{"id":7041,"date":"2017-02-28T12:24:21","date_gmt":"2017-02-28T12:24:21","guid":{"rendered":"https:\/\/blog.mageworx.com\/?p=7041"},"modified":"2023-06-16T21:17:17","modified_gmt":"2023-06-16T21:17:17","slug":"improving-customer-retention-rate-in-todays-ecommerce","status":"publish","type":"post","link":"https:\/\/www.mageworx.com\/blog\/improving-customer-retention-rate-in-ecommerce","title":{"rendered":"Improving Customer Retention Rate in Today\u2019s eCommerce"},"content":{"rendered":"\n<!-- SEO Ultimate (http:\/\/www.seodesignsolutions.com\/wordpress-seo\/) - Code Inserter module -->\n<!-- Google Tag Manager (noscript) -->\r\n<noscript><iframe src=\"https:\/\/www.googletagmanager.com\/ns.html?id=GTM-5DTCW7B8\"\r\nheight=\"0\" width=\"0\" style=\"display:none;visibility:hidden\"><\/iframe><\/noscript>\r\n<!-- End Google Tag Manager (noscript) -->\n<!-- \/SEO Ultimate -->\n\n<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 5<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span><p><a href=\"https:\/\/www.invespcro.com\/blog\/customer-acquisition-retention\/\">According to the statistics<\/a>, existing eCommerce customers spend about <em>70%<\/em> more than new ones.\u00a0 Another <a href=\"https:\/\/hbr.org\/2000\/07\/e-loyalty-your-secret-weapon-on-the-web\">research<\/a> by Harvard university noted that increasing customer retention by <em>5%<\/em> can increase a store profit by <em>25%-95%.<\/em><\/p>\n<p>Hence, increasing customer loyalty should be one of the top priorities for online merchants.<\/p>\n<p>If you are running an E-business you may have probably heard of <em>customer retention programs<\/em>, and wonders they may work with sales figures. <!--more--><\/p>\n<h2>What is a Customer Loyalty Program?<\/h2>\n<p>Basically, such a program offers a variety of perks and benefits that motivate shoppers to come back and buy more.<\/p>\n<p>Most of eCommerce loyalty programs<em> operate on a points system<\/em>, where every spent dollar (or a committed action) earns a shopper a certain amount of internal store credits, also known as <a href=\"https:\/\/www.mageworx.com\/magento-2-reward-points.html\">reward points<\/a>.<\/p>\n<p>These points, in turn, get into a customer\u2019s store account and can be redeemed for any future purchases.<\/p>\n<h2>How Does It Work in Today\u2019s eCommerce?<\/h2>\n<p>The fact is: eCommerce landscape has significantly evolved over the last decade \u2014 some things that used to work well are not that effective now.<\/p>\n<p>The changes affected the traditional approach to building loyalty programs.<\/p>\n<p>These days, practically every online store offers shoppers some kind of pay-off for being loyal. Therefore, mere rewarding for making a purchase is not enough to make customers come back and buy again.<\/p>\n<p>In this article, we are going to describe some <em>new and innovative<\/em>, yet<em> little-known<\/em> ways to improve customer retention rate in the current scenario.<\/p>\n<p>Let\u2019s roll.<\/p>\n<h2>1. Develop Emotional Connection with Shoppers<\/h2>\n<p>Emotions are a decisive factor in creating long-lasting relations between any merchant and shopper.<\/p>\n<p><em>Tim Keiningham<\/em>, the author of <a href=\"https:\/\/www.amazon.com\/Why-Loyalty-Matters-Groundbreaking-Rediscovering\/dp\/1935251791\" target=\"_blank\" rel=\"noopener noreferrer\">Why Loyalty Matters<\/a>, thinks that the reason why most brands being unable to generate an effective connection with customers is that they focus on rational loyalty.<\/p>\n<p>Yes, eCommerce systems may not act like humans, but today, there are a lot of 3d party tools that will help you add some qualities that will make these systems more humane.<\/p>\n<p>So if you:<\/p>\n<ul>\n<li>send reward points as a gift for a certain occasion (<em>a customer\u2019s birthday, wedding, etc.<\/em>)<\/li>\n<li>communicate with customers, figure out their individual requirements and send them store credits for their personal needs<\/li>\n<li>reward customers for certain actions on your website (<em>writing a testimonial, donating to the charity you support, liking your Facebook page, etc.<\/em>)<\/li>\n<\/ul>\n<p>that can help you emotionally engage with your shoppers and foster personal connection with that, which vitally important for developing customers\u2019 loyal attitude.<\/p>\n<p>The above mentioned things are not difficult to implement technically.