I often see businesses more concerned about getting new customers instead of retaining the existing ones. But, do you know that it costs five times as much to attract a new customer than to keep an existing one!
Considering how important it is to retain your old e-commerce customers to drive repeated sales, I have written this article touching all the key points. I will discuss different tips to help you in creating a better e-commerce experience for your customers so they keep coming back to your site for more.
Firstly, you need to identify all the possible reasons of customers leaving your site. These can be any of the following:
Once you pinpoint the reason why your existing customer has decided to take a u-turn, it automatically becomes easy for you to work on that particular segment of your e-commerce business.
In order to assess the value of net profit an existing customer (if retained) may provide to your business, we calculate the Customer Lifetime Value (CLV). It is a predictive analytics technique that can help you forecast the entire future relationship of the customer with your enterprise.
The easiest way to calculate CLV is by using the below formula:
CLV= Customer Lifetime Value
CV= Customer Value
t= Store’s Average Lifespan
AOV= Average Order Value
f= Purchase Frequency
AOV can be calculated by the formula:
AOV = Total revenue (365 days) / Total number of orders (365 days)
And f can be calculated by the formula:
f = Number of Orders (365 days) / Unique customers (365 days)
t (stores lifespan) is usually 1 to 3 years.
This is a basic calculation that shows as how many months or years the customer stays with the company before going dormant.
It is critical for an e-commerce business to drive more online revenue by generating repeated e-commerce sales. Here are some of the ways to enable customers to spend more without becoming dormant:
Customers are more likely to purchase repeatedly at your website if the checkout process is simple and convenient. Do not make the customer fill the details every time they purchase, rather provide auto-filling of the fields that remain same like the name, address, and card details. Your focus should be to save your customer’s time and add convenience to the process.
Here are some ways to simplify the checkout process:
Have a look at the below one-step checkout process for Magento:
Customers love to be rewarded. It can be in the form of inviting your loyal customers to company events or sending them customized messages or gifts on their birthdays or anniversaries. Tools like LoyaltyBox are a great help in automating the process of rewarding your customers.
Here are some more ways you can apply to reward your customers:
Who doesn’t like discounts? Rewarding your loyal customers by sending them discount coupons is a great way to enhance customer retention.
Shopify is one of the most reliable platforms when it comes to generating extra online sales. You can take advantage of Shopify’s coupon and discount feature. Create coupons and assign discount codes to generate more business.
You can create discounts on the basis of:
You should always be supportive towards your customers and help them with whatever issues they might be facing. A bad and inefficient customer service is often one of the common reasons why customers fail to repeat purchase. Here are some tips for providing better customer service:
The growth of an e-commerce business is dependant on sales, however, the sales are eventually generated by customers. Therefore, if you try to close sales instead of opening relationship with the customers, it will only benefit you in short-term.
Instead, it is important to open up a relationship with your customer and focus on long-term benefits for your e-commerce business.
It is important for you to maintain the right attitude with your customers at each point during the customer lifecycle. You must exceed the expectations of the customers and always remain available. Remember that a happy customer is a loyal customer.
How do you keep the customers happy? Do let me know in the comments below.