7 Customer Retention Strategies for E-Commerce (2025)

October 31, 2023
11 mins read

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Customer retention strategies for ecommerce business

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Have you ever thought about why customers often keep coming back to Amazon to spend more and buy more? Or, how does it manage to retain a high percentage of customers despite so much intense competition in the e-commerce industry?Well, to find the answer, we first need to understand the kind of ecommerce customer retention strategies it employs. We also need to realize how much of Amazon’s success lies in its customer-centric approach. It offers a highly convenient shopping experience to customers and complements it with a fast delivery option to make buying easy and fun. In addition, it offers prime membership to customers, gives a broad product selection, and wins them over with competitive pricing. Above all, Amazon’s customer retention strategies for E-commerce are superior to other players in the market as it uses data and algorithms to personalize the shopping experience for each customer. On top of that, it offers fast 24/7 customer service and implements easy returns. If all that was not enough, Amazon offers various subscription services aimed at encouraging customers to purchase more and become loyal. These factors have played a big role over the years in building trust among customers who get retained more. From the example of Amazon, it’s amply clear that retaining customers for an ecommerce company is often the result of many factors coming together and adding value to the shopping experience of customers. In this blog, we will explore e-commerce customer retention, analyze various strategies, and see some examples as well. But first, let’s get started with understanding the benefits of using e-commerce customer retention strategies…

Stats on Ecommerce Customer Retention

The ecommerce industry is very competitive yet good retention strategies can have an impact on earning loyal customers. There are many companies that know how to win and retain customers by offering them great services and ease of shopping.

Here are some key stats on ecommerce customer retention –

Average ecommerce retention rates typically stand somewhere between 15% to 30%. ( Shopify.com)
Cart abandonment is a big deterrent to customer retention and the average abandonment rate is 70.19% (Baymard Institute).
Customer retention matters because the probability of selling to existing customers is 70% which is three to four times more compared to selling to new prospects. (Source: Invesp)
75% of customers say that loyalty programs are a key factor in their purchase decisions and subsequent retention.

Benefits of Ecommerce Customer Retention Strategies

We know that winning a new customer is way more costly than retaining the existing one. If you want to grow your business, you should focus as much on acquisition as on retention. In fact, an e-commerce business can gain more if it focuses more on retention than acquisition. Here are some of the benefits of employing ecommerce customer retention strategies –

Increased customer lifetime value – A business that retains existing customers is able to achieve higher customer lifetime value (CLV). When a customer is retained, it also ensures repeat purchases and upselling, and both are key contributors to revenue growth.
Reduced expenditure on customer acquisition – An ecommerce company that uses retention strategies can avoid spending heavily on customer acquisition. It can also save considerable costs on marketing and advertising that would rather be spent on serving the existing customers.

benefits-of-customer-retention-strategies

Higher profit margins – Retained customers not only make repeat purchases but also ensure a steady flow of revenue for the business. They spend more and show less sensitivity to price, so a business can offer premium products and charge more. All this could ensure high-profit margins.
Valuable feedback – The feedback that retained customers provide matters more in terms of value as it can tell about areas of improvement in your products or service. Based on the feedback, your e-commerce company can offer better experiences and more value to customers.
Reduced cart abandonment – Cart abandonment is always a big challenge for ecommerce companies. However, using customer retention strategies can help minimize cart abandonment and recover potential sales.
Lower churn rates – Ecommerce customer retention strategies can help reduce churn rates, therefore allowing businesses more customers. When the churn rate is low, it reflects well on the profit and revenue.

Customer Retention Strategies for E-commerce

Retaining customers is vital for the success and growth of an ecommerce business. However, you first need to serve customers well and win their confidence before thinking of retaining them. There are a variety of strategies that your business can use to retain customers and some of them are listed below –

1. Create a comprehensive customer retention plan

If your ecommerce business wants to retain customers, you need to have an elaborate strategy in place. With a comprehensive retention plan, it becomes easy to get repeat business and build long-term customer relationships. A robust plan can help you not only retain your existing customers but also drive sustainable growth over time. You however need to understand that retention is an ongoing process and it takes a continuous investment of time and effort. An ecommerce business that wants to achieve good retention rates must be ready to provide value and great services over time.

How to create a customer retention plan?

Understand your customer base and then segment them based on their behavior, demographics, and purchase history
Identify the purchasing habits of your customers and set clear retention targets based on that
Focus on personalizing and customizing the shopping experience for each customer
Devise a plan to engage with customers through different channels

2. Use customer-centric data to tailor your marketing

Data is key to understanding customers better. When you have customer data, you can know their tastes and preferences inside out, driving your marketing efforts accordingly. You can get data in two ways –

Collect data directly from your customers
Track their behavior on your site or app and get data

With data in hand, you not only understand the needs of your customers better but can also offer them personalized experiences. More so, the data you have gathered will be vital for boosting customer engagement and tailoring your efforts specific to their needs and interests.