<\/p>\n<p>If your your store is running on <strong>Magento<\/strong>, you can easily all these options with this <a href=\"https:\/\/www.mageworx.com\/magento-2-reward-points.html\">Loyalty Reward Points extension for Magento<\/a>.<\/p>\n<h2><a href=\"https:\/\/www.mageworx.com\/blog\/kpis-to-measure-loyalty-program-effectiveness\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-16808 size-full\" src=\"https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/690_190.jpg\" alt=\"KPIs to measure ecommerce loyalty program\" width=\"690\" height=\"190\" srcset=\"https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/690_190.jpg 690w, https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/690_190-600x165.jpg 600w, https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/690_190-250x69.jpg 250w\" sizes=\"auto, (max-width: 690px) 100vw, 690px\" \/><\/a><\/h2>\n<h2>2. Offer Both Short-Term AND Long-Term Loyalty Perks<\/h2>\n<p>To keep customers interested, you should keep stirring up their interest.<\/p>\n<p>The best way to do that is to develop <strong>a tiered reward system<\/strong>. Thus you can show gratitude for customers\u2019 initial loyalty and incentivize them to stay with your brand by giving bigger long-term benefits.<\/p>\n<p>This is how it works. When shoppers join your loyalty program, they get small rewards. That can be:<\/p>\n<ul>\n<li>welcoming reward points,<\/li>\n<li>a set amount of store credits for creating an account on your website,<\/li>\n<li>personal discounts for the first and subsequent orders.<\/li>\n<\/ul>\n<p>As soon as shoppers move up the loyalty ladder, the amount of program benefits grows correspondingly. For example, you can give a permanent bigger discount to those customers who\u2019ve:<\/p>\n<ul>\n<li>ordered with you a certain number of times<\/li>\n<li>reached a certain spend level<\/li>\n<\/ul>\n<p>A tiered reward system works best for eCommerce stores that sell complementary goods (e.g. furniture, cooking appliances, etc.) and big online retailers that offer various categories of products.<\/p>\n<p>See how <em>Marvel<\/em> does that.<\/p>\n<p>In their loyalty program, there are 4 levels <em>Insider, Agent, Elite<\/em> and <em>True Believer<\/em>. Right after you login and create an account on their website, you become am <em>Insider<\/em> with about 5,000 points on your account.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-large wp-image-7048\" src=\"https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-2.44.40-PM.png\" alt=\"Screen Shot 2017-02-27 at 2.44.40 PM\" width=\"1061\" height=\"342\" srcset=\"https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-2.44.40-PM.png 1061w, https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-2.44.40-PM-600x193.png 600w, https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-2.44.40-PM-768x248.png 768w\" sizes=\"auto, (max-width: 1061px) 100vw, 1061px\" \/><\/p>\n<p>Next, if you show your commitment to the community, you progress and get more reward points. These points can be used to purchase certain merchandise on the company\u2019s website.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-7049\" src=\"https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-3.09.24-PM.png\" alt=\"Screen Shot 2017-02-27 at 3.09.24 PM\" width=\"960\" height=\"414\" srcset=\"https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-3.09.24-PM.png 960w, https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-3.09.24-PM-600x259.png 600w, https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-3.09.24-PM-768x331.png 768w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><\/p>\n<h2>3. Provide a (Free) Time-Limited Access to VIP Perks<\/h2>\n<p>Does your eCommerce site offer Premium Quality products or services? Do you provide VIP benefits or offer exclusive deals for specific user groups?<\/p>\n<p>If so, why not let ordinary shoppers access those exclusive perks and enjoy the VIP status for some time?<\/p>\n<p>The research conducted by Technology Advice shows that 56.8% of shoppers are more likely to take part in a loyalty program, if they can access exclusive rewards. However, since most of VIP perks are hard to achieve, people may give up at the start.<\/p>\n<p>Offering a free time-limited access to all the advantages of a Premium Customer will let shoppers feel the real value they can get, which is likely to increase the chances of staying them with your store.<\/p>\n<p>This is how <em>Amazon Prime<\/em> is doing it. The company is offering\u00a0 perks such as, free of charge\u00a0 2-day delivery, free access to the streaming service and even <a href=\"https:\/\/www.mageworx.com\/delivery-date-magento-2.html\">rush delivery<\/a> to certain locations.