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The golden rule of online transactions seems to be that it is cheaper and more efficient to work on your current customer base rather than working harder and investing more in getting new customers. In today’s online eCommerce environment particularly, this holds truer than before because of increasing costs of ad impressions, conversions and clicks.

If you are still undervaluing customer retention and are an ardent believer of spending greater amounts to target new audience, then read on to find out how doing the latter may be damaging for your business.

According to the Cross-channel Marketing Report published by eConsultancy, up to seventy percent of the companies lament that it is more expensive to acquire a customer than to retain an old one. Although this seems to be a disappointing figure on first glance, it is relief for businesses as they can build on to their customer base of loyal clients within their limited budgeting.

The cost of acquiring a new customer is usually 6 to 7 times more than keeping your existing customer base. What Carrie Johnson from Forrester Research said a few years ago is more valid than ever: retention proves to be a lot more cost effective than acquisition.

Here are some tips to keep your existing customer base loyal to you and to keep them coming back to you again and again!

1. Making Use of Customer Accounts

Customer accounts are a good way of keeping track of your customer base. You can regularly send them promotional mail. Plus, it is easier for you to target a familiar and acquainted audience and resell your products to them.

However, customer accounts can be tricky too. From the customer’s point of view, making an account can be hassle. And to put it across honestly, it can be a huge turnoff when you stumble online, across something you desire desperately but simply cannot get past through the annoyingly long subscription forms or customer account forms.

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To make this a win-win situation for both, the following can be done:

  • Let any newcomers place an order for the products they desire. After the process is complete, prompt them to create an account for future promotional deals and discounts.
  • Additionally, you could cut down the customer account form to a bare minimum and ask the online customers only for their email address. Follow the principle of ‘less is more’. The easier you make the registration process for customers, the more you will encourage them to buy again from you.
  • You could later shoot out an email to the customers asking them for more details regarding their customer account.

2. Customer Loyalty Program

Your customers will keep coming back to you if you make them feel welcome and valued. With a customer loyalty program, you entice the customers to shop more with you to earn great deals. The more your customers shop from you, the more they gain in terms of discounts! This is an ongoing cycle meaning greater profitability for you.

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Download WooCommerce Loyalty Rewards Plugin

According to the book ‘Leading on the Edge of Chaos: The 10 Critical Elements for Success in Volatile Times’ by Emmett Murphy, customer profitability increases over the time period for a retained customer. Also, what may come across as a pleasantly surprising fact for eCommerce business owners is that a mere two percent increase in customer retention brings about the same profits as cutting costs by ten percent.

Because of your customer loyalty program, you can also distinguish amongst your customers based on two criteria of loyalty and revenues generated. According to two renowned researchers Reinartz and Kumar, ‘true friends’ is a category of customers which are not only highly loyal to you but also generate revenues for you. Another type of customers is the ‘butterflies’ which are not that loyal to your company but generate revenues for you.

In the context of an eCommerce website, the customers belonging to category ‘true friends’ might be who keep visiting your website and also place huge orders with you. They purchase frequently and are very profitable for you.

Similarly, the ‘butterflies’ will be those who visit the website very frequently and may also buy repeatedly but the total amount of orders placed by them is not highly profitable for the company.

Considering both these scenarios, it is clear that you should be providing more incentives to the first category i.e. ‘true friends’ as they are comparatively more profitable to you than the other customers who although are frequent visitors of your eCommerce business but are profitable customers.

For both these categories, different strategies can be employed by the eCommerce website. For instance, for the customers falling in ‘true friends’ category, the eCommerce business could reward them loyalty points based on their purchases. The points can later be redeemed for other purchases. This will encourage them to buy more from the eCommerce website.

In sharp contrast, the ‘butterflies’ are not that profitable. As the researchers Werner Reinartz and V. Kumar interestingly point out in their article ‘The Mismanagement of Customer Loyalty - Not All Customers Are Created Equal’, the best way to extract more profits from ‘butterflies’ is to milk them for as long as they are purchasing from your business. Although a business may be able to only retain them for a short amount of time, the eCommerce business can still make the most out of this category of customers.

