate Customer Retention Strategies

 So it’s onerous to get a repair on different model’s retention charges. However you may undoubtedly convey some much-needed context to your personal retention price by contemplating it alongside different ecommerce metrics, akin to:

  • Buyer lifetime worth
  • Buyer churn price
  • Repeat buy price

Right here’s get these numbers…

Learn how to Calculate Buyer Lifetime Worth

Buyer lifetime worth (CLV) describes the full income you earn from a single buyer all through their relationship together with your model. Calculate it utilizing this formulation:

I do know what you’re considering: “However I don’t know my buyer worth, or my common buyer lifespan. Assist!”

To get these numbers, you could run a pair extra calculations:

  • Common buy worth = Whole income inside a time interval / Variety of orders inside that interval
  • Common buy frequency price = Variety of purchases inside your chosen time interval / Variety of complete prospects in that interval
  • Buyer worth = Common buy worth x Common buy frequency
  • Common Buyer Lifespan = Sum of all buyer lifespans / Whole variety of prospects

Now return and plug these numbers into the CLV formulation above. Typically talking, the upper your lifetime worth, the extra repeat orders you’re producing—and the higher you might be at retention.

Learn how to Calculate Buyer Churn

Buyer churn is the yin to buyer retention’s yang, as a result of it speaks to the variety of prospects you’ve misplaced over a given interval quite than these you’ve retained. Calculating your churn price varies based mostly in your ecommerce enterprise mannequin:

Subscription-Primarily based Companies

It’s easy for subscription-based ecommerce companies to calculate the churn, as a result of it’s apparent when a buyer has ended their relationship with you: they canceled their subscription.

The formulation seems to be like this:

“Common” Ecommerce Companies

Issues get slightly extra hazy within the “common” (i.e. non-subscription) ecommerce world, as a result of there’s no technique to categorically state {that a} given buyer has churned.

They may place common orders month after month, drop off the radar utterly, then crop up once more a 12 months down the road.

Nonetheless, simply because there are a number of vagaries round “common” ecommerce churn, that doesn’t imply you may’t calculate it with a first rate diploma of certainty. It simply requires a pair preliminary steps:

  1. Calculate your common timeline for repeat purchases. How lengthy is the typical hole between a buyer’s orders? You could find this by taking a look at your repeat buy information and understanding the variety of days between every repeat buy.
  2. Group prospects into cohorts/segments. Construct buyer cohorts based mostly on the date of consumers’ first purchases. As an illustration, you would possibly construct a cohort of all prospects who positioned their first order in March 2023.

Now, you may provide you with (an honest approximation of) your buyer churn price by:

  1. Calculating your common repeat buy timeline and double it. So in case your common repeat buy timeline is one month, take a look at the two-month timeframe.
  2. Tally up the full variety of prospects in your cohort. So let’s say 2000 prospects.
  3. Add up the quantity of consumers in your cohort/phase who ordered once more (grew to become repeat purchasers) throughout that two-month interval. Let’s say it was 500 prospects.
  4. Subtracting them from the full variety of your phase. This leaves you with 1500 prospects.
  5. Diving the purchasers who didn’t repurchase (1500) by the full variety of prospects you began with (2000),  after which multiply it by 100.

So the formulation for calculating churn price is that this:

That appears sophisticated. Let’s plug in some numbers.

[(2,000 – 500) / 2,000] x 100 = 75 %

You may get extra refined outcomes by analyzing and evaluating several types of buyer cohorts, akin to:

  • E mail subscribers vs non-subscribers
  • Excessive spenders vs low spenders
  • “Legacy” prospects vs new prospects

Learn how to Calculate Repeat Buy Fee

Repeat buy price is the same metric to buyer retention price, as a result of it represents the proportion of your complete buyer base who’re loyal repeat patrons.

Not like churn price, it’s comparatively simple for any ecommerce enterprise to calculate their repeat buy price utilizing this formulation:

As an illustration, should you had 100,000 complete prospects in 2022 and 30,000 positioned two or extra orders, your repeat buy price could be:

(30,000 / 100,000) x 100 = 30 %

In keeping with Metrilo, the typical ecommerce repeat buy price stands at 28.2 %, though numbers differ considerably throughout totally different niches:

Benchmark Average Ecommerce Repeat Purchase Rate By Industry Customer Retention StrategiesThis isn’t shocking. When you promote high-ticket, long-lasting merchandise (like TV units), solely a small proportion of consumers will make a number of purchases inside a short while interval.

Nonetheless, for any ecommerce enterprise, no matter area of interest, a excessive repeat buy price will at all times be a good factor.

