5 Ways to Increase Customer Retention in Your eCommerce Store

There are two defining factors for a successful online store. The first is how many sales you get and the second is how many of those customers you can retain. Increasing customer loyalty and retention is the smartest way to grow your store’s earnings. If you’re not figuring out how to increase customer retention, you’re missing out on a bounty.

Simply put, it’s cheaper to retain customers than to reach new ones. The trust and brand knowledge are already there, so getting subsequent sales can be easier.

In this article, we’ll go over five ways to increase customer retention in your eCommerce store. We’ll discuss how these methods work and why you should consider implementing them. Let’s get to it!

1. Create a Mailing List

There is a great reason why so many of the websites you visit insist on getting you to join their mailing list. Having you as a subscriber means they can reach out at any time.

They can send promotional emails, news, discount codes, and any other kind of message. In other words, once you join a mailing list, that website or online store can remind you of its existence constantly:

Those reminders can mean the difference between purchasing once from an online store and becoming a regular. If you run an online store, you want to increase that percentage of “regulars” or returning customers as much as possible.

There are a lot of great tools you can use to manage email lists and send campaigns, such as Mailchimp. Mailchimp has the benefits of working with WordPress and offering a free plan, which makes it a great option for honing your email marketing skills.

2. Set Up a Rewards or Loyalty Program

Reward and loyalty programs serve one clear purpose and that is to entice customers to spend more on your website. That means making bigger purchases and returning periodically for new transactions:

If a customer has the option of making a purchase from any of several online stores, the one with the best rewards program will often get their patronage. By “best” we mean offering decent rewards and not making these goals frustrating to achieve.

How much you can afford to spend on a loyalty program will depend on your margins and what kind of products you’re selling. If you can’t afford to include physical goods in the loyalty program, a smart workaround can be to offer in-store discounts.

For example, if a customer spends over $100, that can trigger a loyalty reward that gives them a flat fee or a percentage off their next purchase. This is not as effective as offering “free” iPhones, but it’s an easy-to-understand loyalty program that can help drive sales.

The great thing about WordPress is that it offers plugins for almost any scenario, including ecommerce stores wanting to set up a loyalty program. This roundup of the best loyalty program plugins is the perfect place to get started.

3. Offer Discount Codes

One of the fastest ways to get returning customers is to offer them discounts on future purchases. This can be particularly useful after someone makes their first purchase and has a good experience with it. That is because the discount code gives them an excuse to spend more money soon instead of overthinking it:

Membership discount codes don’t need to be particularly steep to be successful. Even a 10% discount code can offer a great value if it stacks for bigger purchases (as long as customers don’t abuse it).

Overall, the coupon only has to be good enough to get customers to the checkout screen. If the numbers look good to them, the coupon has done its job.

Offering coupons in WooCommerce is remarkably straightforward. If you use WooCommerce for your store, you can create as many coupons as you need and share them through any channel you want.

Some stores put coupon codes on the homepage so everyone can take advantage of them. If you want to improve customer retention, your best bet is to send coupon codes to existing customers using your mailing list.

4. Lower Renewal Rates

This method to increase the retention rate among customers only applies if you offer subscription services. Your ideal customer is one that retains their membership or subscription for years on end. However, that’s not the majority of users.

Depending on your customer demographics, a lot of your users might need to cancel subscriptions periodically to cut costs. Lowering renewal rates for those users is a smart way to try and retain as many of them as possible.

The best way to do this is to offer lower rates when a customer goes to cancel their subscription. Offering a lower rate at this point can help you build trust with customers, even if they decide not to renew at that point.

If you manage user subscriptions, you’re bound to have access to customer contact details. You can use these to reach out via email when a customer unsubscribes to offer them a better rate. This is doable manually for a small business, but you might need to automate it depending on how many customers you have.

5. Offer Simple Returns and Exchanges

You can run an amazing eCommerce business and get decent sales, but if you offer a subpar return or exchange process, all that goodwill will go up in flames fast. All it takes is a handful of bad reviews from customers who had difficulty making a return to bring down your store’s reputation or rating

It’s important to understand the eCommerce process doesn’t stop when a customer hits the Buy button or a product ships. After a customer gets their purchase, there’s still the chance there’ll be a problem with it and they’ll need to make a return or an exchange.

How you deal with this process will largely determine whether you get a happy customer and repeat business. Returns and exchanges will eat into your bottom line, but they’re a part of the eCommerce business that you can’t ignore.

In a nutshell, it should be easy for customers to find information about how to make returns or exchanges. That information needs to be available on your website, preferably on its own page:

The process should be fairly simple, relatively fast, and you should provide the customer with information about its status at every point of the process. If you process a return or an exchange successfully but it takes months without the customer getting an update, you can be sure they’ll leave a terrible review.

Conclusion

When you start an online store, a lot of your effort will probably go to marketing. You need to figure out ways to get users to your site and to transform them into customers. Once you start getting sales, your next big challenge is figuring out how to increase customer retention and improve customer loyalty.

Loyalty and retention go hand in hand. If you treat customers with respect and offer them good deals, they’re likely to keep coming back. With that in mind, here’s what we recommend to increase the retention rate:

1. Create a mailing list (and use it!).
2. Set up a rewards or loyalty program.
3. Offer discount codes.
4. Lower renewal rates.
5. Offer simple returns and exchanges.

Do you have any questions about how to increase customer retention in your online store? Let’s talk about them in the comments section below!