Your Shopify store’s retention rate is key to long-term survival. As one Shopify blog post points out, a small change in customer retention can significantly boost a store’s revenue. The example shows two stores that have 100 customers purchasing a $10 item every month.
The store that managed to retain 10% of its customers over a 60 month period made more in revenue than the shop that kept 5% of its customers. Which is why customer retention is so important—it’s one of the best money makers over time for your Shopify store.
This might also have something to do with the fact that loyal customers have a higher conversion rate and spend more per transaction than new customers. Not to mention, the more you focus on customer retention, the less effort you will need to put into constantly acquiring new customers.
So, what can you do to keep customers around? Here are three strategies you can use to improve customer retention.
Strategy #1: Focus on making your customers happy
The happier your customers are, the more likely they are to stick around. However, this is more challenging for Shopify stores as you don’t have the opportunity to connect with your customers 1-on-1 like a traditional brick and mortar store.
What you can do is make an extra to go the extra mile for your customers so their buying experience—and your brand—stands out.
Making your customers happy could be anything from adding a free product sample into their order to checking in with them after their purchase to make sure everything is okay. The best way to make them happy is to delight them by doing something unexpected or going above and beyond their previous experiences with buying from an e-commerce store.
Zappos is the perfect example of an e-commerce store that goes the extra mile to put a smile on their customers’ faces. The customer service team keeps a chalkboard in their office to keep track of flowers, postcards, cookies, and other goodies they’ve sent to customers to say thanks for their purchases.
Not only does this set Zappos apart from their competitors in the e-commerce clothing and shoe industry, but it also shows their customers they genuinely care about them. They’re not just a company selling clothes and shoes from a warehouse—they’re a real company who sends their customers thank you letters with smiley faces! 😃
Strategy #2: Build a community vibe around your brand
There’s a reason why some of the most famous brands in history are still around today.
Customers from Nike to Apple have something in common—their products have also created a larger community. People want to feel part of something. And when they see somebody else with a product they also own, they feel connected.
Riff Raff & Co knew this when they started their sleep toy for babies and infants ecommerce store.
Founder Emma Kruger knew that parents were part of a close-knit community that were vocal about products they loved while attending similar activities like postnatal yoga and cooking classes. She knew for Riff Raff & Co to be successful, they needed to find a way to become a part of it.
“With much of our target market being mums, and me being a mum myself, I knew that the best people to promote our product were other mums—they are the ones they really trust,” she says.
So, the brand began to use a referral program to encourage their customers to talk about their product with other mums. It worked—35% of their sales now come from mums referring their sleep toys to others.
You can use this sense of community to create around your own Shopify store.
Get involved in forums and use social media sites like LinkedIn, Facebook and Twitter to create a space for your customers to talk about your store. Whether it’s sharing information about your store’s mission, values or objectives, a community space can help your brand become three-dimensional and make your store become more human.
For example, after your customers make a purchase, you should invite them to share their thoughts and passion in your community space with other like-minded enthusiasts. Not only can this create an army of loyal customers, but it can also boost discussion about what they like—and don’t like—about your store.
If you are running a Shopify store that sells clothing, your community may be focused on sustainable and ethical resources. If you are selling food, you may promote that your store focuses on organic ingredients.
Strategy #3: Reward your loyal customers
Finally, reward your customers for sticking around.
One of the best ways to retain your customers is to give them a reason to keep purchasing from you. With a loyalty and rewards program, you can give customers a chance to get a discount or special offer by telling their friends and family about your store. Not only will your existing customers be delighted about their reward, but you can gain some new customers in the process, too.
Meat N’ Bone use this exact strategy through their online butcher store. Using their referral program, the company has managed a 65% customer retention rate over 30 days—a remarkable figure for a business selling fresh food.
Owner Gabriel Llaurado says when his company first launched the referral program, they found it boosted their engagement with customers. This was because it gave their customers a way to showcase that they were proud about buying from Meat N’ Bone.
Llaurado says after implementing their referral program using ReferralCandy, 70% of the people buying from them now interact with it, whether it’s pasting the link in chat, posting on social media, or clicking the link.
“It really helped us get the word out.”
Building a referral program of your own for your Shopify store can dramatically boost your retention rate. After all, what’s better than giving your customers a way to get a discount while giving their friend a bonus, too?
Now, it’s your turn
Improving customer retention for your Shopify store doesn’t have to be rocket science.
On the flip side, some of the best ways to keep your customers around are really simple. Instead of tracking complex metrics and spending money on costly advertising strategies, go back to the basics of selling.
Keep your customers happy by offering them a free sample or sending a thank you note. Build a community around your brand, so people feel like they’re part of something. And lastly, reward your customers for sticking by you and being a loyal customer.
Not only will improving customer retention take the stress out of finding new customers, but it’ll make a big difference in the most crucial part of your business—your bottom line.
Kimberlee Meier is a writer for ReferralCandy, a Shopify app that helps brands unleash the power of word of mouth by running a customer referral program.
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