Buyer Retention vs Acquisition

Clearly, each ecommerce enterprise desires to develop its viewers and herald new prospects.

Nevertheless it’s turning into more and more tough to take care of an aggressive buyer acquisition technique. Between 2009 and 2022, common acquisition prices surged by 222 % — from $9 – $29 for each new buyer acquired — by way of a mix of things, together with:

  • The phasing-out of third-party cookies
  • The launch of iOS 14.5, requiring customers to grant permission for apps to gather and share information
  • Elevated laws round shopper privateness, akin to GDPR and CCPA

All of which implies it’s extra essential than ever for ecommerce entrepreneurs to take a customer-first strategy to acquisition, based mostly round constructing sustainable, long-lasting buyer relationships.

The ten Finest Ecommerce Buyer Retention Methods

Buyer acquisition and retention methods don’t must be mutually unique. As a result of what encourages prospects to purchase from you within the first place can additionally persuade them to maintain coming again for extra.

With that in thoughts, let’s check out 10 ecommerce buyer retention methods that can assist you drive repeat purchases and develop your buyer lifetime worth…

1. Analyze Why Clients Drop Off

When prospects cease shopping for from you, you don’t simply have to chop your losses. Work out the place within the buyer journey earlier prospects are likely to drop off, and you’ll treatment any points. 

It offers you the chance to win prospects again and forestall future prospects from leaving your model earlier than they even get to that time.

One technique to work out the place points within the buyer journey lie is to maintain observe of essential metrics. Ecommerce buyer retention metrics embody:

  • Buyer lifetime worth
  • Buyer retention price
  • Churn price
  • Refund and return price
  • Repeat buyer price
  • Subscription price

With helpful information and buyer insights, you can also make additional investigations and provide you with the proper options to buyer points. 

As an illustration, when you’ve got a excessive refund and return price, you will need to work out if there’s a difficulty with the product itself or maybe whether or not the product doesn’t match its description in your web site.

You might want to calculate essential metrics utilizing analytics instruments or formulation. Alternatively, go straight to the horse’s mouth to find why prospects drop off. In different phrases, collect and analyze buyer suggestions. 

As an illustration, you could survey prospects that haven’t bought from you shortly. Right here’s an instance from life-style model Fabeltics Males:

Fabeltics Men Email Examples

The corporate makes use of a fast and easy survey to ask earlier renters why they haven’t returned to the service.

2. Leverage Publish-Buy Emails

Use a post-purchase e mail sequence to encourage retention from the get-go. Publish-buy e mails set up belief and create a constructive buyer expertise that encourages earlier patrons to return.

One essential factor to recollect right here is that post-purchase emails are likely to have a better open price than your common e-newsletter, e mail blast, and so on. Clients are eager to search out out data on the standing of their order.

Which means post-purchase emails present the right alternative to spice up the probability of buyer retention when you have the shopper’s consideration. 

For instance, The North Face makes use of order affirmation emails to get prospects to enroll in its SMS checklist:

The North Face Email Example

Naturally, The North Face can use this data to take care of communication with earlier prospects and ship out related gives to encourage future purchases.

When you’re trying to get in on the motion, I like to recommend a sequence of 5 principal post-purchase emails. These are:

  1. Order affirmation
  2. Delivery affirmation
  3. Delivery standing replace
  4. Assessment request
  5. Provide or low cost to return

The final sort of e mail prompts the shopper to make a second buy out of your model. This helps to make your product(s) a staple want for the shopper.

Right here’s an instance from Brooklinen:

Brooklinen Email ExampleAs you may see, the corporate first gives prospects an incentive within the type of factors off their subsequent buy. Then it goes on to advocate merchandise that complement the earlier buy.

Brooklinen Email Example 2The corporate is subtly saying, use your low cost in opposition to these things. Fairly good, huh?

3. Work on Delighting Your Clients

It’s not sufficient to merely fulfill prospects — you could delight them.

In keeping with a research printed by the Affiliation for Client Analysis, completely happy prospects are keen to spend extra on the manufacturers they love. However the relationship between satisfaction and spending isn’t linear.

Slightly, it seems to be form of like an S-shape that’s concave for low satisfaction ranges, convex for top satisfaction ranges, and flat for medium ranges of satisfaction:

measuring_customer_satisfactionBecause the researchers put it: “Which means solely extremely happy prospects are keen to pay extra and really dissatisfied prospects are undoubtedly not keen. Reasonable ranges of satisfaction don’t improve a buyer’s willingness to pay considerably.”