Tips to collect customer data

Keep a constant track of customer’s purchase history
Regularly ask them for feedback
Engage and segment customers based on the different sets of data
Identify and then target your high-converting customers

3. Offer personalized communication to your customers

Offering personalized communication is key to customer retention for an ecommerce enterprise. It not only enhances customer experience with the business but also fosters loyalty and increases the chances of repeat purchases. The purpose of personalized communication is to tailor your messages to customers, make engagement more personal, and make them feel valued. When messages and communications are tailored to the specific needs of customers, it helps in building stronger relationships and driving revenue for your online store.However, an ecommerce business can never personalize customer experience unless it collects customer data and segments audiences based on behavior and characteristics. More so, it’s equally important to leverage the past purchases and browsing history of customers to serve them in tune with their exact needs.

Tips to offer personalized communication to customers

Gather as much data as possible on customer preferences and interests to personalize their experience at each stage of the journey
Send customized email campaigns based on the specific customer segments
Drive more engagement by showing personalized product and content recommendations on your website
Set up triggered or automated messages based on customer’s specific behavior

4. Send email campaigns with promotional offers

When an ecommerce business takes steps to incentivize customers to make a purchase, it witnesses an improved retention rate. Sending email campaigns with promotional offers is one such step as it works as an incentive for customers to make a purchase. Doing this can not only improve customer retention but also increase sales and drive business growth. Using promotional offers strategically is also key to understanding and engaging with your customers better. More so, promotional offers such as special deals and discounts also influence buying decisions, resulting in a boost to sales. Email campaigns with promotions also encourage customers to return to your store over and again and make repeat purchases.

Benefits of sending email campaigns with offers

It can help your business engage customers who did not engage earlier
Promotional offers can reduce the barriers to purchase and ensure higher conversion rates
You can expand the customer database by sending promotional emails
Such emails and offers can help create buzz about new products or sales and drive sales

5. Introduce a customer loyalty program

We are already aware of how retaining customers is often more cost-effective than acquiring new customers. So, for your ecommerce business, the primary focus should be on customer retention through strategic loyalty programs. This will help you encourage existing customers to continue shopping with you, which in turn, can reduce churn and increase CLV. One of the benefits of offering loyalty programs is to create an incentive for customers to stick with your brand and return for additional purchases. When you offer customers a chance to earn points, get discounts, or have access to exclusive products, you basically drive the retention rate for your business. More so, the average transaction value goes up when an ecommerce business offers customers rewards and incentives. Above all, a well-planned loyalty program can establish a stronger connection with customers and your brand over time.

Why offer a loyalty program?

It helps you earn more loyal customers over a period of time
Such programs are also key to collecting valuable customer data regarding preferences and behavior
Loyalty programs can be used to create upselling and cross-selling opportunities

6. Create a social media marketing strategy

Social channels are one of the key drives of ecommerce customer retention these days. You can leverage the power of social media to drive engagement and boost repeat purchases, thereby improving the retention rate. First of all, you need to understand your audience on social media and then tailor your content to their specific needs and behavior. More so, the focus of your social media marketing strategy should be on driving engagement through value, information, and entertaining content. Apart from content, your ecommerce business can also target social media followers through promotional offers. This is how you build authority in the domain and win over your audience.

Tips for social media marketing strategy

Ask your customers to share their experiences with products on social platforms
Create interactive contests and challenges to boost user participation
Leverage polls, surveys, and live sessions to engage with your followers on a regular basis
Use retargeting ads on social media and maintain a regular content-positing schedule

7. Run a customer referral program

Running a customer referral program can help your ecommerce business get new leads and also reward your customers. These two benefits make a referral program more beneficial than some other forms of marketing. More importantly, it costs way less than other marketing channels and generates quality leads as well. By running a customer referral program, you can leverage the power of word-of-mouth marketing where your satisfied customers can help you win new ones. To make your referral program successful, it’s important to clearly define your goals and be sure whether you want to boost sales or expand your customer base. It’s equally important to select appropriate incentives such as cash rewards, discounts, etc. so that you can attract and motivate customers to join the program.

Tips for customer referral program

Put in place a simple referral process with clear terms and conditions
Promote your programs through various marketing channels so that more customers become aware of it
Give unique referral codes or links to each customer and monitor the performance of your program

Support Your Ecommerce Customer Retention Strategies with REVE Tools

Engaged customers are always good for the health of a business. They not only make repeat purchases but also get retained easily. However, it takes continuous effort to retain customers and keep their interest in your product or service.We, at REVE Chat, offer a variety of engagement tools so that you can achieve your retention goals and provide great services to customers.You can use our AI-powered chatbot and automate tasks across sales, marketing, and support. The use of chatbots can help you offer quick replies to customers. Similarly, we have video chat and co-browsing software for visual engagement. Our live chat software can be paired with the chatbot to offer the best of hybrid support and boost the level of engagement.

Conclusion

Customer retention is key to success for an ecommerce business. The more customers you retain, the more your business will grow. With REVE Chat, you find top-class customer service tools to engage customers better and retain them over time.You can sign up and check our tools for your business.