Title Graphic for blog post How Do I Create And Measure An Effective Customer Retention Strategy for E-Commerce?

Table of Contents

How Do I Create and Measure an Effective Customer Retention Strategy for E-commerce?

Holding onto existing customers is much more cost effective than constantly acquiring new ones.

Of course, you already knew this. It’s why you’re here. The bigger issue is how to keep hold of your customers before they slip out of the net and go somewhere else.

On the face of it, it’s a tricky one. Consumers have more options than ever before and can shop anywhere they like. So why would they stick with just you?

Here’s how to create and measure an effective customer retention strategy for eCommerce.

Double Down On Customer Service

Research has shown that solid customer service now matters more to the consumer than even the product itself. In other words, if you can provide the most awesome customer service possible, you’ve got an excellent chance of holding onto your customers – and then some.

To that end, add a live chat to your website and social media. Live chat enables you to respond to customer queries instantly so that they get the answers they want when they want them. Moreover, when you use artificial intelligence-powered digital assistants, they learn about each customer with each conversation. This means they can move things forward faster and give the customer exactly what they want.

Go further, too. Send small gifts to your most outstanding customers, too. They’ll appreciate it. Failing that, a thank you note is a nice gesture as well.

Launch a Customer Loyalty Program

Loyalty programs are a great way to encourage customer retention. Why? It’s simple – the more rewards a customer receives, the more motivated they will be to keep buying from you.

Rewards make people feel good. When you give them something back in exchange for their continued custom, customers will feel good about you and keep shopping with you. It’s a profitable exchange that benefits everyone because, while you might lose out a tad in the short term, you’ll gain a whole lot in the longer term.

It’s simple enough to set up a loyalty program, and it’s up to you to decide what kind of program you want to create. You could keep things simple by offering points for each purchase, which customers can eventually redeem on a future item. Or, you might want to reward your customers for the different kinds of actions they take in your shop.

Meanwhile, here are some ideas on how to get creative with your customer loyalty program.

Launch a Referral Program

Instead of you spending all your time driving people to your store, why not get your existing customers to drive their friends? You can do this via a referral program. Not only will this encourage those existing customers to keep shopping with you, it has the potential to turn their friends into loyal customers, too.

A referral program also reduces the amount of money you spend on acquiring customers, too.

For example, you could offer customers X amount off their next purchase if they refer a friend who shops with you. Make sure the friend receives a discount as well.

Offer Discounts To First Time Buyers

Abandoned carts are a major problem for eCommerce stores. There are many reasons why a first time buyer might abandon their cart, and one of them is unexpected costs. If they arrive on the checkout page and find the total price is different to what they expected, they will bail out.

But it’s okay because you can get them back in the game and turn them into loyal customers by offering them discounts.

You can do this via an exit intent popup that offers customers a 10% discount, or you could retarget them with ads.

While offering a 10% discount can cost you in the short run, you again need to apply long-term thinking. Take the hit and focus on converting first-time buyers into loyal customers who keep coming back.

Personalise Everything

When customers receive emails that address them directly, they feel pretty darn good. Personalisation is a great way to build meaningful relationships with your customers. It might sound like a small thing to use someone’s name in an email, but it means a lot to the customer.

Make sure to use artificial intelligence to personalise your product recommendations, too.

Ask For Feedback

Lastly, no one knows your store better than your customers themselves. So ask them for feedback to learn more about what they like and don’t like. This not only encourages their loyalty by you showing them that you’re listening to them, it also ensures you’re able to improve the overall experience for everyone else – including new customers.

Find out why people would become loyal and then put into place a plan of action.

How To Measure Your Customer Retention Strategy

To make sure your customer retention strategy is effective, you need to measure it. Here are the key metrics you need to track:

Customer Churn Rate

This metric shows you how many customers you’ve lost over a set period of time. To measure it, divide the number of customers you’ve lost over a set period of time (say, a month) by how many you had at the start of the month. This way, you’ll know how many decided not to return.

Repeat Purchase Rate

Knowing how many customers made more than one purchase with you is key to knowing how effective your retention strategy is. To measure repeat purchase rate, divide the number of customers who’ve purchases from you numerous times in the past with the total number of customers you have.

Purchase Frequency

To find out how often the average customer buys from you, track this metric. To calculate it, find out how many unique customers have shopped with you over a certain time frame before dividing the number of orders they placed.

Average Order Value

This metric will give you an insight into how much the average customer spends on each purchase.

To Calculate it, take the total amount of revenue you’ve made over the last 12 months and divide it by the number or orders made at your shop.


This is how to create and measure an effective customer retention strategy for eCommerce. As you can, it isn’t too difficult. Rather, it’s simply all about looking after your existing customers and giving them more of what they want. The easier you make their life, and the more you reward and incentivise them, the more they will come back.

Get In Touch

If you’d like to find out more then you can get in touch with the GrowTraffic team by calling 0161 706 0012 or emailing info@growtraffic.co.uk. Alternatively, you can contact Aljaz directly on the details below.

About The Author

Aljaz Fajmut is a digital marketer, internet entrepreneur, and the founder of Nightwatch – search visibility tools of the next generation. Check out the Nightwatch blog and follow him on Twitter: @aljazfajmut

Home » Blog » How Do I Create and Measure an Effective Customer Retention Strategy for E-commerce?

Share this post