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  • Writer's pictureBoris Mustapic

6 Examples of Effective Ecommerce Retention Marketing

Wouldn’t it be great if there was something you could do to ensure that your existing customers keep shopping with you for years to come? Something that would help you build trust and create a more meaningful relationship with your customer base, as well as increase the lifetime value of your customers?

Luckily for you, there is such a thing. It’s called retention marketing.

What is retention marketing?

Retention marketing includes a number of activities that are designed to generate more repeat purchases and increase the lifetime value of each customer. Companies employ retention marketing in an effort to extract additional value from their existing customers.

A good retention marketing strategy will allow you to build trust and develop a deeper relationship with your customers, as well as maximize the revenue you generate from your customer base.

The importance of improving your customer retention rate

A lot of ecommerce businesses focus on driving more traffic and acquiring new customers, ignoring their existing customer base in the process.

If you want to grow your online store’s revenue, you need to put more emphasis on improving your customer retention rate. Why? Well, there are a number of reasons.

First, acquiring a new customer can cost seven times more (Bain) than keeping an existing one. Studies have also shown that increasing customer retention by just 5% can lead to a 95% increase in profit. (Hubspot)

Additionally, your repeat customers generate up to seven times more revenue (Real Marketing) compared to first-time visitors.

These stats should make it clear that ecommerce businesses that want to grow need to focus on improving their customer retention rate.

Increasing customer retention by just 5% can lead to a 95% increase in profit. (Hubspot)

How to measure customer retention

The base metric for measuring retention marketing performance is customer retention rate. It’s calculated by subtracting the number of new customers acquired during a specific period (CN) from the total number of customers at the end of a period (CE), and then dividing the result by the number of customers at the beginning of the period (CS).

The number you get by doing this is then multiplied by 100 to get your customer retention rate expressed as a percentage.

Customer retention rate calculation

Apart from customer retention rate, there are four additional metrics that are crucial for improving and understanding customer retention: repeat customer rate, purchase frequency, average order value, and customer lifetime value.

Repeat customer rate

Repeat customer rate denotes the percentage of customers that make a second purchase from your business. It’s calculated by dividing the number of customers who purchased from you more than once by the total number of unique customers.

A high repeat customer rate shows that most customers are satisfied with your products or service so much that they’re willing to come back to make another purchase.

Purchase frequency

Purchase frequency is a metric that shows how often repeat customers buy from you. It’s calculated by dividing the total number of orders with the total number of unique customers over a given period (e.g., a year).

Average order value

Your average order value (AOV) shows how much customers spend, on average, in every transaction they make with your business. To calculate average order value, divide your revenue by the total number of orders.

Customer lifetime value

One of the most important ecommerce metrics, customer lifetime value (LTV) shows how much revenue each customer generates during their lifetime. It’s calculated by multiplying purchase frequency by the average order value.

Calculating the lifetime value of your customers will allow you to understand how much you can spend on acquiring a new customer.

Now that you understand how to measure customer retention, let’s look at specific ecommerce retention strategies that you can use and the brands that have had great success utilizing them.

1) TOMS’ mission statement

One of the simplest ways to inspire customer loyalty and increase retention rate is to create a mission statement.

A great example of an ecommerce mission statement can be observed with TOMS, a footwear company that lets customers choose a cause to which TOMS will donate part of the profit generated from the customer’s purchase.

TOMS mission statement

TOMS supports a number of causes, including donating shoes to people in need, ending gun violence, and providing access to safe water. The company also supports charities that are dedicated to helping homeless people, as well as those with mental health issues.

Your mission statement should let customers know what your company stands for, and why you do what you do.

Giving customers an insight into your company’s values and letting them know about the causes you care about will allow you to build a deeper and more meaningful relationship with them.

2) Rodd & Gunn’s 24/7 customer service

Improving customer service is another great way to improve retention rate. If you go out of your way to help your customers and make them happy, they’ll keep coming back to you again and again. Additionally, customers are four times more likely to go to one of your competitors (LinkedIn) if they’re not satisfied with your service.

Rodd & Gunn understands the importance of great customer service. That’s why they provide their customers with 24/7 live chat support. Their footer menu provides easy access to a fit guide as well as to pages that contain crucial information regarding contact details, shipping, returns, exchanges, and store locations.

The company also links to all its social media pages at the bottom of their homepage.

Rodd & Gunn live chat support

The first step to improving customer service is to give customers plenty of ways to reach you. This includes being available by phone, email, live chat, and social media. It’s also crucial that you work on improving your response time and try to solve your customers’ issues as soon as possible.

