The ten Greatest Buyer Retention Methods (That Are Tried and True)

Think about two manufacturers. 

Model A is considered one of your favs. You’ve purchased from them earlier than, you like their merchandise, you subscribe to their e-mail newsletters, and also you get a tingle of anticipation every time you place an order.

Then there’s Model B, who you’ve by no means even heard of. They promote the identical sort of stuff as Model A at the same value level, however you’ve obtained no thought about their product high quality, buyer help, or the rest.

If I requested you which ones of the 2 you’re more than likely to purchase from subsequent, I’d guess my home you’ll say Model A.

Rationally, ecommerce entrepreneurs know it’s simpler to promote to current clients than new ones. But many manufacturers are obsessive about new clients, with one survey revealing that:

• Solely 20 p.c of ecommerce professionals have a devoted finances for buyer retention
• 63 p.c allocate extra finances to acquisition than retention

It’s time to vary that.

On this article, I’ll speak by way of all the things that you must learn about ecommerce buyer retention, from understanding its worth to calculating retention charges. And I’ll even share a retention technique instance or two (truly, 10).

Buyer retention differs from buyer acquisition. The latter means getting clients which have by no means purchased from you earlier than to make their first purchases. Buyer retention is, due to this fact, a later stage within the buyer journey.

At its core, buyer retention is about holding clients engaged, making a optimistic expertise, and turning potential one-time patrons into loyal, long-term clients.

Buyer retention has a greater return on funding than acquisition. It’s cheaper and simpler to retain clients than purchase new ones. The truth is, it’s estimated that the price of buying a buyer is 5 to 10 occasions larger than retaining one.

What’s extra, retention leads to larger buyer lifetime worth (CLV). Returning clients not solely spend extra on common, however additionally they buy extra usually. Fifty-two p.c of consumers say they’ll exit of their approach to purchase from their favourite manufacturers.

Lastly, loyal clients are inclined to suggest manufacturers they wish to their mates and households. That is one other approach wherein retention works out cheaper than acquisition. You purchase clients at no added value by way of referrals.

Properly, in response to Omniconvert, amongst ecommerce professionals who know their retention charge, a majority cited a charge of 16 – 30 p.c. However that’s a reasonably broad vary. And it’s value noting that comfortably the most well-liked response, with 31 p.c of votes, was “Don’t know.”

 So it’s laborious to get a repair on different model’s retention charges. However you may undoubtedly carry some much-needed context to your personal retention charge by contemplating it alongside different ecommerce metrics, reminiscent of:

• Buyer lifetime worth
• Buyer churn charge
• Repeat buy charge

Right here’s the best way to get these numbers…

Buyer lifetime worth (CLV) describes the overall income you earn from a single buyer all through their relationship together with your model. Calculate it utilizing this method:

I do know what you’re pondering: “However I don’t know my buyer worth, or my common buyer lifespan. Assist!”

To get these numbers, that you must run a pair extra calculations:

• Common buy worth = Whole income inside a time interval / Variety of orders inside that interval
• Common buy frequency charge = Variety of purchases inside your chosen time interval / Variety of complete clients in that interval
• Buyer worth = Common buy worth x Common buy frequency
• Common Buyer Lifespan = Sum of all buyer lifespans / Whole variety of clients

Now return and plug these numbers into the CLV method above. Usually talking, the upper your lifetime worth, the extra repeat orders you’re producing—and the higher you might be at retention.

In keeping with Metrilo, the common ecommerce repeat buy charge stands at 28.2 p.c, though numbers differ considerably throughout totally different niches:

This isn’t stunning. Should you promote high-ticket, long-lasting merchandise (like TV units), solely a small proportion of consumers will make a number of purchases inside a short while interval.

Nonetheless, for any ecommerce enterprise, no matter area of interest, a excessive repeat buy charge will all the time be a good factor.

But it surely’s turning into more and more tough to keep up an aggressive buyer acquisition technique. Between 2009 and 2022, common acquisition prices surged by 222 p.c — from $9 – $29 for each new buyer acquired — by way of a mixture of things, together with:

• The phasing-out of third-party cookies
• The launch of iOS 14.5, requiring customers to grant permission for apps to gather and share knowledge
• Elevated laws round shopper privateness, reminiscent of GDPR and CCPA
  

All of which implies it’s extra vital than ever for ecommerce entrepreneurs to take a customer-first method to acquisition, primarily based round constructing sustainable, long-lasting buyer relationships.

As an illustration, chances are you’ll survey clients that haven’t bought from you shortly. Right here’s an instance from life-style model Fabeltics Males:

The corporate makes use of a fast and easy survey to ask earlier renters why they haven’t returned to the service.

