Understand Customer Retention For Long-Term Success


Customer retention is an over-arching process that you need to build into your Shopify store.

You can’t just add a loyalty program and call it the day. It’s something you have to consider at all times and work to improve your retention at all levels.

I like to think of customer retention is the second stage of customer acquisition.

With customer acquisition, you get a new customer to show up and buy from you. When you can acquire a regular supply of customers at a profitable cost, your customer acquisition is optimized.

With customer retention, your focus is on getting them to come back to buy again (and again and again). That means you need to be nurturing their experience so they want to come back and buy. “Experience” meaning everything you do: the emails you send, the messages you use, the offers your create, the product experience itself.

Acquisition is much more transactional while retention is more behavioral.

If you’re familiar with the concept of churn, customer retention is the direct opposite. Churn is customers who left over time, retention is customers who stuck around. Just like how churn has a measurement (churn rate), customer retention has a measurement (customer retention rate).

Customer retention rate is more common with subscriptions and stores that have a recurring component. Those stores will get the next order by default unless the customer cancels.

For non-subscription businesses, Repeat Purchase Rate is often a better measurement than the customer retention rate. Repeat Purchase Rate makes the recurring aspect optional and gives you a better idea of how you’re performing overall.

Once you know your retention rate (or Repeat Purchase Rate) and can easily track it, then you can start the process to optimize it.

If you’d like to know what your Repeat Purchase Rate, Repeat Customer Insights calculates it for you automatically along with dozens of other customer retention metrics.

Eric Davis

Discover where your best customers come from

Going beyond simple attribution, Repeat Customer Insights lets you analyze and segment your customers by who first sent that customer your way.
This will let you find the best sources of long-term customers, not just anyone who orders.

Install Repeat Customer Insights for Shopify

Topics: Customer loyalty Customer retention

This originally appeared on the LittleStream Software Blog and is made available here to cast a wider net of discovery.
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Steve has entrepreneurship in his DNA. Starting in the early 2000s, Steve achieved eBay Power Seller status which propelled him to become a founding partner of VisionPros.com, a contact lens and eyewear retailer. Four years later through a successful exit from that startup, he embarked on his next journey into digital strategy for direct-to-consumer brands.

Currently, Steve is a Senior Merchant Success Manager at Shopify, where he helps brands to identify, navigate and accelerate growth online and in-store.

To maintain his competitive edge, Steve also hosts the top-rated twice-weekly podcast eCommerce Fastlane. He interviews Shopify Partners and subject matter experts who share the latest marketing strategy, tactics, platforms, and must-have apps, that assist Shopify-powered brands to improve efficiencies, profitably grow revenue and to build lifetime customer loyalty.

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