Ecommerce is booming, getting new customers is getting harder and pricier. How do you grow in cut-throat competition? You work with what you already have – and paid for!
Retention marketing and brand equity enables sales to your existing customers.
It is working to keep customers as such for longer, buying often and buying more. It is the active marketing effort to get repeat orders and loyal customers.
It is the exact opposite of relying on one-time buyers where you have to acquire new customers all the time, letting them go after just one sale.
In ecommerce, retention marketing are the activities that make customers shop from you repeatedly. It aims to maximize the return from a customer. Retention marketing proactively uses data for ongoing engagement, personalization of the shopping experience and winning the loyalty of customers.
New customers cost 5 times more than keeping an old customer.
The chance of converting a new customer is 5-20% while the chance of converting an old one is 60-70%.
Making retention marketing a priority over constant acquisition, you:
Naturally, at launch, you have to get some traffic and traction first. But you should start out with retention in mind. You should set up for it from customer #1. How you start out treating your customers will impact long-term retention and loyalty.
Note: Unfortunately, retention is tied to your products. It’s applicable to most but not all products. If you sell things like wedding items or boats, we suggest you work on a referral strategy instead to make sure people spread a word-of-mouth on your behalf even if they’re not likely to buy from you again (for obvious reasons).
How to know if your customer retention efforts are working? Just like you monitor your traffic, conversions and other essential ecommerce metrics, you can check the health of your retention, too.
Also known as repeat purchase rate, this is the share of returning customers out of all customers. It shows whether you manage to retain customers or let them slip away after 1 order. A retention rate of 28% is quite good, our recent report on DTC brands found.
More about repeat purchase rate
That’s the average time between orders or how often people shop from you. It can be days, weeks, months, even years.
Knowing how often your customers shop from you, you can time your marketing campaigns perfectly and get more orders with less effort. Our reports says a TBO of 102 days is the average.
More about order frequency
Naturally, more orders mean stronger loyalty. This metric tied to others like CLV and order frequency may mean that people stay with your brand for years and/ or shop very often, both of which are great. We found that 1.8 orders is the average in ecommerce.
That’s the all-time amount spent by a customer in your store. It’s probably the most important retention metric in ecommerce. It helps you set acquisition budgets and estimate revenue goals. The absolute average is $168.
More about CLV in ecommerce
Customer satisfaction is at the core of customer loyalty.
If customers are unhappy, though, your retention rate will be low. Ratings of the shopping experience and direct feedback will explain why you lose customers or why they love you.
Looking at all these ecommerce retention metrics, you should be able to map your customer lifecycle stages: how often people buy and for how much, when do they become profitable repeat customers, how much you can spend on their acquisition, why are you losing customers, and more.
Need to measure your store’s retention metrics?
Here’s where Metrilo can help.
Retention marketing relies on understanding your customers and using insights to stimulate repeat orders. The more you know about their buying behavior, the better shopping experience you can offer. Without such data, you’re just shooting in the dark, sending one-size-fits-all offers that do little if anything to retain your customers.
So to do retention marketing, you need to track customer behavior and tailor your offers, set up campaigns and engage customers based on the data.
Metrilo provides this data by automatically tracking customer behavior on your site. You get:
Related: How cohort analysis helps retention
Probably the most useful part of the Metrilo retention platform is the retention analysis, which will tell you:
You will know what works for customer retention and will be able to do more effective marketing.
Some examples of the insights you may discover with a retention marketing platform:
Here a few of the use cases for the insight you get with Metrilo’s retention analysis and how to turn them into extra sales:
Not sure how often people need your products and how many times they buy from you? We have those metrics for your store calculated with historical data – ready to turn your marketing upside down.
Thanks to data, you can be well-prepared and proactive in driving repeat sales. How to reach them exactly when chances of conversion are the highest and not waste email “bullets” in vain.
How to use data to re-engage customers and not let them slip away.
Learning from the historical data Metrilo processes, you can predict the behavior of this year’s holiday shoppers and turn them into loyal customers.
You can drop the badly performing coupons and use more of those that bring you quality customers, good fits, who become loyal to your shop.
Analyzing your customers by the month of their first purchase will give you a pretty good picture of seasonality in your niche.
Some products stimulate more customer loyalty and repeat orders than others. With Metrilo’s product cohort analysis, you’ll know which those products are to use in your marketing and get higher LTV.
Knowing where you stand with retention now, you can start improving, implementing the best customer retention strategies ecommerce brands use.
Metrilo’s mission is to help you build your ecommerce brand and win your place in the customer’s heart. We share what we learn from our daily work with product innovators and founders here. Subscribe to our weekly newsletter to get the freshest lessons and conquer your niche.