5 effective customer retention strategies

David Ha


Share with your friends!

It doesn’t matter whether your e-commerce store is newly established or has been around for years – focusing on customer retention is still crucial. Many e-commerce stores focus on attracting customers to their website, but the task of retaining these customers is often overlooked.

This leads to customers leaving the website or not returning after making a purchase. The best way to address this issue is to establish a solid customer retention strategy – a strategy that you can maintain year after year.

Furthermore, the average cost of acquiring a new customer is 5 to 25 times higher than retaining an existing customer. This is one of the reasons why the ability to reconnect with current customers plays a crucial role in the valuation of an e-commerce business.

And that is why your top priority should be to avoid or reduce churn rate.

In this article, we will share some customer retention strategies that will boost your sales.

Let’s get started!

Prevent churn with an upsell strategy

What is Churn?

Churn is the rate at which customers leave your business. It can be calculated in various ways, but ultimately it depends on the value of the customer or the revenue lost each month.

For example, a percentage of customers abandon their shopping carts on your website without making a purchase. According to a study by SaleCycle in 2019, over 84% of online shoppers abandon their carts every year, meaning that e-commerce stores are losing a significant amount of money.

5 effective customer retention strategies - It Startup
5 effective customer retention strategies – It Startup

Preventing churn is an important metric for any business that wants to maintain long-term growth. However, not many businesses actually pay attention to it and eventually fall into the trap of the harsh reality of the churn rate they face at the end of each year.

Whether you’re running a software company or an e-commerce website, preventing customer churn should not be underestimated.

How can you prevent customers from leaving?

Here are some steps that can help you prevent customer churn:

  1. Analyze the reasons for customer churn: It is important to understand why customers decide to leave. It could be because the product does not meet their needs, the service falls short of expectations, or the pricing is not reasonable. By analyzing and understanding these reasons, you can find appropriate solutions.
  2. Interact with your customers: Maintaining a good relationship with customers requires interaction. Make sure you always update them with the latest information about your product, send notifications and news via email or through social media channels. Additionally, listen to their feedback and respond promptly and professionally.
  3. Educate your customers about your product: An important factor in preventing customer churn is ensuring that they have a clear understanding of your product and the value it brings. Provide detailed information about the product, usage instructions, and the benefits customers can gain from using your product.
  4. Understand who is at risk: It is crucial to identify the customer segment that is most likely to churn. Through data analysis and statistics, you can determine the indicators and factors that users might consider when leaving. By understanding this segment, you can apply appropriate preventive measures.
  5. Identify your most valuable customers: In preventing churn, focus on maintaining a relationship with your most valuable customers. This means identifying those who generate the highest revenue and ensuring that you provide them with the best care and service.
  6. Measure your customer base: To better understand your customers and their needs, gather relevant information and data. This helps you build an overall picture of your target customer base and adjust your business strategy accordingly.
  7. Target a specific customer segment: Instead of expanding your customer scope, concentrate on a specific customer segment that you want to retain. This helps focus resources and efforts on building a strong relationship with this group.
  8. Provide better service to your customers: Always strive to deliver the best service to your customers. This may involve improving product quality, meeting requirements, and responding promptly to customer feedback.
  9. Upsell or cross-sell additional products: One effective strategy to prevent churn is upselling or cross-selling additional products to your current customer base. According to research by analyst Sucharita Kodali at Forrester, product recommendations play a significant role in 10-30% of e-commerce website revenue.

By implementing these steps, you can enhance customer interaction, understand their needs, and provide the best service to maintain satisfaction and avoid customer churn.

It sounds promising, but what is upselling?

Upselling is a process that is primarily aimed at increasing the average order value. This can be done by combining upsell products or services with the original products and services.

The idea is to ensure that at least one option is priced higher than what a customer would buy for themselves. This choice depends on the industry and type of business you are operating.

When exploring strategies for upselling, it is important to look beyond immediate profits and consider long-term customer satisfaction. In this regard, insights from startup books can provide valuable perspectives on optimizing revenue while building strong customer relationships.

Learning more from entrepreneurial books can provide valuable insights and strategies for optimizing revenue while maintaining long-term customer relationships. These books can offer suggestions and strategies to help you build an effective upselling campaign that benefits both your business and your customers.

Don’t overlook the post-purchase phase

Imagine that you have an e-commerce website and your goal is to attract a lot of traffic to it in order to sell as many items as possible. It goes without saying that you want to ensure that your customers are satisfied with their shopping experience, and not only do you want successful transactions, but you also want repeat customers and more sales.

According to PwC, a whopping 86% of shoppers are willing to pay more for a better customer experience. This highlights the importance of focusing on customer satisfaction, especially during the post-purchase phase.

The post-purchase phase plays a crucial role in online selling. Once customers have made a purchase, they have the potential to view your brand as a go-to option for future purchases. However, if you overlook this phase or fail to capitalize on it, you will miss out on numerous potential sales opportunities.

Once customers have made a purchase, they enter the post-purchase phase where they interact with your product or service and provide feedback through social media or on your website. This presents an incredible opportunity for you to not only advertise new products but also create brand advocates who will help you increase long-term sales.

To make the most out of this phase, it is important to focus on providing top-notch customer support that earns five-star ratings. Additionally, offering flexible return policies can go a long way in boosting customer satisfaction and encouraging repeat purchases. Furthermore, keeping track of your customers through automated post-purchase emails can help you maintain a strong relationship with them.

