Importance of eCommerce Retention Rates
The truth is appalling.
Shopping apps end up losing customers faster than they acquire them.
Statistically speaking, 25% of all apps get used only once before being discarded.*
Losing customers is a double whammy: you lose out on potential revenue while also losing out on all the money you spent on acquisition. Clicks and conversions come along with a hefty price tag. Without focusing on retaining current customers, chasing acquisitions is a losing strategy that results in low customer lifetime value, low rates of growth, and low brand loyalty.
This is every eCommerce marketer’s nightmare and we’re here to help with a holistic plan to nurture customer retention at every stage of the customer lifecycle.
But before that, we need to answer an important question.
Why is retention rate so important?
Retention compounds in value. A small boost in retention can help improve repeat purchases and the average order value, resulting in higher customer lifetime value. Also, for eCommerce, like most businesses, it is more economical to get an existing customer to purchase than to convert a newly acquired customer.
Here are some ways eCommerce brands can boost their customer retention rate:
- Offer a personalized user experience
Customers want to be acknowledged and feel special. A generic message blast doesn’t work anymore. Customers expect brands to proactively provide them a personalized shopping experience.
Improve the user experience right from the first app launch by sending individualized product recommendations to the customer. Leverage channels like email, push notifications, SMS, and in-app notifications, to build a richly personalized user experience.
Start by gaining a deeper understanding of your users. This means exploring beyond simple demographics, to understand technographics, psychographics, and user intent.
- Segment Your Audience
Effective segmentation helps you separate your audience into groups. You can then target each of these segments in ways that elicit a meaningful response from each of them.
You can segment users based on their past actions or inactions, or on the basis of their future intent. An effective way to segment users is based on how recently and frequently they’ve interacted with your brand, and the monetary value of their transactions. A RFM segments users into 10 segments including loyal customers, at-risk customers, and customer segments that need attention.
- Want loyal customers? Create a loyalty program
Loyalty programs, when done right, are a sure shot to drive repeat purchases and turn one-time shoppers into frequent customers. Additionally, they help customers to build a relationship with your brand. Sephora’s Beauty Insider Rewards makes it easy for customers to earn points for every dollar spent, which can then be used to obtain more products, thereby leading to more rewards.
On Sephora’s mobile app, these rewards are organized into point groups, enabling users to easily navigate to their point level. Additionally, users in the program receive a birthday gift annually, free beauty classes, access to a community of vocal recommenders, and two free samples with every order.
4) Make Shopping More Fun with Gamification
Gamification works wonders when it comes to acquiring, converting, and retaining customers. Gamification can also improve the customer experience and lift customer satisfaction scores.
Woot offers a limited quantity of products at a special sale price. This encourages users to race through the product pages and check out before the item sells out. By fostering curiosity and a sense of urgency, Woot gets users to make a daily habit out of checking the app at midnight to score a great deal.
5) Top of Mind Recall with Retargeting
Users often search for a product and they don’t end up making a purchase. Shopping cart abandonment is quite common in the ecommerce world. Be it repeat, loyal customers or first-timers, not every search ends up in a purchase. Retargeting is a great way to reach these users when they’re on other sites. A retargeting message usually contains details of the products they were interested in or had added to their cart.
Acquiring users and considering your job done is foolish. Your success lies in carefully engaging and retaining them over the long term.
CleverTap’s all-in-one engagement platform helps marketers boost retention and average order values. The platform offers a complete suite of solutions that engage customers across the entire customer journey. Leading ecommerce brands including 7-Eleven Philippines, Carousell, Nykaa, TataCliq, and more boost their engagement and retention rates with CleverTap.
For More Information: Click Here