Every brand using Shopify needs to focus on customer retention if they want to thrive, not survive, long-term. 

It’s not enough to only acquire customers or simply engage with customers. 

Without retention marketing strategies to turn one-time shoppers into loyal, repeat customers, you’re missing out on the most valuable customers your Shopify business could have. Here’s why:

Retained customers have a higher AOV

It’s no secret: customers that spend more are better for your business. But did you know that with every purchase they make, your most loyal customers spend more each time?

Research by RJ Metrics showed that of your loyal customers, your top 10% spend over 3 times more per order than the bottom 90% of your business. If that seems crazy, this is even crazier: your top 1% loyal spenders spend 5x more than your bottom 99%.

Your most loyal and retained customers don’t just love you, they love buying from you!

Retained customers are more likely to convert

So if your repeat Shopify customers make more valuable purchases, it probably takes more effort on your end to make those more valuable purchases, right?

Wrong! With customer retention strategies in place, your retained customers are actually more likely to convert than first time buyers. 

To accurately track both first time purchases and repeat purchases (and all the events that lead up to the purchase), Littledata’s ReCharge connection is the perfect integration for Shopify stores, particularly subscription stores.

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Customers that have purchased from you only two times previously arenine times more likely to convert when they land on your store. Even if you’re operating with a small average order value (AOV), you can make huge strides with your bottom line with the right retention strategies in place.

Repeat customers have already been through your customer journey (i.e. from discovery through consideration through purchase and post checkout). This means they know and understand your total brand experience

If you’ve done your part to make the customer experience exceptional, customers will be more motivated to add more products to their carts in the future (and re-live their positive shopping experience from before).

Retained customers can’t help but talk about your brand

Your user-generated content and other social proof can have a profound and lasting impact on your Shopify store’s traffic, conversion rates, and profits. 

Customers that share their purchases and leave reviews will influence the buying habits of everyone who sees the content they create. 

The more often customers shop with you, the more likely they are to refer their friends to a store, and with the power of a referral program, you can help motivate your most loyal brand advocates to spread the word about your products.

By giving both types of advocates a reward for referring (and giving their friends a reward for accepting the referral) you turn your brand advocates into a self-powered marketing machine that churns out more loyal and retained customers exponentially. Win-win.

Retained customers come back during your most profitable seasons

As soon as BFCM campaigns come to a stop and the ROI is being analyzed, many Shopify businesses (particularly Shopify Plus stores) already begin planning for next year. 

For your repeat customers, you never have to wonder if they’re going to come back during your busiest sales season.

While most shoppers will spend an extra 17% more during the holiday season, your retained customers will spend 25% more all on their own! 

While you might want to make sure you’re making the most of Black Friday Cyber Monday, your efforts should be focused on your top customers and making sure they remember that buying from your store is a top option

Retained customers are more likely to return

At the beginning of this article, we mentioned that retained customers are more likely to convert. However, before they convert, they have to first find their way back to your store. 

Luckily, the odds of a customer making a purchase gets better and better with each sequential purchase they make. 

After one sale, a customer has a 27% chance of converting again, but after a second and third sale, their chances increase to a staggering 54% chance of returning. 

Tracking customer retention is…simple?

Tracking customer retention may seem like a daunting and time-intensive task. Luckily, many of the key metrics that measure ecommerce success and retention are things you’re already keeping an eye on.

No matter how intensely you focus on retention, perhaps the two most important metrics to track are: 

  1. Repeat purchase rate (RPR) – the percentage of your current customer base that has purchased for a second time. This metric is a solid indicator of the value you’re providing to your customers.
  2. Average order value (AOV) – the average dollar amount spent each time a customer places an order on your store. To calculate AOV, simply divide total revenue by a given number of orders.

As your customers become more engaged with your brand and move from being simply acquired to retained, these metrics should give you a square idea of the affect more retained customers are having on your bottom line (and your customer lifetime value). 

Two other significant metrics are referral traffic and customer churn rates

  1. Referral traffic – this is easy to see with a Google Analytics integration and easy-to-use loyalty and retention software. Referral traffic will help you know whether you need to hone your referral messaging or change the value of a referral offer.
  2. Churn rate – for subscription stores especially, Shopify merchants live and die by churn. This is the rate at which customers stop subscribing to your store (aka the rate of “come and go”). Churn is the flip side of your repeat purchase rate since it tells you how many of your customers shopped with you once but didn’t bother coming back. Knowing this number will help you accurately measure the success of your combined retention strategies.

Retained customers are your best customers

Even after landing sales, your work isn’t done. The more time and effort you invest in engaging with your existing customer base and motivating them to be loyal to your store, the easier it will be to bring them back and push them to make a repeat purchase. 

Start building the brand loyalty that will make your Shopify store a success story. 

 

This is a guest post by Tim Peckover, the Growth and Content Marketer at Smile.io who lives for a good book, strong cup of coffee, and building community. Smile.io provides easy-to-use loyalty programs to help businesses transform one-time sales into repeat, loyal customers.