So delighting your prospects gained’t simply provide help to retain them — it gives a bunch of potential revenue-related advantages, akin to larger:

Top-of-the-line methods to thrill loyal prospects is to supply a VIP program that rewards prospects for making purchases together with your model, making a reciprocal relationship that has excessive worth for either side.

To do it properly, you first want to ensure your VIP program has an air of exclusivity. Take this instance from Savage X Fenty’s Xtra VIP Membership:

Savage X Fenty’s Xtra VIP Club

Solely VIPs get entry to gadgets hand-picked by the queen herself, Rihanna. Now, if that isn’t engaging, I don’t know what’s.

Additionally, you need to make sure that your rewards are one thing your prospects really need. Sure gifted merchandise, for instance, will attraction to some however not others. 

A approach round this problem is to supply a points-based reward system the place prospects get to decide on the rewards for themselves, as on this instance from Cotton:On:

Cotton On Customer Loyalty Program

One greenback equals 1 level, and prospects can redeem these factors in opposition to any merchandise they need.

The concept is to create a relationship with prospects by way of a extremely interesting, personalised expertise. Then you definately’ll get them to maintain coming again to your model for extra.

4. Provide Ongoing Buyer Help

Make certain prospects have an incredible expertise together with your product throughout your complete journey. 

If the standard of your product isn’t as much as scratch, they gained’t purchase from you once more. Nor will they make a repeat buy if they’ve a sub-par customer support interplay, and so forth.

The excellent news is you may nonetheless win unhappy prospects again if one thing goes fallacious. Do that by providing quick and useful buyer help. You possibly can also have a contact type pop up routinely when customers browse your assist pages, which could look one thing like this:

Sleeknote Form Submission ExampleThese little touches make an enormous distinction to the shopper expertise.

It’s additionally a good suggestion to supply help earlier than the shopper even realizes they want it. This ensures they gained’t run into any roadblocks that stop them from shopping for from you sooner or later.

You are able to do this by sending out related, useful content material at essential factors within the buyer journey. 

The White Firm, as an example, sends out a fast and simple setup information by way of e mail when individuals purchase their air purifiers for the primary time:

The White Company Email ExampleThe purpose is you need individuals to begin utilizing your product, not simply neglect about it. However not solely that, you need them to make the perfect use of your product they probably can. This additionally means it turns into part of their each day life, and so they’re extra more likely to come again for extra. 

Any enterprise can do one thing like this. Let’s say, as an example, you promote artisan olive oils. It could be a good suggestion to proceed to ship out recipes that make use of your oils.

5. Re-Interact Earlier Clients with a Product Replace

Although successful again prospects is feasible, that doesn’t imply it’s simple. Most shoppers are conversant in the comical win-back emails corporations ship out as of late. You realize, the bizarre, pseudo-romantic ones. *Cringe*

Clients are used to that outdated trick by now, so it’s not sufficient for them to present your model a second probability. What do you do?

Show to prospects that you just’ve improved in your product and/or service. You’ve listened to buyer suggestions and have really performed one thing about it. That is the place product replace emails are available.

Right here’s an instance from Outside Voices:

Outdoor Voices Email ExampleOutside Voices explains how the corporate has added the merchandise that prospects requested for. 

It is a excellent instance of how one can show to prospects that you just’ve added what was lacking out of your product. You possibly can ship an e mail like this and invite prospects to get again on board if they want.

It’s additionally a good suggestion to ship product replace emails if you add to your product line or providing. If someone has bought from you beforehand and likes your model, they’ll be more likely to come again and buy from a brand new class.

As an illustration, MeUndies is well-known for its underwear however despatched out this e mail after they began providing robes and slippers, too:

MeUndies Email ExampleYou are able to do one thing just like encourage repeat purchases out of your retailer.

6. Provide a Customized Buying Expertise

If you wish to retain prospects, you must provide them a customized expertise. It’s customary as of late, and prospects adore it.

Forty-four % of shoppers say they’re more likely to turn out to be repeat patrons after a customized procuring expertise.

However bear in mind, personalization goes past together with a buyer’s title in an e mail. Anyone can do this. Ecommerce shops are arising with tremendous modern methods to personalize the procuring expertise.

Some vogue and beauty manufacturers, as an example, at the moment are providing digital attempt-ons. Clothes model Farfetchpartnered with Snapchat to do that for its prospects.

Farfetch Snapchat CollaborationClients stand in entrance of their telephone cameras and say one thing like, “Present me a blue t-shirt.” The superior tech then maps it onto their our bodies in a sensible method.

