Top 10 Customer Retention Strategies for Shopify Stores (Complete Guide 2023)
In the e-commerce industry, one of the key secrets for successful business is customer retention. Any e-commerce store who is having a maximum number of customer retention can be considered as long-term successful.
According to stats, 82% companies agree that customer retention is much cheaper as compared to new customer acquisition.
So, if you’re running a Shopify store and planning for long-term profitability then take your focus on increasing customer retention.
In this article, we’ll discuss some best Shopify apps based client retention strategies you can implement to run a profitable Shopify store.
What is Customer Retention?
Customer Retention is a metric that most businesses prefer to measure how many percentages of customers stay over time. It helps businesses to understand their products’ quality and services, how satisfied customers are, how much they’re making repeat purchases and what are the areas of improvement. There are various metrics available that help to analyze customer retention of any business. By understanding customer retention, businesses can implement various strategies to increase the retention rate. It is a much more cost-efficient way as compared to acquiring new customers.
Why is High Customer Retention Essential for Shopify Stores?
One of the major reasons why customer retention is important i.e., retaining customers is much easier as compared to acquiring new customers. It also helps to increase repeat purchases and encourage customers to spend more money overtime.
Implementing customer retention strategies can give much better results in less time and that’s why Shopify stores focus on improving their retention rate.
Customer retention is a great way to understand current business, products and services quality, how much customers are loving your products and become loyal customers and what areas require improvement for more customers retention.
Here are some major benefits of having a high retention rate:
- Increase customer’s lifetime spending value
- Lower marketing budget
- Increase revenue and profit margins.
- Improve overall product quality.
- Enhance customer’s shopping experience.
- Build a loyal customer community.
And much more that shows high customer retention is essential in Shopify stores.
3 Key Customer Retention Metrics that Shopify Stores Must Consider
Here are some of the most essential KPIs that Shopify store owners can use to measure their customer retention:
1. Repeat Purchase Rate
Repeat purchase rate is a metric that helps you to identify the percentage of customers who have made more than one purchase from your Shopify store. When customers are happy and satisfied with your product’s quality then it encourages them to spend more.
To calculate the Repeat purchase rate, here’s the formula:
Repeat Purchase Rate = No. Of customers who have made repeated purchases / Total number of customers made purchase (same time frame) × 100
2. Purchase Frequency
The purchase frequency metric helps you to identify how often customers are reverting back to make purchases for a particular segment. So that businesses can identify their winning products and work on them to get higher revenue and profitability.
To calculate the purchase frequency, here’s the formula:
Purchase Frequency = No. Of orders/ No. Of unique customers
3. Customer Lifetime Value
The customer Lifetime Value metric will give a brief idea of how much revenue you can expect from each customer for your business in their lifetime.
To calculate the customer lifetime value, here’s the formula:
Customer Lifetime Value = Purchase Frequency × AOV × Average Customer Lifespan (in years)
By following these three Metrics, Shopify store owners can understand the current status of the retention rate.
Now the question arises: how to increase the customer retention rate? Let’s find out!
Top 10 Customer Retention Strategies for Shopify Stores
1. Analyzing Customers Data and Buying History
If you’re running a Shopify store and many customers have already made purchases from your store then surely you have their data and buying history. It’s time to collect and analyze this data with the best review app for shopify and get some valuable insights about your customers such as behavior, interests, needs and preferences. By understanding these valuable insights about your customers, you can identify what are the most valuable and loyal customers for your business who have repeatedly made purchases and you can plan to target these particular audiences more effectively to get more sales and build a loyal customer community. It helps you to prioritize your marketing efforts and reach ideal customers for better results.
2. Understanding the Customer Behavior
With the fast-changing world of online shopping, it’s very essential to understand the customer’s shopping behavior. You need to analyze the recent data and statistics to understand what customers prefer to shop for, from which device, how much time they spend, interest and their repetitive activities. It helps you to enhance your customer shopping experience and make it more seamless and personalized for each customer that leads to a loyal customer community.