Use a post-purchase e-mail sequence to encourage retention from the get-go. Put up-buy e-mails set up belief and create a optimistic buyer expertise that encourages earlier patrons to return.

One vital factor to recollect right here is that post-purchase emails are inclined to have a better open charge than your common e-newsletter, e-mail blast, and so on. Prospects are eager to seek out out info on the standing of their order.

Which means post-purchase emails present the proper alternative to spice up the probability of buyer retention when you have the client’s consideration. 

For instance, The North Face makes use of order affirmation emails to get clients to enroll in its SMS checklist:

Naturally, The North Face can use this info to keep up communication with earlier clients and ship out related provides to encourage future purchases.

Should you’re seeking to get in on the motion, I like to recommend a sequence of 5 foremost post-purchase emails. These are:

1. Order affirmation
2. Delivery affirmation
3. Delivery standing replace
4. Overview request
5. Supply or low cost to return

The final sort of e-mail prompts the client to make a second buy out of your model. This helps to make your product(s) a staple want for the client.

Right here’s an instance from Brooklinen:

As you may see, the corporate first provides clients an incentive within the type of factors off their subsequent buy. Then it goes on to suggest merchandise that complement the earlier buy.

The corporate is subtly saying, use your low cost in opposition to these things. Fairly good, huh?

In keeping with a examine printed by the Affiliation for Shopper Analysis, comfortable clients are keen to spend extra on the manufacturers they love. However the relationship between satisfaction and spending isn’t linear.

Fairly, it appears sort of like an S-shape that’s concave for low satisfaction ranges, convex for prime satisfaction ranges, and flat for medium ranges of satisfaction:

Because the researchers put it: “Which means solely extremely happy clients are keen to pay extra and really dissatisfied clients are undoubtedly not keen. Average ranges of satisfaction don’t enhance a buyer’s willingness to pay considerably.”

So delighting your clients received’t simply show you how to retain them — it provides a bunch of potential revenue-related advantages, reminiscent of greater:

Top-of-the-line methods to please loyal clients is to supply a VIP program that rewards clients for making purchases together with your model, making a reciprocal relationship that has excessive worth for each side.

To do it nicely, you first want to verify your VIP program has an air of exclusivity. Take this instance from Savage X Fenty’s Xtra VIP Membership:

Solely VIPs get entry to objects hand-picked by the queen herself, Rihanna. Now, if that isn’t engaging, I don’t know what’s.

Additionally, you wish to be sure your rewards are one thing your clients truly need. Sure gifted merchandise, for instance, will enchantment to some however not others. 

A approach round this subject is to supply a points-based reward system the place clients get to decide on the rewards for themselves, as on this instance from Cotton:On:

One greenback equals 1 level, and clients can redeem these factors in opposition to any merchandise they need.

The thought is to create a relationship with clients by way of a extremely interesting, customized expertise. Then you definitely’ll get them to maintain coming again to your model for extra.

If the standard of your product isn’t as much as scratch, they received’t purchase from you once more. Nor will they make a repeat buy if they’ve a sub-par customer support interplay, and so forth.

The excellent news is you may nonetheless win unhappy clients again if one thing goes fallacious. Do that by providing quick and useful buyer help. You may also have a contact kind pop up robotically when customers browse your assist pages, which could look one thing like this:

These little touches make a giant distinction to the client expertise.

It’s additionally a good suggestion to supply help earlier than the client even realizes they want it. This ensures they received’t run into any roadblocks that stop them from shopping for from you sooner or later.

You are able to do this by sending out related, useful content material at vital factors within the buyer journey. 

The White Firm, as an illustration, sends out a fast and straightforward setup information by way of e-mail when folks purchase their air purifiers for the primary time:

The purpose is you need folks to begin utilizing your product, not simply neglect about it. However not solely that, you need them to make the very best use of your product they presumably can. This additionally means it turns into part of their each day life, and so they’re extra more likely to come again for extra. 

Any enterprise can do one thing like this. Let’s say, as an illustration, you promote artisan olive oils. It will be a good suggestion to proceed to ship out recipes that make use of your oils.

Right here’s an instance from Out of doors Voices:

Out of doors Voices explains how the corporate has added the merchandise that clients requested for. 

This can be a excellent instance of how one can show to clients that you just’ve added what was lacking out of your product. You may ship an e-mail like this and invite clients to get again on board if they need.

It’s additionally a good suggestion to ship product replace emails while you add to your product line or providing. If someone has bought from you beforehand and likes your model, they’ll be more likely to come again and buy from a brand new class.