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-7051\" src=\"https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-3.47.46-PM.png\" alt=\"\" width=\"1023\" height=\"497\" srcset=\"https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-3.47.46-PM.png 1023w, https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-3.47.46-PM-600x291.png 600w, https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-3.47.46-PM-768x373.png 768w\" sizes=\"auto, (max-width: 1023px) 100vw, 1023px\" \/><\/p>\n<p>By doing that, Amazon lets its customers feel more special and valued, which has already resulted in more than <em>7 million Amazon Prime users<\/em> who spend twice as much as non-prime members.<\/p>\n<h2>4. Offer Non-Material Values that Matter to Your Customers<\/h2>\n<p>While everyone is offering their customers discounts and exclusive deals, you can stand out and offer them something really valuable. Something better than material things.<\/p>\n<p>I\u2019m talking about understanding your customers real values and figuring out what brings them the sense of worth. That can be basically done in 2 ways.<\/p>\n<h4><em>Contributing to the community\u00a0 <\/em><\/h4>\n<p>When people have a chance to make a contribution to some community, that gives them a feeling of fulfillment and creates a sense of belonging. To provide them with such an opportunity, you can create a platform, where they can:<\/p>\n<ul>\n<li>share their experience<\/li>\n<li>help each other with a piece of advice<\/li>\n<li>offer services related to your products<\/li>\n<\/ul>\n<p>For example, if you are running a DIY store, you can launch a forum, where your customers will be able to share their expertise in carpentry, furniture repairing, etc.; showcase what they\u2019ve done with the help of your products, and even advertise their services.<\/p>\n<p>Below is a brilliant example by <em>Magento<\/em>. The company managed to create one of the biggest and the most loyal communities in eCommerce by introducing:<\/p>\n<ul>\n<li>new <a href=\"https:\/\/marketplace.magento.com\/partner\/MageWorx%20Team\" target=\"_blank\" rel=\"noopener noreferrer\">Magento Marketplace <\/a><\/li>\n<li>Magento forums<\/li>\n<li>an official DevBlog<\/li>\n<li>Magento <a href=\"https:\/\/stackoverflow.com\/users\/3535278\/mageworx\">StackOverflow department <\/a><\/li>\n<li>bunch of valuable learning resources<\/li>\n<li>and more<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-7052\" src=\"https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-4.22.48-PM.png\" alt=\"Screen Shot 2017-02-27 at 4.22.48 PM\" width=\"994\" height=\"851\" srcset=\"https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-4.22.48-PM.png 994w, https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-4.22.48-PM-600x514.png 600w, https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-4.22.48-PM-768x658.png 768w\" sizes=\"auto, (max-width: 994px) 100vw, 994px\" \/><\/p>\n<h4><em>Cause marketing, supporting charities<\/em><\/h4>\n<p>Incorporating cause marketing into a loyalty program can be a great way to engage with customers, and give them the feeling that they are doing something good.<\/p>\n<p>The <a href=\"https:\/\/www.conecomm.com\/research-blog\/2013-cone-communications-echo-global-csr-study\">research<\/a> conducted by Cone Communications says that about 90% of all customers would choose a brand that is socially responsible and supports a cause of charitable organization. Hence, you can:<\/p>\n<ul>\n<li>launch a campaign in support of some charitable organization<\/li>\n<li>let customers make donations at the checkout<\/li>\n<li>donate a certain amount from every order to a charity or cause you and your customers support<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-7055\" src=\"https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-4.32.41-PM.png\" alt=\"Screen Shot 2017-02-27 at 4.32.41 PM\" width=\"1001\" height=\"562\" srcset=\"https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-4.32.41-PM.png 1001w, https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-4.32.41-PM-600x337.png 600w, https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-4.32.41-PM-768x431.png 768w\" sizes=\"auto, (max-width: 1001px) 100vw, 1001px\" \/><\/p>\n<p><em>Project7<\/em>, for example, donates a certain amount of every sale to various charitable organizations. This way, every customer who has ever made a purchase in this store automatically makes a contribution to support a certain kind of charity.