Addressing social media complaints in a timely manner is especially important since 88% of shoppers state that they avoid buying from brands (Conversocial) that have unanswered complaints on their social media pages.

After helping a customer with their problem, try to address the cause of the issue so that it doesn’t happen again.

Make sure that it’s easy for customers to find your support forms and links. There’s no benefit in having an excellent response time if customers can’t figure out how to reach you.

3) Nordstrom’s loyalty program

People love being appreciated. An excellent way to show your customers that you appreciate them is to create a loyalty program to reward them for their continued support.

A great example of an ecommerce loyalty program is Nordstrom’s Nordy Club. The clothing retailer’s loyalty program is free to join and gives members access to exclusive perks such as beauty and style workshops, curbside pickup, and more.

Nordy Club members earn points for every dollar they spend on Nordstrom’s website. These points can then be exchanged for Nordstrom Notes that can be used to purchase products from the retailer.

Nordstrom's loyalty program

While starting a loyalty program might seem complicated, it’s really not that hard. There’s plenty of apps out there that can help you create a loyalty program for your ecommerce business quickly and easily. Examples include Smile and LoyaltyLion.

It’s up to you to decide what kind of rewards you’d like to offer to customers. These can range from discounts and gift cards to free products and paid trips. Make sure to choose rewards that will be of value to your target audience.

Don’t make the rewards too difficult to earn or you’ll risk frustrating your customers and severely reducing the number of people willing to participate in your loyalty program.

4) Victoria’s Secret’s thank you page

Another way to show your appreciation for your customers is to thank them for their purchase explicitly. This is best done on your post-purchase page, also known as the thank you page.

The thank you page for the lingerie brand Victoria’s Secret is an excellent example of using the post-purchase page to nurture customers and ensure that they stay customers for as long as possible.

While using a minimal design, the page provides customers with all the information they need about their order, as well as gives them the option of contacting live chat support to get answers to any questions they might have immediately.

Customers are also pointed to Victoria’s Secret’s social media pages so that they can keep up with the brand’s latest updates, as well as asked to share their opinion about the experience they’ve had shopping with the brand.

Victoria's Secret thank you page

The thank you page can help you improve customer retention in a number of ways. Apart from thanking your customers, you can also use the thank you page to:

● Point to your social media pages so that customers can stay updated on your newest products

● Ask customers to subscribe to your newsletter and gain access to exclusive offers

● Offer a discount to incentivize users to make another purchase straight away

● Show them valuable educational resources related to their purchase

● Display other products that might interest them

ReConvert provides you with an easy way to improve your thank you page by allowing you to implement timed discounts, upsell offers, social sharing buttons, and more.

5) Sephora’s re-engagement email

A re-engagement email campaign is a marketing campaign designed to re-engage your existing customers that haven’t purchased in a while. It can be very effective for reminding customers of your online store and keeping your brand top of mind.

Sephora’s re-engagement email lets customers know that they’ve been missed and that their absence didn’t go unnoticed.

The brand offers customers a reward card to entice them to come back and make a purchase, cleverly making sure to put a time limit on the reward to create a fear of missing out (FOMO) and increase the chances of customers taking advantage of the offer.

If you take a closer look, you’ll see that the email is personalized by including the customer’s name in the subject line. Links to Sephora’s main product categories are also included in the email to provide customers with an easy way to visit the brand’s website and make a purchase.

Sephora's re-engagement email

To be able to create an effective re-engagement campaign, you need to understand why customers stopped shopping with you, as well as what you can do to change their mind.

Use your re-engagement email to ask customers if there’s something that might be holding them back from making a purchase. You might also want to entice them into making another order by giving them an attractive discount.

6) Amazon’s Prime membership subscription

It’s somewhat unusual for ecommerce businesses to offer membership plans. However, Amazon proves that it can be done quite successfully. Its Prime membership subscription offers members free two-day shipping, exclusive deals, and free access to Amazon’s library of movies, TV shows, music, and ebooks.

Amazon Prime

By offering customers exclusive perks through a membership plan, you’ll increase the chances of them making a purchase with you rather than with your competitor.

As with loyalty programs, the most important thing to keep in mind is to make sure that your membership plan offers access to something your customers actually want. This requires a deep understanding of your target audience, as well as its pain points and challenges.

Over to you

Are you doing everything you can to keep your customers happy and make sure that they don’t switch over to one of your competitors? Use these six examples of retention marketing to inspire you and find a way to incorporate them into your ecommerce business so that you can retain as many customers as possible.

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smith john
smith john
Nov 27, 2021

What a well written and compassionate article. I found your ideas and wisdom encouraging and helpful. kids dresses for girls

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