What is customer retention and why it’s so important? Top 3 Strategies To Make It Work For You

For those of us who grew up before the retail boom of the internet, hearing the words "Customer Retention" meant being friendly to your consumer face to face, and rectifying any issues that arise in an efficient manner – usually with a phone call. Whether it was mail order, store presence or B2B you could be sure that at some point you would be, at the very least, hearing the customer's voice. The digital online retail landscape is vastly different. For a start, you may never even receive a message from the potential customer. There's no chance to approach them and ask if they need help because... you're in a virtual world of consumers browsing eCommerce sites whilst doing other things; such as watching Netflix or picking up their kids from school.

So, how can you ensure that you maximise your customer lifetime value (LTV) and retain a loyal following?


1) Make Your Customer The Sole Focus

This may seem obvious, however, you'd be surprised how many businesses focus on the product (and the end profit) rather than the customer. Using elaborate creatives to get people to notice you, will only get you so far. Despite not being able to physically see or hear your potential customer, there is still a human behind that statistic on your insights dashboard.


If someone has taken the time to give you their email address and then abandoned their cart, or if they have hit the message button on a social media platform, be sure to follow up. You can use email marketing services such as Klaviyo, but if you have the scope to engage with the user directly – grab this golden opportunity. It may only take a few seconds to write "Hi (name) I see you've left (product) in your basket, is there anything I can help you with?" yet, if there is a spark of connection between business and consumer that's more than enough to forge a relationship.


Alternatively, you can create the 'human element' of your eCommerce company by ensuring that you present your customers with honesty and heart-felt quality. This style of marketing and customer retention is not reserved for independent 'home' businesses such as soap making, wax melts, jewellery, crochet toys etc. Larger companies can easily improve their LTV score.

Imagine you were looking at tools and hardware online, the store had a set up very much like Screwfix or Toolstation – easy to browse, efficient. Now picture an efficient user interface... but with added elements of humanity in it. A founder's story, a blog with news about how people learned skills from their grandparents, and if you need help the chat box comes up with a name and a photo of the person you are messaging... These small nods to the way things used to be help your customer engage with you and invest their time, ultimately leading to more sales.


2) Introductory Offers Should Not Be The End

After proving your integrity to your new customer it's essential that you establish this isn't a 'one off' introductory gimmick. After sales marketing via email and social media advertising needs to match the expectation of your customer. As we mentioned in the first strategy – this doesn't have to be time consuming, it may just require a few tweaks to your website or way of working.

eCommerce business coaches often refer to the rule of 30:100. This means that you want to increase your brand's LTV by 30% in the first 60 days and eventually by 100% within their first year. If you are hitting those targets then you can be confident that your marketing, products and services are firmly cemented in your customer's lifestyle. If you're missing the goals ask yourself why. Is there something that is missing from your customer service journey? Is there a way to up-sell associated products or services in a genuine way?

Analysis of your data should be able to pin-point areas of improvement for customer retention. You should be closely looking at the type of product that was purchased, the seasonality of that product, and the acquisition channel. Follow this by digging deep into your post-purchase marketing strategy and you will probably be able to understand where your pain points are.

Think about this; would you rather receive a generic email advertising current offers, or would you prefer to receive a targeted email with a couple of interesting offers signed off from a person that you can contact? A great example of the latter is Octopus Energy. They consistently rate highly in reviews, signing off all emails from real people that you can contact easily and directly.


3) Build A Customer Education Program

A unique way to ensure the loyalty of your customers is to give them 'insider' knowledge. This doesn't mean throwing the odd statistic at them or a couple of 'how to' promo videos. This is something that can grow and be easily managed, which in turn nurtures trust. Eventually this can become a source of sales too.


Examples of education programs can be as simple as providing an online knowledge base which you update regularly for people who have purchased your products in the past. A bit like a 'members club' they get access to this, and new offers. If you want to invest further, looking at the bigger picture, you can even develop a community forum on your website or through a social media page. This will need to be monitored and managed, so it can be a little more costly. however, the benefits will be seen through LTV where customers begin to recommend products to each other, and also give your brand feedback about where to head next e.g. is there a new trending product or service on the market that you should be investing in?

Exclusive online educational content can also cut down the amount of service calls/chat requests you receive because the consumer is able to be more self sufficient. They feel that as a brand you care about their experience and their well being, because you trust them with the technical knowledge.


We will be giving you access to more proven strategies to improve your customer retention and LTV in our later blogs, so don't forget to check back with us soon! If you are interested in working with us please don't hesitate to contact our friendly team.