An eCommerce business, for example, can encourage them to shop more by presenting them with similar shopping choices whenever they purchase a product and some of the top ecommerce platforms are making this easier for the owners with different sorts automation tools and features. So you can target this type of customers a bit more aggressively than the ‘true friends’ category to entice them to purchase more.

3. Email Marketing

Another way to increase customer retention and to keep customers repeatedly coming to your website is to introduce email offers. Email subscription seems to put off customers and many are reluctant to sign up for it. An interesting way would be to offer them an immediate discount on signing up for subscription.

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Check Out Receiptful, a New Service which handles email marketing system designed to increase customer lifetime value. We have also covered opt-in plugins a few times here on WPLift, using one of these plugins will greatly increase signups for your mailing list.

4. Social Media

With the rising use of social media, businesses are fast learning tips and tricks on how to increase customer retention with the help of social media. For example, many ecommerce businesses have a strong social media presence on Facebook, Twitter and other social media websites. Customers can be offered rewards for their likes, following and their check-ins.

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For customers making frequent check-ins on Facebook, some rewards can be introduced. Not only will the reward on check-ins entice more shopping, the check-ins will also promote the business to people present in the social media circle of the customers.

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OfferPop allows you to run special offers, coupons and other deals on Facebook.

5. SSL & Trustmarks

According to a Gartner research, up to seventy percent of customers have terminated online orders because they did not trust the security measures of the website. Website certification is absolutely necessary in order to retain existing customers and bring in new.

SSL or Secure Sockets Layer is a standard security technology which establishes an encrypted link between a client and a server. SSL allows secure transmission of sensitive information such as credit card numbers and login credentials. SSL securely transmits data of millions of people on internet, daily. It is of special use when conducting online transactions or when transferring confidential information. In layman terms, online secured websites have a website address beginning with https instead of http. They also display a lock icon as well as a green address bar. These signs ensure customers of the validity of any website, prompting them to purchase more and frequently from an ecommerce business.

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Using Trust marks are proven to increase conversion rates so using them for your eCommerce site should provide a good return on investment. Read this post to see which marks are the most effective.

6. Split Test Everything

Split testing, also known as A/B testing, is a method whereby ecommerce business can conduct random and controlled experiments to observe and conclude how certain changes to the website can lead to increase conversions. Some of the areas in which split testing is used are text, visual elements and layout.

In split testing, it is also observed how a website user gets from page A to page B. This plays a vital role from beginning to end and impacts revisits of customers. If the customer finds it bothersome to go from home page to their desired page, they will visit less frequently and conversion rates will drop down too.

With the help of split testing, an ecommerce business can conduct an experiment of how elimination of excess pages and text can result in increased number of conversions and higher customer retention.

If the text is not to the point and the call to action is not clear, you may be losing out on your customer midway, thus resulting in loss. Hence, split testing can prove to be beneficial. It is better to spend some time and learn how to retain your customers than to lose out on your existing customers in a much harder and damaging way.

Take a look at our guide to A/B Testing in WordPress.

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That’s about it. Let me know in the comments if you’ve used any of these techniques and what other tips you would give to a budding ecommerce entrepreneur.

Author Bio:
Catalin Zorzini is the founder of Inspired Mag web design blog. He likes hot soup and hot jazz.

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2 thoughts on “6 Tips for eCommerce Websites to Increase Sales & Improve Customer Retention

  1. Some very nice tips thank you. I always recommend to my clients about getting an SSL certificate and there is even some chatter now that Google looks more favourably on your website if it has an https address.

  2. Yeah that’s right free classified ads websites are the best and free platform for those entrepreneur who can’t be afford paid marketing tools. A US based free classified ads posting website deal sheel is a good platform for free online advertisement where any one can freely and easily post his/her ad.

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