Christmas has been your busiest time of the year, attracting more sales, new customers and lots of spending. But, before you catch your breath and sit back with a glass of sherry (or two), have you thought about customer retention and turning your Christmas shoppers into regular customers?

What is customer retention

Customer retention is the process of encouraging customers to return to your online store to make repeat purchases regularly.

For most online sellers, the ideal is to have customers returning more often and increasing their basket value when they do. But depending on the product you sell and your target audience, good customer retention might look like a consistent weekly, monthly or even annual spend.

Why is customer retention so important

We don’t need to explain that having a customer return to your store and spend more is a good thing. But there are many other advantages to customer retention, including:

? Maximising your marketing ROI

? Avoiding price wars

? Customer happiness. 

Ultimately, it helps you become a retailer of choice, rather than necessity.

Why now is the perfect time for customer retention

New customers over the Christmas period may have been lured to your store because of someone else’s wish list, a Black Friday discount or a chance click.

Either way, you’re probably not the only online store they shopped from this Christmas, but you can be the only online store that makes an effort to retain them post-Christmas.

And we’re going to show you how.

How to measure customer retention

Before jumping into retaining new customers this January, you first want to measure your current retention rates. This enables you to check what’s working and what’s not working throughout the year.

There are multiple ways to measure customer retention in eCommerce, the top being:

Repeat purchase rate

Your repeat purchase rate is the percentage of customers who have made more than one purchase from you.

No. customers who made multiple purchases ÷ total number of customers (per period of measurement)

Purchase frequency

Your purchase frequency represents how often customers buy from your store, on average.

No. orders ÷ no. of unique customers (per period)

Other common calculations include customer churn rate, average order value and customer lifetime value. Whichever metric you use, the goal is to get customers buying from your more often and spending more when they do.

Customer retention strategies

Once you know what you’re measuring, it’s time to start implementing tactics to increase customer retention.

Again, there are plenty of strategies for improving customer retention online, the most effective being the following:

Outstanding service

No one is going to be returning to your online store if the service was pants. Simple.

The easiest and quickest way to boost customer retention is to make customers want to return to your store.

This means enhancing the customer journey with tactics including:

? Fast and free shipping

? Accurate inventory levels

? As-described products

? Easy communication methods.

Following up

Post-purchase thank you emails are a simple gesture, with big consequences.

Not only do they confirm the customer’s purchase and provide essential information, such as tracking details and order total; they also show customers that you’re thankful for their custom, you care about their happiness, and you want to keep them informed. In turn, this makes the customer feel valued and like their purchase makes a positive impact.

Loyalty programme

If you’re willing to put some money behind your customer retention strategy, then a loyalty programme can deliver outstanding ROI.

By incentivising repeat purchases with points, discounts and store credits, you can encourage customers to increase both order frequency and spend.

Enrol new customers immediately onto your loyalty program and award them some “new customer” points to hook them in immediately.

Referral marketing

Ninety-two percent of shoppers trust recommendations from people they know, which is what makes referral marketing such a great tactic.

By offering existing customers and their pal a reward for referring new customers, you can drive repeat purchases and customer acquisition rates at the same time.

Value add marketing

Of course, sending new customers a deal or discount to use on their next purchase is an obvious way to increase retention, but it’s also a great way to reduce your profits.

Instead of bombarding new customers with retention offers that could devalue your brand, why not send them something of value instead?

By value, we mean tips on getting to grips with their new product, information related to what they’ve purchased, or even how-to videos and guides. Anything that increases the value of their purchase and makes buying from you again look attractive.

Seeking feedback

If your retention rates aren’t increasing, do you know why? By simply asking your customers for feedback, you can identify any problems areas that might prevent someone from buying from you again.

In addition, seeking feedback shows customers that you care about the service they’ve received and helps to remind them of your brand, without overtly selling to them.


Finally, if you read our recent blog on eCommerce returns best practice, you’ll know that a generous returns policy can drive repeat custom.

By providing a fair and hassle-free returns window, you make customers feel safe when buying from you again.

And, if you offer exchanges, you can increase the original basket size and price.

Customer retention – final tips

Losing customers is a natural part of selling online, but, but implementing some of the above tactics and measuring the results, you can drive retention, improve service and gain new customers at the same time.

Good luck!

About Expandly

Expandly multi-channel management software powers brands to deliver a consistently outstanding customer journey no matter how many times they buy from you.

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