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How to Increase Customer Retention and Encourage Customer Loyalty



In eCommerce, there is a significant advantage to having loyal customers. Reaching out to new audiences and converting readers and visitors into customers can be an expensive and time consuming process, boosting the value of high customer retention.


When companies have high customer retention rates, they can save thousands of dollars each year on advertising and marketing to new customers – in fact, statistics show that converting new customers can be up to 6 or 7 times more expensive than working with current and past customers. This puts an objective value on having loyal customers, as regular buyers can increase their worth to your company by up to 10 times the total of their first purchase.


Converting store visitors into customers is only half of the battle for eCommerce entrepreneurs. Encouraging customer loyalty requires more than catchy ads and good promotions; in order for customers to feel loyalty to a company, they must first feel a connection with that company.


Think about your own store, and ask yourself: what about my store’s shopping experience benefits the customer? Other than my products and reasonable prices, what can be done to further encourage loyalty from my customers?


Unsurprisingly, customers like to feel cared for by the companies from which they make purchases. In today’s world, there are hundreds of businesses out to make a quick sale without showing any regard for their customers. This can be an easy pattern to fall into, but it will not deliver the results you are looking for with regard to customer loyalty.


When marketing your products, remember to sell an experience as well as a product. With so many vendors selling similar products from similar manufacturers, there has been a global focus shift on what makes a business successful.


Customers are not loyal to a company because of their product as much as the shopping experience they deliver.


This puts an ever-growing importance on the practice of selling experiences and lifestyles. One well-known example of this would be technology-giant Apple. They’re products are competitive and innovative from a technical standpoint, but people are loyal to the company because of the experience they deliver with their products and stores.


In order to successfully sell an experience alongside a product, it’s important that you understand your customers. Identify their needs, and look for solutions you can implement into your store and marketing plan. Remember, customers purchase products for a reason. By understanding your customer and their motive for making an initial purchase, you can adapt your marketing plan as necessary. This will help you create an experience worth buying, and will result in high customer retention rates.


Remember, you are competing with other companies to deliver not only the best product, but the best shopping experience. In order to have loyal customers, you must have something to offer them that your competitors do not. Be available to your customers, and provide better customer service than other companies. Customers are far more likely to return to a store with excellent customer service, making it invaluable for achieving high customer retention.


It’s also important to recognize that your store is more than a store: it’s a brand and an identity. When customers see your store’s name or logo, they should associate it with some kind of brand story. By expressing your store’s identity and story, customers will feel more connected with your brand. They’ll have an understanding that you are about more than sales number and high conversion rates, giving you an edge over your competitors. 


It cannot be said enough that customer loyalty comes from a connection between your store visitors and the experience your store provides. Your customers are more than sales numbers on a screen, they are real people with jobs, families, homes, and needs. Each of your customers has their own identity, and no one wishes to feel like a number. Prevent this by personalizing every interaction you have with your customers. Personalizing interaction can be done in many ways, but some of the best tactics include:


  • Real people answering customer service lines, instead of automated machines.
  • Handwritten “thank you” notes with each shipped purchase.
  • “You might like…” shopping recommendations personalized to the shopping habits of your customers.


Part of the interaction process comes from emails, which play a key role in developing customer loyalty. Connect with your customers prior to their first purchase by sending them a discount code or free gift promotion. Continue this after they’ve made their first purchase, with “thank you” emails and more discount codes.


These are known as “lifecycle emails,” and they are key in encouraging customer loyalty.


The final piece of the customer loyalty puzzle is making it easy for your customers to purchase from your store again. This is a broad topic that can be achieved in countless ways, however the most common is the inclusion of customer accounts. Take a company like Pizza Hut, for example: customers are encouraged to continue ordering from the company thanks to their one-touch checkout design. When customers first order from Pizza Hut’s website, they can save their address and payment information for future orders. In addition, they can save their favorite recipes for quick access next time they order, and they can obtain rewards from making continual purchases. Each of these ideas can be implemented into your store, and will play a huge role in improving customer retention.


If you offer faster checkout options to existing customers, as well as a rewards system, why would they choose one of your competitors over your store?  In some cases, they may do this despite the convenience your store provides, however an easy and rewarding shopping experience is sure to keep a number of your existing customers around for future purchases.


Ultimately, it’s important that you create a personal connection with your customer.


Each of these pieces to the puzzle play a part in creating this connection, but the connection itself should be your end goal when striving for high customer retention rates. Never forget that making a sale is only the beginning of the process, as retaining customers plays a much more important role in your company’s growth. 

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