How to Start Your Ecommerce Retention Strategy?
Deepak Wadhwani
AI | Manufacturers Industry 4.0 Smart Cities| Ecommerce, Tech & Marketing Leader | Ex-Qualcomm, Intuit, T-mobile | Projects 50+ Countries
This post was originally published on PROS ecommerce website.
Ecommerce businesses have become increasingly competitive, with online stores websites constantly coming up with new ways to acquire costumers. There are various important ecommerce strategies which need to be followed to get more loyal customers. Ecommerce retention being the one because the focus is on retention marketing and as the words suggests, it helps to retain customers. Ecommerce businesses (from small stores to large industries) began adopting customer retention strategies which simply prevents the customers from going to the other brands/sites and retaining them through customer loyalty programs or other initiatives. Customer relationships are important, the stronger the bonds, the stronger the company.
This is not to say that customer acquisition is not important, indeed it is, but perhaps not as important as customer retention.
According to the Harvard Business School, "increasing customer retention rates by 5 percent increases profits by 25 percent to 95 percent."
Now you know why an ecommerce retention strategy is absolutely essential. So how does one launch a successful strategy?
Measure Key Customer Metrics
In order to find out how well you’re doing on the customer retention front, you need to calculate the worth of each customer over the whole shopping cycle and calculate the customer lifetime value (CLV).
When Retention Marketing Makes More Sense?
If you have a new ecommerce site, then your customer data base isn't going to be very big, so retention marketing doesn't mean a whole lot here.
What You Sell is Important
Common items or products that are likely to be purchased over and over again will benefit from retention marketing.
Reselling to Current Customers is Profitable
It usually costs less to sell products to an existing customer; moreover, the more times a customer buys from you, the stronger the relationship, the more powerful the referrals and the more new customers you gain.
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