3. Identifying Customer Preferences and Patterns
Another most effective strategy to increase Customer retention rate i.e. identifying their preferences and patterns. If you analyze your customer data and understand what similar preferences and patterns are, then it becomes much easier to increase customer retention rather than acquire new ones. A secret of loyal customers can be found in the customer patterns and preferences, if it matches your loyal customer’s pattern such as similar product category, colors and shopping process, then it’s your ideal customers that you should target for repeat purchases.
4. Utilize Email Marketing Campaigns to Engage with Customers
According to statistics, 81% of small businesses are relying on email marketing to increase customer retention and new acquisition of customers. There’s no doubt that email marketing is an all-time effective marketing strategy to drive results for businesses. It’s the most simple way to connect with your ideal customers, nurturing them and encouraging them to repeat purchases.
5. Offer Personalized Products Recommendations and Discounts
Providing personalized product recommendations and discounts can be the most powerful marketing strategy to drive more sales and revenue. By analyzing customers’ data, you can identify their interests and recommend products according to their interests and previous order history. It increases the chances of getting sales and leads to high client retention rates.
6. Create Loyalty Programs
88% of consumers say that it takes more than three or more purchases to become loyal to a brand. That’s why, most of the businesses take out a separate budget for creating loyalty programs and encourage their potential customers to get exciting rewards, loyalty points and discounts. These programs make it easier to build a loyal customer community.
7. Provide Excellent Customer Services
Around 94% of customers are more likely to make another purchase if they had a positive shopping experience. So it’s essential for the best Shopify apps based stores to provide excellent customer support and ensure they feel happy and satisfied with their first purchase from your store. Try to respond and resolve their queries immediately and offer numerous options for customers to connect with the support team, such as phone, email, message, and live chat.
8. Use Retention Metrics and Analytical Report
When you’re implementing these strategies to increase customer retention, it’s important to understand whether you’re actually getting results or not. This is where you need to consider an analytical report that gives detailed insights about your store, sales, revenue, repeat purchases and customers’ lifetime value to understand how fast you’re getting results with these strategies and make improvements accordingly.
9. Collect Customers Feedback and Improve Product Quality
In today’s world, data is everything and as a Shopify store owner, you need to hire Shopify developer, and collect all your customers’ feedback. It helps you to get valuable insights about your customers and what customers really think about your products and services so that you can improve as per the feedback and drive more repeat purchases and loyal customers.
10. Providing a Seamless Shopping Experience
Your customers are the most integral part of your business. So always try your best to provide a seamless shopping experience via the wishlist app Shopify, with a user-friendly interface and fast responsive theme. It encourages customers to make more purchases and drives high ROI in your business.
Q.1 What’s the Difference between Customer Retention and Customer Acquisition?
Customer retention is all about keeping engaging customers to make repeat sales and Customer Acquisition is all about getting new customers.
Q.2 What is a Good Customer Retention Rate for Shopify?
A good customer retention rate for Shopify lies between 20-30%. However, it varies from industry and business model.
Q.3 What’s the Role of Exceptional Customer Service in Customer Retention?
One of the major factors that build trust for the brand is exceptional customer service. It encourages customers to make repeat sales and loyalty to the brand.
Q.4 How You Can Improve Customer Retention?
There are numerous ways to improve customer retention such as creating loyalty programs, providing personalized product recommendations, collecting details via the Shopify form builder app and running email marketing campaigns.
Q.5 What is the Best Way to Measure Customer Retention?
One of the best ways to measure customer retention is by identifying repeat purchase rates.
Customer retention is playing an essential part in today’s e-commerce success. If you’re running a Shopify store then these are the top ten strategies you can implement to increase customer retention in your business for long-term success. Now it’s your turn to hire shopify developer, build a mobile-friendly store and start implementing these strategies to increase loyalty customers for your business