Top 11 Customer Retention Strategies For E-commerce Brands

Customer Retention Strategies for e-commerce brands

Most big brands like Bewkoof and Chumbak have been able to build brand loyalty with a huge consumer base because of impeccable customer retention strategies. But most D2C businesses find it challenging to retain their customers. To help you build your brand, in this blog we are discussing some of the best customer retention strategies that you can implement right away! Read on! 

What is customer retention?

Customer retention is when you acquire a customer once, and the customer comes back to you for repeat purchases. As you turn a one-time customer into a returning customer, you reduce churn and increase your loyal customer base.

Why is customer retention important for D2C brands?

Customer retention is important for any business and not just e-commerce or D2C brands. While you might be spending hundreds of dollars to acquire a customer to increase revenue, customer retention is often not just a faster option but a cost-effective option too.

That’s because selling to customers you have already built a relationship with is easier than selling to a new customer whom you have to attract, educate about your products, and build trust before converting. Here are some benefits of customer retention: 

Better  ROI: Acquiring a new customer is approximately five times costlier than retaining an existing customer. 

Increase Brand Value: Customers when connect emotionally with brands they return to their favorite brands for repeat purchases. This boosts customer loyalty and creates brand value.

Increase customer lifetime value (CLV): When you retain your customers, you make more sales to a single customer over their lifetime. Your brand CLV increases significantly.

Reduce customer acquisition cost (CAC): When you have a strong base of returning customers, you don’t spend much money on customer acquisition through advertising and other modes. Additionally, the loyal customers become your brand’s biggest advocates referring you to their friends and family —- this brings more business to you. 

Focus more on growth: When you have to look for new customers constantly, your entire focus goes on acquisition. But when you have a steady returning customer base, you can focus better on growth. 

11 Customer retention strategies with examples

1. Email marketing to stay on top of their mind

Do you often get customers who shop once and never return? To tap back on these customers, try leveraging email marketing. 

You can build your email marketing campaign on themes like:

You can build your email marketing campaign on themes like:

educating the customers about your brand and products

sharing a snippet of behind the scene stories

milestone and festival emails motivating them to make a purchase

Cart abandonment emails to customers who left the purchase mid-way 

Bonus : Will link car abandonment email blog here 

Quircksmith, a jewelry brand, does this really well — a customized email with gifting suggestion for Rakhsha Bandhan

2. Offer discount

Who doesn’t love a discount? And your e-commerce customers are no exception! Entice your customers with lucrative discount offers to trigger them to make repeat purchases. Brands like Amazon and Flipkart offer special deals during the festive season to retain customers. You may also offer discounts on occasions like celebrating a company milestone, celebrating the customer’s important life events, etc. 

Different occasions when you can offer discounts:

  1. When your brand reaches a milestone: For example it’s your brand’s 3rd anniversary, or you have made 1000th sales, or have reached 100K social media followers. 
  2. Special days: It’s common practice for D2C brands to offer discounts during festivals end-of-seasons when customers are already in a shopping spree!
  3. Flash sales: Announce discounted flash sales from time to time. You can limit the sale window to create an urgency and encourage your customers to avail the discounts. 
  4. Brand partnership: Partner with other brands and organize the sale. 
  5. Customer’s life event: Celebrate life events of your customers by offering them special discounts on their birthdays and anniversaries.

Juicy Chemistry, an e-commerce platform, offers exciting discounts for first-time customers. The brand leverages Instagram creatively to promote its products and announce its discount offers. For example, they run quizzes and contests and offer discount coupons to the winners. Indeed a great way to promote sales and keep the customers engaged! 

3. Keep them engaged

Today, digital customers want a holistic shopping experience, and keeping them engaged is important if you want them to return to your brand for repeat purchases. Few things you can do to keep your customers engaged:

  • Collect data from analytics and heatmaps, and learn more about your customers. Identify areas creating friction and eliminate them with a conversion optimization partner. Add some delightful factors to their shopping experience. 
  • Engage with them through social media. Build a strong social media strategy to achieve your goal. 
  • Use product visualization to create a memorable purchasing experience. 

4. Loyalty program

A loyalty program is always a huge hit in the e-commerce industry for customer retention. There are different models of loyalty programs, including:

Point-based: It’s the easiest loyalty program where the customer collects points based on their purchase amount. The gathered points can be redeemed through discounts or gifts. 

Tier-based: This is another popular loyalty program where customers are ranked into different tiers based on their purchase value. 

For example, if customers purchase up to INR 1000, they are grouped in tier 1. Customers who purchase INR 2000-INR and 5000 are placed in tier 2, and so on. Each tier has benefits and privileges that change as customers progress in their buying journey. Usually, the benefits and the privileges increase as the customer makes a higher-value purchase. 

Hybrid model: As the name suggests, you can use a combination of different loyalty programs in the hybrid models. 

Perk-based: In this model, you offer different perks to your customers instead of giving points. 

Here’s an example from IKEA that has an exciting customer loyalty program. The brand offers different perks and benefits along with unique content. For example, their members have free access to workshops, and the customers receive surprise emails with  special discounts. 