It may seem small, but even a simple “thank you” email can make a significant difference in enhancing your overall customer service experience. If you haven’t implemented these simple yet effective strategies in your store, now might be the perfect time to consider incorporating them and watch your sales soar.

Offering customers another chance to come back

Customers who have made purchases from you may have liked what you have to offer, indicating that they are aware of and trust your brand. However, the challenge lies in the fact that these customers have not made repeat purchases or have engaged in fewer shopping transactions. In order to incentivize them to come back more frequently, there are two key actions that can be taken.

Firstly, increasing the cost of each repeat shopping transaction can make customers more inclined to make that purchase. By making it slightly more expensive, customers may consider purchasing from you more often than they did previously.

5 effective customer retention strategies - It Startup
5 effective customer retention strategies – It Startup

Secondly, it is important to enhance the value of each repeat shopping transaction in order to entice customers. For instance, if your competitors are offering the same product at a significantly lower price, it becomes crucial to motivate customers to choose your brand over the competition.

Small business owners are constantly seeking ways to increase customer retention rates. Some may opt to participate in a race to the bottom by consistently providing discounts to potential customers, while others employ various incentives to encourage customers to return.

It is evident that repeat customers possess a higher lifetime value for your business. As such, we recommend enhancing the shopping experience on your website in order to encourage these customers to return time and time again.

Moreover, studies have shown that 75% of shoppers express a preference for brands that offer rewards. Implementing a rewards program or loyalty program for your customers would be an excellent approach to encourage them to visit your website more frequently. This will be further explored in the subsequent section.

Segment “loyalty program” of yours

A loyal program is a great way to keep your good customers coming back regularly, spending more, and encouraging referrals. These programs have been proven to be an effective tool for customer retention, although they are often not implemented effectively.

A good loyalty program is an important tool in any company’s toolbox. Unfortunately, most strategies follow the same old boring rule. If you’re wondering why customers have to collect stamps or points, use points for big discounts, earn points with every purchase, or can’t convert points into cash, the key to a successful loyalty program lies in segmentation.

5 effective customer retention strategies - It Startup
5 effective customer retention strategies – It Startup

Instead of just using one database, you can segment how you communicate with different groups. This will ultimately improve the performance of your loyalty program and show you what’s working and what’s not.

For example, you can create VIP tiers and segment your customer base by tier level. Offer special benefits to higher tiers, so that customers are incentivized to purchase more to reach the next level.

A good example of a segmented loyalty program is Elf, a cosmetics brand that offers three levels for their shoppers, in which they receive special perks like free products, birthday gifts, and various promotions. Pleasing your customers with gifts is important for improving customer retention rates, and we will discuss this further in the next section.

Surprise your customers with small gifts and gift packages

Customers are undeniably the lifeblood of any business. Without their support and trust, a company would struggle to thrive and grow. When a customer places their trust in a business, they not only become a reliable patron but also have the potential to transform into a fiercely loyal customer and even an enthusiastic advocate who willingly spreads the word about your brand.

However, satisfying customers is no easy feat. In today’s highly competitive landscape, where countless companies offer products and services similar to yours, it can be challenging to differentiate yourself from the rest. While some may argue that investing in extravagant gifts for customers is unnecessary or financially impractical, others believe that providing quality service and products alone should suffice to maintain customer satisfaction.

5 effective customer retention strategies - It Startup
5 effective customer retention strategies – It Startup

Yet, the truth is that it’s often the unexpected gestures that truly delight people and positively shape their perception of your company. Surprisingly, a whopping 81% of surveyed customers revealed that receiving a free sample significantly increases their likelihood of making a purchase. In fact, for 49% of shoppers, the allure of receiving a complimentary product ranks as the pinnacle of their shopping experience.

These statistics are not only eye-opening but also serve as undeniable proof that offering free samples can substantially boost customer retention rates. Of course, the viability of this strategy depends on your unique business model and the type of free product you can afford to provide to your loyal customers. However, it’s worth considering implementing this simple and cost-effective tactic in your online store to further satisfy and reward your most devoted clientele.


To maintain customers effectively, it is important to develop a deep and meaningful relationship with them. You need to treat your customers as special and valuable, and in return, they will show loyalty and positive feedback. Some of these customer retention strategies are crucial for the growth of your business, but they are often overlooked by e-commerce store owners who think that implementing them is too costly.

The truth is, you can start implementing these strategies today and reap the benefits! Use some of these customer retention strategies to improve the overall health of your business. By building a positive interactive environment with customers, creating unique and memorable shopping experiences, and providing quality post-sales customer care, you can establish a loyal and stable customer base. Furthermore, creating attractive promotional programs, sharing valuable content, and accompanying customers throughout their buying journey are also important factors in building a sustainable and successful relationship with customers.

Don’t miss the opportunity to embrace these strategies and apply them to your business. When you prioritize customers and create exceptional experiences for them, success becomes not only essential but also inevitable for the growth of your business.

Spread the word about this valuable post if you find it helpful.

Best Deals

Disclosure: Some of the links in the post above are "affiliate links". This means that if you click on the link and purchase the item, I will receive an affiliate commission. I would like to express my gratitude for your support. Rest assured that you will still pay the same amount with no extra cost to you. These are products I’ve personally used. You can read my affiliate disclosure in my Privacy Policy.

Join The Conversation

Share to...