7 Best Customer Retention Marketing Strategies in 2024

‍Most ecommerce businesses allocate a significant budget toward customer acquisition to drive initial sales.However, a study shows that loyal online customers are worth 22 times more to your business than new ones.While acquiring new customers is essential, nurturing the existing ones is crucial for long-term business success.

Source: TwitterKunal Shah, founder of CRED, a fintech company, emphasizes that a company's commitment to growth is best shown by excelling at customer retention marketing strategies, achieving results that are ten times better than customer acquisition.This blog will go over what customer retention is, strategies to boost your retention rates, and the tools you can use to encourage your customers to repurchase from your store.What is customer retention and why is it important?Harvard Business School says, “By assessing how consistently [your customers] interact with and advocate for your brand, you can determine their loyalty and engagement.”A solid customer retention plan acheives two things: It keeps your customers enaged and builds loyalty. Which, in turn, drives long-term growth and profitability for your business.Let’s look at the the benefits of investing your marketing efforts into customer retention:

1. Affordability: High customer retention leads to more profit and saves cost. Because your long-term customers tend to buy more, they positively influence word of mouth and are less sensitive to price.
2. Lower marketing costs: Keeping existing customers is more cost-efficient than acquiring new prospects. The cost of acquiring a number of new customers is 5X more expensive than retaining current ones.
3. Return on investment: Retaining customers is not only cost-effective but also contributes to long-term business success and profitability. A  5% increase in client retention rates can result in a 25–95% increase in profits.
4. Improved cross-sell and upsell opportunities: High customer retention gives you access to additional data points. These insights help you make better product recommendations.

McKinsey found that satisfied and engaged customers led to a 15–25% increase in cross-selling for businesses.

5. Strengthened brand loyalty: Long-term clients are more loyal and spend more money. Their average cart size is also higher since they are generally less price-sensitive and more eager to try new things.

7 best customer retention marketing strategies that actually workWith more people shopping online and growing competition, encouraging customers to continue shopping with your brand can be a challenge. That's where customer retention marketing strategies come into play.Here are seven proven strategies to help you build lasting customer relationships, encourage repeat business, and strengthen brand loyalty.1. Personalized experiences80% of consumers are more likely to buy from a company that provides a tailored experience. By personalization, you tailor your customers' shopping experience to their individual preferences.So, instead of sending out generic promotional messages, customize your messages based on customer data, such as past purchases, location, and browsing habits.According to a research study from McKinsey & Company, 71% of consumers expect personalized communication and product recommendations.Here are four ways you can personalize messages you can send to your target audience:

• Re-purchase reminder: For products like skincare or groceries that customers need to buy repeatedly, set up automated reminders to encourage them to return to your site and restock.
• Targeted marketing: Use customer data to send personalized messages based on what shoppers have viewed or purchased, highlighting new arrivals or special discounts they might be interested in.
• Location-based offers: Promote location-specific deals, like free shipping, by sending targeted messages to customers in that area.
• Abandoned cart reminders: Automatically remind customers who left items in their cart, offering a small discount to motivate them to complete their purchase.

2. Create a loyalty programSales and discounts are the go-to strategies ecommerce brands use to encourage customers to make more purchases. However, they can also harm your brand’s perceived value if they’re used too often and carelessly. One of the most effective ways to get customers coming back is to build a customer loyalty program.Loyalty programs reduce churn and boost customer retention and lifetime value. And it helps that 84% of customers say they’re more likely to engage with a brand with a loyalty program. Because you are building a better customer shopping experience, you’re also improving your brand’s average order value (AOV) and customer lifetime value (CLV).Here are three types of ecommerce loyalty programs you can take inspiration from:

• Subscription-based loyalty programs: Customers pay a membership fee (monthly or annually) to access special perks and benefits.

• Points-based loyalty programs: Customers earn points for each purchase they make. These points can be redeemed for rewards like discounts, free products, or exclusive experiences.
• Tiered loyalty programs: This program is like climbing a ladder of rewards. Here, customers progress through different tiers by earning points or spending more, unlocking better benefits and more exclusive rewards at higher tiers.

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For example, Teaspressa, a tea brand, launched their loyalty program with Rivo on its Shopify store and saw 3X more purchases by members.At Teaspressa, shoppers earn points when they sign up and can move up tiers with every purchase.Get started with your loyalty program with Rivo.3. Quality customer supportWhile ecommerce stores make shopping more convenient, they often don't provide the same quality customer experience as physical stores. And we already know that customer support can make or break your brand.To set up excellent customer service for your ecommerce store, keep these basics in mind:

• Choose a customer support tool: Use a customer support tool like Gorgias, that works with Shopify and helps manage customer relationships.
• Create a knowledge base: Develop an FAQ section that customers can access for self-service support.
• Install live chat support: Offer real-time help so customers get immediate answers to their questions.
• Train your support team regularly: Continuous training keeps your team up-to-date on your products and polices.

4. Showcase your real customersWhile you’ve probably heard the term “user-generated content” before, you may not realize that real user generated content is…generated by your customers. Not by actors. This definition has gotten extremely blurry in the marketing world (thanks, media buyers!).User-generated content can build trust, drive engagement, and create real connections with your audience. Because you’re showcasing real people (your customers, or “users”) using and loving your products. It’s relatable, and so it converts better.But, how do you get UGC content? Ask your customers. And incentivize them with points.For example, check how AVA ESTELL, an all-natural wellness brand, uses UGC to show customers experience with their brand. This builds trust and also increase their conversion rate. 

