9 Effective Customer Retention Strategies for Your E-commerce Startup

Effective Customer Retention Strategies for Your E-commerce Startup

Do you know that loyal customers are 23% more likely to spend money with you? While bringing in new customers to your e-commerce store is vital, retaining your customers gives your online store real profit. 

But the question is, how can you retain loyal customers to your e-commerce brand?

Before we walk you through the essential customer retention strategies that you can apply to your e-commerce startup, let’s first cover the basics. 

What is Customer Retention?

Customer retention is the ability of an e-commerce store to retain or encourage its customers to purchase at a given time. It is one way of motivating customers to return to your site and frequently make purchases. 

A higher customer retention rate can benefit your e-commerce site. That’s because it increases your customer’s lifetime value. Because higher CLV means they have spent a lot to buy your products and services.

In addition, retaining customers can help you save money on buyer acquisition. 

Meanwhile, customer retention strategies are the methods you use to retain your e-commerce customers effectively. Since returning customers have higher conversions, it helps you grow your e-commerce store online. 

Listed below are a few benefits of having a solid customer retention strategy:

  • Increase brand awareness
  • Helps boost customer recall
  • Builds brand loyalty
  • It helps improve conversions and sales
  • E-commerce strategies are much more cost-effective.

9 Best Customer Retention Strategies for Startups

We have listed the nine best customer retention strategies that startups can employ:

1. Analyze Churn Rate

You must analyze and monitor the churn rate to know its reasons. Churn refers to how many customers stopped buying from your online store for a certain period.

To calculate your e-commerce startup’s churn rate, divide the number of churned customers by the total number of customers. 

Churn rate = (Number of churned customers / total number of customers) * 100.

On average, churn rates can go from 2-8% of your monthly recurring revenue. But for startups, the churn rate can range anywhere between 4-24%. 

2. Set Customer Expectations

Ideally, it would be best to give your customers something to look forward to. Excellent customer service is more than just attending to your customers’ inquiries and concerns. You also need to fulfill their expectations. But sometimes, it’s hard to satisfy someone that you hardly know.

That’s why you need to understand their desires and what motivates them, and then use these pointers to set expectations. As you set out to meet your customers’ expectations, you’re empowering them in many ways. 

3. Run Promotional Email Campaigns


Chances are, your customers have already invested in you. An excellent investment that you can make in your customers is promotional codes and discounts. This makes them feel that they’re availing of an exclusive offer.

If you want to encourage them to act quickly, make sure you place an expiration date on the offer. 

4. Send a Company Newsletter


Another simple yet cost-effective way to retain your customers is by sending them your company’s newsletter. You can use email automation tools in sending these updates and offers all at once. 

You can even send emails via an RSS feed at a designated frequency. That way, you don’t need to update the content manually or think about remembering to click “send.” 

Although relatively simple, newsletters are a way to remind your customers about your brand every time they open their inbox. 

5. Create a Communications Calendar

A communications calendar works differently from your editorial calendar. That’s because the former tells you exactly when you should be getting in touch with customers.

Depending on your budget, you can send surprise gifts to loyal customers. 

You can do so by immediately keeping in touch with them as soon as they make a purchase. Every time buyers shop online, they check their inbox for updates on their orders, discounts, and other promotions. 

6. Build Customer Loyalty Programs


Consumers choose to be loyal to businesses that allow them to achieve their goals. So, if your competitor gives them a better offer, then they’re more likely to take it. 

That’s precisely why you should create your customer loyalty program. This will reward your customers for their loyalty to your brand. This is also an excellent way to show your customers that you appreciate them and one of the most effective ways to build a loyal following over time. 

Also, rather than just simply offering the products and service, give them the experience. Loyalty programs allow you to deliver more value to your customers. It shows them that you share the same values as them as well. 

7. Be Active on Social Media

A social network is a robust platform that allows you to connect with your customers, both new and existing ones. It also allows you to reach a diverse range of customers. 

You can use it to share your products online and create brand culture by engaging in a conversation with them. 

8. Offer Convenience

Offer convenience to customers in several ways. Ideally, you want your customers to have the same convenience of opening your site as a mobile app. This allows your customers to become more engaged. 

In the same way, you should be offering customers several payment options that they can choose from. Free shipping is also a great way to go. 

9. Give More Attention to Reviews


It’s also great what your customer needs are. You need to make sure that these needs are met and sort out issues if there are any. 

App development is a great way to make the best out of these reviews and the point of view of your customers. 

Over to You

There is nothing wrong with attracting new customers to your e-commerce startup. However, customer retention can help you maximize your marketing and buyer acquisition budget.

Either way, acquiring new customers and engaging existing ones entails building meaningful relations with your consumers. This includes educating your customers about what you do as a brand, 

That way, you can compel them to trust your brand and buy what you offer. As a result, you can boost your e-commerce startup’s revenue.

Juliette Anderson

Juliette Anderson

Juliette Anderson is an Outreach Community Specialist for an e-commerce fulfillment company that specializes in partnering with online sellers who have an average parcel weight of 5+ pounds or greater. She has worked hand-in-hand with e-commerce stores to achieve optimal sales for four years already. Her specialty lies in social media marketing and paid promotions.

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