When it comes to buying online, customers can choose any business they want and switch to another whenever they wish.
Today’s consumers have also become more demanding, especially when it comes to the speed and quality of service. Based on the Zendesk report, one bad experience could be enough to cause 80 percent of customers to leave the brand for a competitor. All of these factors make the task of keeping the customers one of the biggest challenges eCommerce businesses face these days.
If you also observe your hard-earned customers fleeting away to buy somewhere else, then you will need to implement at least a few smart customer retention strategies.
In this guide:
What is customer retention?
Why is customer retention important?
7 Customer retention strategies
Looking for other ways to get more sales? Check out these guides:
10+ Strategies to Drive Traffic to Your Shopify Store
Shopify Marketing: 11 Strategies For More Sales
15 Tested Ways to Promote a Shopify Store
What is Customer Retention?
The customer retention definition in marketing is the company’s ability to turn its one-time buyers into repeat customers and prevent them from leaving for a competing brand. It is different from the customer acquisition or lead generation process because you have already converted the customer and they are also familiar with your business.
In other words, customer retention is essentially keeping the customer with your company for as long as possible, so that they bring you in income—again and again.
Why Is Customer Retention Important?
Any business that already has loyal and satisfied customers on its board will benefit from focusing on customer retention. And there are quite a few reasons for that, and we’ll review them now.
1. Customer retention is an important part of a customer lifecycle marketing strategy.
Customer retention brings the buyers back to the bottom of the sales funnel (the purchase stage as shown below) without having them go through the whole buyer’s journey again.
Sales funnel Sales funnel showing six stages of a buyer’s journey. Starting from the top, these stages are Awareness, Interest, Consideration, Intent, Evaluation, Purchase.
2. Customer retention makes sales much easier.
The probability of selling to an existing customer is 60-70 percent. When it comes fantuan database to a new prospect, your chances go down to only 5-20 percent.
3. Customer retention helps you generate more revenue.
Repeat customers are likely to spend 31 percent more compared to new customers. And just by the sheer increase in customer retention by 5 percent, you can boost your income by 25 percent!
4. Customer retention costs less than customer acquisition.
Studies have shown that acquiring new customers is five times more expensive than keeping existing ones.
5. Customer retention can help you get new prospects.
If you manage to forge long-lasting relationships with your loyal consumers, they might become your ambassadors who will spread good word-of-mouth about your company and bring in new prospects. With all these factors in mind, it is clear to realize that making existing customers stay with you is beneficial in the long run, especially to companies that have already established some pool of customers.