<\/p>\n<h2>5. Add Gamification Elements<\/h2>\n<p>There\u2019s nothing more involving than games.<\/p>\n<p>Make a game out of your loyalty program that will make the buying process sheer fun.<\/p>\n<p>The most challenging aspect in incorporating gamification into your loyalty program is creating the right type of a game. It should resonate with your audience and appeal to various groups of your customers.<\/p>\n<p>You can reward game participants with:<\/p>\n<ul>\n<li>internal store credits<\/li>\n<li>unlocking special discounts<\/li>\n<li>unlocking VIP benefits<\/li>\n<\/ul>\n<p>Also, people are fond of a healthy competition. Let your store visitors compete against one another, involve them into the game by featuring a leaderboard with scores that updated regularly.<\/p>\n<p>Also, one of the key components of gamification is recognition, so make sure you promote it via all possible marketing channels (<em>your newsletter, PPC, partners\u2019 websites, etc.<\/em>).<\/p>\n<p>This is an example of loyalty program gamification by <em>Simply Party Supplies<\/em>.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-7056\" src=\"https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-5.10.36-PM.png\" alt=\"Screen Shot 2017-02-27 at 5.10.36 PM\" width=\"1171\" height=\"748\" srcset=\"https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-5.10.36-PM.png 1171w, https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-5.10.36-PM-600x383.png 600w, https:\/\/www.mageworx.com\/blog\/wp-content\/uploads\/2017\/02\/Screen-Shot-2017-02-27-at-5.10.36-PM-768x491.png 768w\" sizes=\"auto, (max-width: 1171px) 100vw, 1171px\" \/><\/p>\n<p>They have combined their love for gaming with their customers\u2019 love for shopping. On every product page customers can earn points by performing certain actions.<\/p>\n<p>There are 35+ badges to win for completing certain tasks, and the big reward\u00a0 \u2014 a 40% on any store item. So this program is definitely worth joining.<\/p>\n<h2>Bottom Line<\/h2>\n<p>As you can see, even despite the abundance of similar loyalty programs, you can make yours stand out.<\/p>\n<p>While it is tempting to think that big discounts are what make an effective eCommerce loyalty program, the real key to success is making your program unique, engaging and fun.<\/p>\n<p>Do you have a loyalty program for your store customers? Do you know any ways to make it special? Feel free to share your thoughts in the comments section below.<\/p>\n","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 5<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span>According to the statistics, existing eCommerce customers spend about 70% more than new ones.\u00a0 Another research by Harvard university noted that increasing customer retention by 5% can increase a store profit by 25%-95%. Hence, increasing customer loyalty should be one of the top priorities for online merchants. If you are running an E-business you may [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":14723,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[428,291],"tags":[197],"class_list":{"0":"post-7041","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ecommerce","8":"category-e-marketing","9":"tag-customer-loyalty"},"_links":{"self":[{"href":"https:\/\/www.mageworx.com\/blog\/wp-json\/wp\/v2\/posts\/7041","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mageworx.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mageworx.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mageworx.com\/blog\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mageworx.com\/blog\/wp-json\/wp\/v2\/comments?post=7041"}],"version-history":[{"count":16,"href":"https:\/\/www.mageworx.com\/blog\/wp-json\/wp\/v2\/posts\/7041\/revisions"}],"predecessor-version":[{"id":16809,"href":"https:\/\/www.mageworx.com\/blog\/wp-json\/wp\/v2\/posts\/7041\/revisions\/16809"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mageworx.com\/blog\/wp-json\/wp\/v2\/media\/14723"}],"wp:attachment":[{"href":"https:\/\/www.mageworx.com\/blog\/wp-json\/wp\/v2\/media?parent=7041"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mageworx.com\/blog\/wp-json\/wp\/v2\/categories?post=7041"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mageworx.com\/blog\/wp-json\/wp\/v2\/tags?post=7041"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}