As an illustration, MeUndies is well-known for its underwear however despatched out this e-mail once they began providing robes and slippers, too:

You are able to do one thing much like encourage repeat purchases out of your retailer.

Forty-four p.c of customers say they’re more likely to develop into repeat patrons after a customized buying expertise.

However bear in mind, personalization goes past together with a buyer’s identify in an e-mail. Anyone can do this. Ecommerce shops are developing with tremendous revolutionary methods to personalize the buying expertise.

Some vogue and beauty manufacturers, as an illustration, are actually providing digital attempt-ons. Clothes model Farfetchpartnered with Snapchat to do that for its clients.

Prospects stand in entrance of their telephone cameras and say one thing like, “Present me a blue t-shirt.” The superior tech then maps it onto their our bodies in a sensible method.

However, by way of personalization, you need to do what is sensible on your clients. Perhaps they’re not Snapchat customers, as within the above instance. You recognize your viewers finest (or you need to at the very least), and you understand what issues to them. 

The garments at passionfruit, as an illustration, are designed and created by members of the LGBTQ+ group for members of the group and allies. 

Those that take into account this vital will proceed to purchase from this model regardless if they’ll discover a related hat elsewhere that’s cheaper. Why? As a result of they wish to be part of this mission.

One other method to make your product sticky is to supply folks one thing they’ll’t discover elsewhere. As an illustration, it could be a singular design or a completely revolutionary product. 

Spacestor, for instance, provides signature, modular workplace furnishings.

A direct-to-consumer (DTC) method makes this sort of factor simpler. The reason being you design and manufacture merchandise your self primarily based on clients’ exact wants and needs. 

8. Construct a Neighborhood Round Your Model

Model communities are an underutilized retention technique—but they are often extremely efficient. Certainly, 66 p.c of branded communities say the group has had a optimistic affect on retention, whereas 58 p.c say their group has elevated buyer loyalty.

It’s straightforward to think about how making clients really feel deeply invested in your model encourages them to stay round. However how do you construct such a group?

One method is to debate your model story. Over four-fifths of customers want a model’s values to align with their very own, so it is sensible to clarify how you bought began and what you hope to realize (past “getting cash”), similar to Mojo does right here:

This e-mail has larger credibility as a result of it’s written by (or at the very least attributed to) the corporate’s co-founder. And it’s additionally actionable, as a result of it incorporates a reduction code for first-time patrons:

That’s an ideal recipe for serving to new clients really feel purchased into your model—like they’re a part of a group.

9. Use Information to Higher Perceive Your Prospects

In keeping with Accenture, 91 p.c of customers usually tend to store with manufacturers that:

• Acknowledge them
• Keep in mind them
• Present them with related provides and suggestions

To do all that, that you must perceive your clients by digging into the information. Take a look at their looking habits, the content material and provides they’ve engaged with, and the merchandise they’ve seen (and bought) to serve them with promotions and suggestions that completely match their preferences.

Equipment model Bellroy will get it proper by sharing curated product collections, incorporating a topic line that makes it clear these suggestions are customized to the client’s tastes:

Even in the event you weren’t planning to make a purchase order, there’s an excellent likelihood you’d discover the gathering simply to see what Bellroy has chosen for you.

10. Create a Referral Program

I’ve obtained some unhealthy information for entrepreneurs: simply 38 p.c of customers belief adverts as a supply of brand name or service info, whereas solely 51 p.c belief social media platforms.

So what do they belief? Family and friends.

That’s proper; phrase of mouth is seen as probably the most dependable supply of data and suggestions. And probably the greatest methods to leverage it’s to begin a referral program.

The thought behind referral advertising is fairly easy: you reward clients for recommending your merchandise, usually by giving them a reduction code to share with family and friends.

But many manufacturers get it fallacious by including a bunch of difficult phrases and circumstances or forcing clients to leap by way of too many hoops.

Plus-size vogue model Torrid nails it with this referral e-mail:

Not solely do clients get the nice and cozy, fuzzy feeling of sharing a 40 p.c low cost, however they additionally obtain a present card for his or her troubles. That makes it nicely value sharing the love.

Retain Extra Prospects With Drip

From sharing customized product suggestions to analyzing the explanation why clients churn, lots of the methods on this article depend on constructing an in depth understanding of your viewers.

Drip provides you the information and instruments to make that occur.

Our segmentation instruments carry collectively all of your retailer, customer, and advertising knowledge, serving to you group clients primarily based on their habits and the way they interact together with your content material.

All of which helps you construct stronger relationships together with your finest clients (and win over those that aren’t so satisfied).

Discover out for your self by signing up on your 14-day free trial right now!