5. Re-engagement campaignsRe-engagement marketing campaigns are a powerful way to reconnect with inactive customers and boost retention. These campaigns usually involve sending emails designed to catch the attention of people who have lost touch with your brand.They’re especially important for businesses that count on repeat purchases. The key to writing effective email campaigns is using eye-catching subject lines that encourage inactive customers to re-engage.Start by identifying which customers have become inactive. Use metrics like email open rates, click-through rates, and purchase frequency to help you. Once you’ve identified these customers, launch a re-engagement email campaign to bring them back. This could include several emails sent over a few weeks or months, each with a unique message and call-to-action.Check out this email from Bare Minerals, a skincare brand that sent a creative message to re-engage with their inactive customers.

Some effective subject lines you can use are “We miss you,” “It’s been a while,” “Come back and save,” or “We want you back.”You can also offer incentives, a discount, or a free trial to entice them to return to your brand.6. Requesting customer feedbackYou need to develop the habit of asking for customer feedback. Regularly asking for and acting on it shows customers that you value their opinions and are willing to make improvements, which can increase loyalty.However, remember that feedback will not always be positive, but it’s always helpful. Businesses that collect customer feedback are more likely to create positive experiences and address issues. And analyzing feedback can help you understand how customers feel about your product. And that goes way beyond just knowing if they like or dislike something; it gives you a clearer picture of their thoughts and emotions about your brand.7. Create a customer onboarding strategyThe process of customer onboarding is very similar to welcoming a guest into your home. It's your chance to make a remarkable first impression, setting the stage for a long-lasting relationship. An effective customer onboarding process bridges the customer's expectations and your product's delivery. The process should guide your customers through their initial interactions with your brand, ensuring they understand the value of your solution.Having an effective customer onboarding strategy is important because:

• It reduces churn
• Makes customers feel valued from the start
• Solidifies your customer’s beliefs that you’re the right brand to solve their problems
• Helps you gather insights on customer behavior and get input for potential improvements

With these compelling reasons in mind, it's evident that customer onboarding is a critical component in your business's user retention and growth strategy.Your onboarding strategy could involve a profile completion process with rewards for each step. This incentivizes customers to provide more information, enabling you to customize their shopping experience and recommend products that align with their preferences.Here are four steps to make onboarding of your customer easy

1. Creating an account (in this simplify the onboarding process for your customer)
2. Adding payment information (so they can check out faster)
3. Send them a confirmation email with the welcome offer
4. Stay in communication

Or simply allow them to opt into your welcome flow through the pop-up on your website. And send them a coupon code to use on their first purchase.Measuring the success of your customer retention marketing strategiesIt is often said that 80% of your company’s future revenue will come from just 20% of your existing customers.So, tracking your customer retention strategies helps you understand how well your business attracts repeat purchasers to continue shopping with your brand. The key metrics to track are:

• Customer churn rate (CCR): It is how many customers you have lost over a period of time. 
• Repeat purchase rate: This is a key metric because it shows how much your customers value your products and how well your marketing efforts drive action and inspire customer loyalty.
• Customer lifetime value: This metric represents the total net profit your business can expect from one customer over their entire relationship with the business. 
• Customer engaged rate: This helps you measure the total number of customers against those who purchased from your store. 
• Average order value (AOV): This metric helps you measure each customer's financial worth to your business—the more they spend in each transaction, the less you need to spend on customer acquisition.

Best tools to enhance customer retention There are many ways to keep your customers coming back. Customer retention involves several strategies, from email and text message marketing to loyalty programs. Plus, there are plenty of tools available to help you with this.Let’s break down the options by category:Launch a loyalty programLoyalty programs are a cost-effective way to keep customers coming back for more. It rewards your loyal customers for every interaction they have with your brand. This means that the more they shop or engage with your brand, the more points, discounts, or exclusive perks they earn.However, these programs are a two-way street – along with rewarding customers, they also benefit your business in several ways. How? They can increase repeat purchases, boost the lifetime value of a customer, and even provide valuable customer data.Read here how Rivo helped Rareform launch a loyalty program, which increased its 30-day repurchase rate by 26.9%! Use email marketing  Emails give you direct access to your customers' inboxes and help grow your email list without a huge investment. However, with this strategy, you might lose customers if you spam them.When looking for an email marketing tool to boost customer retention for your Shopify store, Klaviyo is a top choice among ecommerce businesses.

Plus, by integrating Klaviyo with Rivo, you can seamlessly incorporate customer loyalty data into your email campaigns. Follow this step-by-step guide to connect Klaviyo with Rivo easily.Here’s an example of a good email marketing campaign from Coffee Lab, an award-winning specialty coffee roaster.

Rather than a mundane receipt, customers are greeted with a thank-you note and also guided on what to do if they have any feedback or questions.Use SMS marketing The effectiveness of email marketing is high; however, there is a possibility of landing in the spam. So, if you could communicate directly with your customers via text, that would be a great idea. Isn't it? SMS is another great tool to help you increase your repeat purchase rate. However, it is more effective during peak shopping seasons when email inboxes are overflowing, paid advertising costs soar, and consumer attention is limited.You can easily integrate Rivo with Postscript, an SMS marketing platform.

The best part? Rivo's integration with Postscript lets Rivo Loyalty share loyalty data seamlessly so you can use it directly in your Postscript campaigns.Prioritize customer retention with RivoEach strategy we've discussed has its merits, and the real power lies in effectively combining them. However, at the heart of successful retention efforts is a strong loyalty program, which makes your existing shoppers feel special and also reminds them to shop on time. You can ensure they continue to choose your brand by offering the right incentives.In less than six months, brands like Ultra Football made over $800,000 from their loyalty program. Rivo helps you create a loyalty program that aligns with your brand, offering customized rewards and tiers tailored to your preferences and exceptional customer support.Integrate Rivo into your Shopify store to create a loyalty program that boosts sales! Get a demo.