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4 Customer Retention Strategies for E-commerce

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ElitesMindset Editorial Team
ElitesMindset Editorial Team
Suleman Siddiqui, an accomplished editor, navigates the realms of celebrity, lifestyle, and business with a distinctive flair. His insightful writing captures the essence of the glamorous world of celebrities, the nuances of contemporary lifestyles, and the dynamics of the ever-evolving business landscape. Siddiqui's editorial expertise combines a keen eye for detail with a passion for storytelling, making him a sought-after voice in the realms of entertainment, luxury living, and commerce.

Businesses have several factors and indicators that they can use to track their performance. One factor that most enterprises often ignore is customer retention. Customer retention defines the loyalty clients have to a business that serves them.

Customer retention is an indication of good product or service quality. Customer retention also depicts the customer satisfaction rate of a business. An easy way to improve customer satisfaction is by offering clients easy ways to address their issues. This is done through the implementation of easy-to-use communication platforms. 

Omni channel contact centers offer businesses and clients easy communication. Omni channel contact centers offer integrated communication channels on one easy-to-use system. 

The benefits of customer retention for a business are vital in all markets. In this modern era of e-commerce, the benefits of customer retention significantly increase. With this in mind, businesses have to be aware of their current customer retention rates.

Calculating Customer Retention Rate

The first step in calculating customer retention rate is establishing a test period. For this, one can opt to pick a period ranging from 30 days to 3 months. 

Once you have the period, calculate the number of clients you had at the beginning and the number you had at the end. With these figures, subtract the number of clients at the start of the period from those you had at the end. This will give the number of new clients your business has gained in the period.

You should then subtract the number of new customers from the number of clients at the end of the period. Once this is done, divide by the number of clients at the start. Finally, multiply the figure by 100 to convert it to a percentage.

On average, a customer retention rate of about 40% for e-commerce brands is satisfactory.

With your current customer retention rate, you can embark on improving customer retention. In this article, we highlight several customer retention strategies for e-commerce businesses. 

  1. Loyalty Programs

Loyalty programs significantly improve customer retention rates for retail stores. Several retail outlets have adopted customer loyalty programs to help improve customer retention. 

E-commerce businesses can also develop loyalty programs to improve customer retention rates. Loyalty programs work by granting clients points on their loyalty cards. The loyalty points can be redeemed to buy products or pay for services.

Many clients globally have complained about the physical loyalty cards being an inconvenient item to carry. Businesses should use smart loyalty cards rather than physical cards. This helps ensure that the loyalty programs do not affect the client’s convenience. 

E-commerce brands can develop an application for the client to track loyalty points. The business can also opt to offer a loyalty points section on the native e-commerce site the enterprise uses.

Loyalty programs can also be coupled with discounts. Discounts are a quick way to show appreciation to clients for their loyalty to the business. Discounts can be offered at several points depending on their revenues. A simple way to implement appreciation discounts to loyal customers is by sending them via email.

2. Email Marketing

Source: Pixabay

Conventionally, email marketing is used by businesses to market themselves and attract clients. Email marketing can also help improve customer loyalty. Over time, a brand can learn a client’s purchasing trends and preferred products. 

Using previous data, a business can use machine learning models to predict products the client may want. Once the machine learning model predicts products, the brand can email the loyal clients. The email gives clients suggestions of products they should check out.

Knowing products a client may want shows the clients that you are aware of their needs and wants. It gives them a feeling of care and concern towards the businesses’ clients. Due to the vastness of e-commerce sites, recommendations to clients also help them identify other services or products your business offers.

However, email marketing can also be detrimental if not done well. Often, businesses keep spamming their clients with automated emails. This can dent the brand image in the eyes of the client. The client will perceive the brand as one that spams clients with promotional emails. When sending product recommendation emails, ensure that the frequency will not irk clients.

3. Customer Insights

Most businesses do what they think will benefit the client and improve revenues. More often than not, what the business thinks is best for clients is wrong and ends up hurting the business.

A business looking to improve their customer retention should be keen on considering the client’s opinions. This is why businesses should have systems in place for clients to offer their insights. Clients can also give business recommendations through the systems.

Omni channel contact centers are a good way to easily interact with clients. There are a myriad of ways that customers can opt to use to contact a business. Some clients prefer calls, others texts, and other clients prefer email or chats. Whichever option the client goes for, the interaction can be easily handled by the business using omni channel solutions. 

Some businesses opt to use multichannel contact centers regardless of the fact that omni channel cloud contact centers are better. It is vital that business owners know the difference between multichannel and omnichannel contact centers to ensure they choose wisely.

This can be done to offer their opinions or forward complaints. Complaints from clients can be used to improve product or service quality. 

Considering client insights and putting them into action shows clients that you value their opinion. It also gives clients the feeling of being in a family where their opinions are considered and valued. 

4. Referral Rewards

Customer retention for e-commerce can significantly be increased by getting your existing loyal customers to refer you. Incentivizing referrals from existing clients easily gets you new clients while showing appreciation for those who refer your business.

Referral rewards can be in the form of discount codes, cash prizes, or actual gifts from the business. Existing loyal customers can refer you to their friends or family who they think will appreciate your business.

The benefit of incentivizing client referrals is that it also gives new clients a reason to refer your business to other people. Other than improving your customer retention, incentivizing client referrals also shows appreciation for your clients by contributing to the overall growth of the business.


Establishing a good customer retention rate will help your business get new clients organically. This is because good customer retention rates are an indication that your business is aware of client needs and meets all. It is therefore vital that an e-commerce brand focuses on improving its customer retention rate. 


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