However, by way of personalization, you must do what is sensible to your prospects. Perhaps they’re not Snapchat customers, as within the above instance. You realize your viewers finest (or you need to at the very least), and what issues to them. 

7. Change into a A part of the Buyer’s Life-style

Have you ever ever heard of the time period “sticky product”? No, we’re not speaking about when your child grabs the good speaker with their jam-covered palms. 

Slightly, it’s about making a product so ingrained in someone’s life-style that they should hold coming again for extra. We normally speak about it within the tech world, however the sentiment applies throughout the board.

One technique to make your merchandise sticky is to make prospects really feel like they’re a part of a group. This usually boils all the way down to them being a part of some form of better mission. 

The garments at passionfruit, as an example, are designed and created by members of the LGBTQ+ group for members of the group and allies. 

passionfruit About PageThose who take into account this essential will proceed to purchase from this model regardless if they’ll discover a related hat elsewhere that’s cheaper. Why? As a result of they need to be part of this mission.

One other technique to make your product sticky is to supply individuals one thing they’ll’t discover elsewhere. As an illustration, it could be a novel design or a very modern product. 

Spacestor, for instance, gives signature, modular workplace furnishings.

Spacestor Signature Storage WallA direct-to-consumer (DTC) strategy makes this sort of factor simpler. The reason being you design and manufacture merchandise your self based mostly on prospects’ exact wants and wishes. 

8. Construct a Neighborhood Round Your Model

Model communities are an underutilized retention technique—but they are often extremely efficient. Certainly, 66 % of branded communities say the group has had a constructive affect on retention, whereas 58 % say their group has elevated buyer loyalty.

It’s simple to think about how making prospects really feel deeply invested in your model encourages them to stay round. However how do you construct such a group?

One strategy is to debate your model story. Over four-fifths of shoppers want a model’s values to align with their very own, so it is sensible to clarify how you bought began and what you hope to attain (past “creating wealth”), similar to Mojo does right here:

Mojo Brand Values Customer Retention Strategies

This e mail has better credibility as a result of it’s written by (or at the very least attributed to) the corporate’s co-founder. And it’s additionally actionable, as a result of it incorporates a reduction code for first-time patrons:

Mojo Discount Customer Retention StrategiesThat’s an ideal recipe for serving to new prospects really feel purchased into your model—like they’re a part of a group.

9. Use Knowledge to Higher Perceive Your Clients

In keeping with Accenture, 91 % of shoppers usually tend to store with manufacturers that:

  • Acknowledge them
  • Bear in mind them
  • Present them with related gives and suggestions

To do all that, you could perceive your prospects by digging into the info. Have a look at their searching habits, the content material and gives they’ve engaged with, and the merchandise they’ve considered (and bought) to serve them with promotions and suggestions that completely match their preferences.

Equipment model Bellroy will get it proper by sharing curated product collections, incorporating a topic line that makes it clear these suggestions are personalised to the shopper’s tastes:

Bellroy Customization Customer Retention StrategiesEven should you weren’t planning to make a purchase order, there’s a great probability you’d discover the gathering simply to see what Bellroy has chosen for you.

10. Create a Referral Program

I’ve received some dangerous information for entrepreneurs: simply 38 % of shoppers belief advertisements as a supply of name or service data, whereas solely 51 % belief social media platforms.

So what do they belief? Family and friends.

Trust in Brand Customer Retention StrategiesThat’s proper; phrase of mouth is seen as essentially the most dependable supply of data and suggestions. And probably the greatest methods to leverage it’s to begin a referral program.

The concept behind referral advertising and marketing is fairly easy: you reward prospects for recommending your merchandise, sometimes by giving them a reduction code to share with family and friends.

But many manufacturers get it fallacious by including a bunch of sophisticated phrases and situations or forcing prospects to leap by way of too many hoops.

Plus-size vogue model Torrid nails it with this referral e mail:

Torrid Referral Email Customer Retention StrategiesNot solely do prospects get the nice and cozy, fuzzy feeling of sharing a 40 % low cost, however they additionally obtain a present card for his or her troubles. That makes it properly value sharing the love.


Retain Extra Clients With Drip

From sharing personalised product suggestions to analyzing the the reason why prospects churn, most of the methods on this article depend on constructing an in depth understanding of your viewers.

Drip offers you the info and instruments to make that occur.

Our segmentation instruments convey collectively all of your retailer, customer, and advertising and marketing information, serving to you group prospects based mostly on their habits and the way they have interaction together with your content material.

All of which helps you construct stronger relationships together with your finest prospects (and win over those that aren’t so satisfied).

Discover out for your self by signing up to your 14-day free trial immediately!


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