Acquiring customers in an online store is not only challenging, but also expensive. The success of your online venture depends on how much business the customers you have acquired will bring your way. For this reason, you can’t afford to ignore your customer retention rate. This is a metric that matters to every online business.
Once a first time customer buys from your store, you have to do everything you can to retain them.
A low customer retention rate means that you’d have to exert more pressure on your customer acquisition channels. This is because the survival of your business depends on regular customers and you will need to double your efforts to keep bringing new customers on board. The problem is that exerting more pressure on these channels will negatively affect your profitability and your customer acquisition cost will rise.
eCommerce retention rate case studies
Your greatest business objective should be ensuring that customers buy a substantial amount of your product. This will result in good profit margins. You should also be keen on repeat purchases as they create a regular flow of profit.
Below are some excellent case studies of companies with some of the most effective customer retention strategies;
Gone are the days when e-commerce businesses relied on typical newsletters to get customers on board. Today, such newsletters only attract a fraction of the traffic. They don’t help much in customer retention.
Research has, however, shown that companies that turn to personalized and automated emails are doing much better. Apart from retaining a good number of their customers, they are making healthy sales. Therefore, their businesses have a high chance of flourishing.
When it comes to automated and personalized emails, Amazon sets an exceptional example. This company has used this strategy for quite some time, and guess what? They have been enjoying one of the best customer retention rates.
In his book “The Everything Store: Jeff Bezos and the Age of Amazon” Brad Stone puts emphasis on Jeff Bezos, the Amazon CEO’s ability to cut prices and offer freebies to drive sales. He does all this in a bid to build customer loyalty. He reinvests returns to keep lowering the prices as well as retain customers.
If you are a customer at Amazon, you may have realized that they send you emails recommending products that could be useful to you. They study your activities on the site and identify your interests. They then send you an email with products that may come in handy for you. This keeps you coming back.
Automated newsletters and emails will undoubtedly help you as a business owner to retain more customers without much effort.
Zappos- customer service
If you have experienced poor customer service at some point, then you understand how frustrating it can get. Bad customer service is responsible for driving customers away. On the other hand, if you’ve been impeccably served by a particular company’s customer service, you wouldn’t hesitate to do business with them.
Zappos understands the importance of brilliant, exemplary service. Rendering excellent customer service helps them generate 70% of their sales through repeat purchases. Zappos boasts a superior customer retention rate than most companies. The rate at which their customers keep coming back justifies their customer acquisition cost.
There is a time that Zappos ran out of stock for a particular pair of shoes. The problem was that a lady staying in a Las Vegas hotel needed that pair of shoes. It is reported that one of the company’s customer service representatives went to a competitor's shoe store to get the lady that particular pair of shoes. This shows to what extent this company is willing to go just to serve its customers satisfactorily.
If a client orders a product from your store for the first time and you impress them with exemplary customer service, then there is no reason as to why they wouldn’t buy from you another time.
As you can see, there are numerous ways in which you can retain customers and boost the profitability of your e-commerce venture. All you need to do is to deploy some of these strategies that are tested and proven. Once you implement them, you’ll grow your sales and achieve a higher customer retention rate.