Senior Product Marketing Manager
Reading Time: 5 minutes
As a marketer, you’re probably well aware of the importance of a good customer retention strategy. We know that it’s easier, cheaper, and more profitable to keep an active base of loyal customers rather than constantly acquiring new ones.
With this in mind, it makes sense that customer retention is high on the priority list.
However, keeping people engaged with your brand can be easier said than done. Sure, it’s always nice to recognize and reward loyal customers with things like special content, discounts, and gifts every now and then.
To truly understand what drives customer loyalty, you need to be able to properly analyze it.
In this article, we’re going to discuss the importance of customer retention metrics and analytical reports. We’ll also look at the most useful types of retention reports for your retention strategies.
With this, we’ll give you practical recommendations on what kind of action you should be taking, based on the data they provide.
What is Customer Retention and Why is it Important for Your Ecommerce Business?
The most basic goal of your ecommerce business is to attract customers to your online store and encourage them to make their first purchase.
If your initial marketing is successful and you’re getting plenty of one-off purchases, that’s great! But what comes next?
If your customers are leaving after their first purchase and never coming back, you can find yourself stuck. It can lead to an expensive and time-consuming cycle of constantly trying to keep the new customers flowing in.
Of course, a solid acquisition strategy is a great thing to have, but is it enough to grow your business and make it more profitable in the long term?
Attracting each new customer costs up to five times more than keeping an existing one. With this in mind, it’s clear that customer retention is a must if you’re looking for consistent growth and stability.
To successfully build your retention strategy you need to know your customers and their motivations—what exactly are they looking for? What are the main differences between your loyal customers and those that only purchase once?
In short, you need actionable insights on how to keep your existing customers and how to re-engage with those who didn’t return yet. That’s where retention reports are here to help.
For a more detailed view on why data-based retention is important, take a look at how to use data-driven customer retention.
The Most Important Retention Reports to Check Regularly
As is the case in all types of marketing analytics, some metrics take priority over others.
Make sure you’re regularly tracking the following reports to compare your performance over time. Spot areas of improvement and build a more sustainable repeat customer base.
- Returning Customer Rate: Your most important metric is your returning customer rate. This tells you the percentage of customers who want to come back to you after their first purchase.
It also gives you the clearest insight into whether your customer retention strategies are successful or still need work.
- Revenue From Returning Customers: To understand the true value of your returning customers, it’s important to track their impact on your business revenue.
This metric shows you the total share of revenue gained via repeat customers. It also highlights how significant your loyal customer base is.
- Returning Customers AOV: To get a clearer picture of the value of each returning customer, you need to find out their average order value. This metric does that by showing the amount of money returning customers spend in your store on each transaction.
- Revenue Split by First-time/Returning Customers: This is a direct comparison between first-time and returning customers—who brings in the greatest value?
This metric shows you where most of your business is coming from and helps you to make/adjust marketing strategies accordingly.
- Customer Count Split by First-time/Returning customers: This metric is a simple comparison of how many of your customers make repeat purchases and how many are just one-time buyers.
Stack up Your Retention Rates With Benchmarks
It’s one thing to get familiar with all of your most revealing retention metrics. However, the results aren’t fully informative until you’ve put them into context with similar businesses to yours.
That’s why measuring your performance by industry benchmarks is an important step to seeing where you really stand.
Your marketing platform should offer regularly updated ecommerce benchmark reports. Tailor them specifically to your ecommerce store.
It’s useful to know that the average ecommerce retention rate is, say, 24.9%. However, different industries have different circumstances and the results can vary widely.
Built-in benchmarks remove the guesswork. They make it easy to measure your retention metrics against similar merchants in your industry.
Instead of having only your historical data to compare yourself to, you’ll be able to get a clear picture. This will show you where you stand against your competition and allow you to act on it with data-driven confidence.
Take The Guesswork Out of Retention With Customer Lifecycle Stages
Customer lifecycle marketing involves adapting to your customers during the different lifecycle stages. You need to adapt to their changing needs and behaviors.
For example, you wouldn’t send the same messages to a brand new subscriber as you would to a loyal repeat purchaser, would you?
The goal is to reach out with timely, personalized messages that match the current status of each customer. This way you can naturally increase their repeat purchases as well as their overall customer lifetime value.
That’s what makes customer lifecycle stages so useful—they take the guesswork out of customer retention marketing. In short, lifecycle stages help you to:
- Know which customers you need to engage with and why
- Prioritize your efforts towards those with the most impact on your revenue
- Choose the best retention strategy for each customer and reach out to them with personalized messages
Customers are categorized into simple orders of priority. These include:
- Loyal champions who you must cherish
- Recent shoppers with potential who you must nurture
- High value, at-risk regulars who you must reactivate
- Completely cold former customers who it’s time to deprioritize
With these, you can better understand what kind of strategy to approach each type of customer with.
Based on this knowledge, you can then reach out with personalized, automated messages suitable for their status. For example, re-activation workflows for at-risk customers, or exclusive campaigns for loyal champions.
Then, ensure that they are getting the care and information that they need to stay with you in the long term.
Learn more on how you can improve your customer retention with lifecycle-based segmentation.
The problem for many marketers is not knowing what to do with the data they’ve collected about their customers.
It can be tough to know how to transform complex formulas and calculations into actionable insights and effective, personalized messaging.
Now, your all-in-one retention reports and tailored industry benchmarks are available in just a few clicks.
With this data at your fingertips and your customer priorities clearly highlighted by their respective customer lifecycle stages, it’s never been easier to make actionable decisions that grow your returning customer base, revenue, and overall business stability.
Build a strong customer retention strategy based on real-time retention reports with Omnisend. Get your free trial today!