5. Personalize the user experience

A McKinsey report suggests that 76% of consumers feel frustrated when they don’t find a personalized experience with a brand. The report adds that brands that offered personalized experiences drove 40% more revenue from their activities than the average players. So, if you are not yet incorporating personalization in your customer strategies, you’re losing out. Here are a few ways to offer a tailor-made experience to your users.

  • Make their online navigation easy
  • Offer relevant product recommendations that fit with the user’s lifestyle
  • Celebrate the customer’s milestone
  • Personally address the communication to the customer
  • Tailor message to the needs of the customer
  • Follow up with the customer post-purchase

Example of personalized communication: A handwritten note by an indie bookstore for its customer

Here’s another example from Juicy Chemistry. The brand offers personalized recommendation based on your skin problem

6. Pamper the repeat buyers

If you want your repeat customers to keep coming back to you, pamper them. Even if that means going out of the way. Some ways that you can ponder on:

  • Offering exclusive offers only for repeat customers
  • Discount coupon upon every purchase that they can redeem on their next purchase
  • Be genuinely helpful and solve their problem/question

For example, Nykaa Prive is a special loyalty program for the brand’s repeat buyers. The brand gives a complimentary gift when the customer purchases during their birthdays, free shipping coupons, and additional discounts. 

Myntra has an Insider’s Program meant exclusively for repeat customers. Privileged members have early access to sales, priority customer support, and Insider exclusive rewards and benefits. 

7. Woo your customers with a top-notch onboarding program

A thoughtfully designed customer onboarding program can help you  earn your loyal customers. Few things to keep in mind while designing a customer onboarding program

  1. Keep it simple. If needed, break things down. Don’t overwhelm them by asking them to do too many things on day 1. Do you need the customer’s shipping address or last name on day 1? Perhaps no! 
  2. Offer quick tips to help the user get started. 
  3. Share your story and expectations. 
  4. Follow up after their first purchase. Your customer has made their first purchase. Follow up right away in their inbox to share a little note of thank you with a discount coupon. Encourage them to purchase next. 
  5. Share your product catalog to help them get started. 

8. Leverage social media to stay in touch

The competition out there is fierce, and we do not deny it. But you still have a fair chance to stay apart from the rest of the crowd. How? By staying in touch with your customers. And social media has just made that super easy. E-commerce brands that know how to leverage social media are already a step ahead of their competitors. They’re always on top of the minds of their customers.

9. Survey customers to identify areas of improvement

There’s nothing better than asking your customers for areas where you want to improve. If you have already established a fair customer base, you can target the right question for the right set of customers. Regular customer surveys help you: 

Receive specific feedback on your services

Keep your customers engaged 

Address customer queries on time

E-commerce brand Myntra does it really well. They gather feedback about their delivery executive right after delivering a product! 

10. Build community 

Building a brand community is the best way to make your customers invest in your brand emotionally. Since they are emotionally attached to your brand, they consume your content regularly, talk about it to their friends and family, and purchase from your brand. 59% of customers said they would be loyal to a brand if they were emotionally connected. 

Indian-audiophile-forum-example

Source: A great example is The Indian Audiophile Forum run by Headphone Zone. The community connects headphone enthusiasts through this Facebook community. 

11. Leverage user-generated content

User-generated content can be a game changer for your customer retention strategy because customers trust the words of other customers more than any advertisements. So if you need to incorporate at least one strategy to ensure customer retention, you must consider leveraging user-generated content. A study report mentions that 90% of customers trust user-generated content more than flashing ads and campaigns. 

Go Pro is a real pro in leveraging user generated content(UGC). In fact, their entire social community is based on UGC! 

Now is the time to pay attention to your customer retention strategy!

Audit your current marketing and customer retention strategies. Analyze what is working for you and what is causing the churn. Remember, every action begins with the awareness stage. Once you are convinced you to need to do more about your customer retention strategies, explore the ideas discussed above. 

However, to implement a solid customer retention strategy, you need to have strong technology support for your e-commerce business to flourish. Technology can help you strengthen your relationship with your customers so that they love shopping with you. Here are some areas where technology can help:

  • Automating your emails with autoresponder series that helps you to engage with your customers and build relationships
  • Leveraging AI to improve the search experience of the customers. With AI, you can predict the type of content/product your customers will like to see, and you can suggest recommendations accordingly. Research suggests that by using AI, your sales can improve by up to 50%. 

About Velocity

Velocity is India’s largest revenue-based financier, and we offer growth capital of up to Rs 4 crores to D2C and e-commerce companies. Businesses with healthy revenue streams can apply for instant funds and pay it back as their revenue grows. To get instant revenue based funding for your business, apply here.

Additional Reads

  1. Revenue Growth Management: Strategies for Maximizing Profit and Success
  2. Mastering Cost per Acquisition (CPA): How to Drive Growth and Boost ROI
  3. How to Maximize ROI in Advertising: Blended ROAS
  4. What is Customer Acquisition Cost, and How to Reduce It?

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