How Online Businesses Can Focus on Customer Retention to Improve Sales

How Ecommerce Businesses Can Strengthen Customer Retention to Improve Sales

It’s well-established that the majority of your business revenue will come from repeat customers. While new customers often make large purchases, the cost to acquire a new customer counteracts much of their spending.

 The ideal situation is to turn new customers into repeat customers, which can be done with the following strategies.

  1. Develop an intentional customer retention strategy

 You won’t create a noticeable increase in customer retention without an intentional strategy. While you will naturally generate some repeat business, it takes a concentrated effort across multiple channels to see a significant increase.


For example, you’ll need to closely track and monitor specific data to pinpoint the exact times when customers churn. Once you know where customers churn, you can investigate why they churn. It might be something as simple as being inconvenienced by the end of a free trial and not wanting to pay the premium price for your services. Or, it could be more complex. For example, if your GUI is difficult to use, your customers might give up after a few weeks.


There are plenty of nuances involved in creating a customer retention strategy. To learn more in-depth, read this customer retention guide published by Amplitude. Amplitude is a leader in customer retention and has helped hundreds of businesses execute successful long-term retention strategies. Amplitude’s guide contains a massive repository full of in-depth customer retention information and strategies that include auditing analytics and case studies.


  1. Don’t stop until you identify churn triggers

 If you’re struggling to retain customers, they’re churning for a reason. Don’t stop digging until you find the triggers. There might be more than one trigger, so don’t stop looking until you’re certain you’ve identified all of them.

 Potential triggers might include:


  • A bad customer service experience online or over the phone
  • Inability to return a defective product
  • Unwillingness to administer a partial refund for a major inconvenience that wasn’t the customer’s fault
  • A challenging process to move from a free trial to a paid account
  • No email warning prior to the first charge being made after a free trial
  • An inferior product that doesn’t work as advertised


  1. Provide over-the-top amazing customer service

 To retain customers, you need a stellar customer service team that goes above and beyond by exceeding expectations when resolving customer issues. Good service is no longer enough and customers aren’t understanding of mistakes.

It doesn’t take much to make customers churn these days. People have become used to instant gratification, which now extends into the area of customer service. An American Express survey found that 33% of customers are willing to ditch a brand after just one bad experience. Don’t let that bad experience happen with your customer service interactions.

 Many customers are quick to anger when customer service representatives don’t immediately resolve an issue or genuinely sympathize with the customer while they figure out how to help. Train your representatives to be genuinely empathetic and give them the freedom (within reason) to offer the customer several different ways to resolve the problem.

 Sometimes it’s not enough to offer a refund or exchange. Sometimes the best thing you can do is offer a refund and allow the customer to keep the product or continue using the service. Or, give them a $50 cash bonus for the inconvenience. Regardless of how you resolve customer issues, make sure the customer gets a better deal than they expected. Most people don’t have high expectations to start with, so it shouldn’t be that hard.

 When you go above and beyond to satisfy upset customers, they’ll often continue to do business with your brand.


  1. Create an enticing rewards program

 When your customers can get rewards for doing business with you, they’ll make more purchases. For example, most coffee shops have a reward system where customers get their 10th drink on the house. This is a simple rewards strategy, but customers love it and it’s easy.


The key to making a rewards program work is making it irresistible and simple. Give your customers free products, bonuses, cash back rewards, or store credit. When a rewards program is simple and easy, more people will participate.

 Improve the quality of service provided to improve customer retention

 Customer retention isn’t complicated. When you reach the right market and provide a high-quality product or service, you shouldn’t have a problem retaining customers. If you’re struggling to retain your customers, go back to the basics. Identify the problems and then create a plan to improve.

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