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A Loyalty Program Becomes a Retention Hub


It is seven times more expensive to acquire a new customer than it is to retain an existing one, and it is only getting more expensive. As more and more ecommerce stores enter the market, the demand for PPC goes up. Simple economics tell us that these prices are on an upward trend.

Today’s top ecommerce sites are using retention to battle increasing digital marketing costs and stagnating growth. There are a number of retention tools at your disposal, but it can become tough to manage those tools. The solution is to use a loyalty program as a hub for your retention marketing tactics. 

Loyalty as a Retention Hub 

Here are a few examples of how a loyalty program can make your retention marketing efforts much easier by centralizing everything in one place. 

Incentivize Other Efforts with Points

Shoppers often take a “what’s in it for me?” approach when deciding whether they will complete an action on your site. It is incredibly valuable to get a customer to share your store over social media, but very few ever do. You can reward this behavior by providing points for the completion of marketing activities that are both retention and acquisition focused, whether that’s sharing your store on social media or referring a friend directly. 


As soon as a customer realizes that your points have real monetary value, they’re motivated to earn them for easy requests like sharing on social media or referring their friends, or sharing user-generated content. A loyalty program ties all of your marketing efforts back into your retention marketing strategy. More retention gets you more repeat customers, and repeat customers are valuable online!

Avoid Discounting 

One of the pitfalls of ecommerce is discounting your store to death, and reducing your average order value, customer lifetime value, and bottom line. Many online retailers will try to get more referrals, sales, or shares by offering a straight discount. These discounts set an expectation that a customer will never have to actually pay full price.

“If you are always offering discounts, your shoppers will never consider paying full price.”

You might see discounts as a necessary evil to get the ball rolling, but it can actually do some serious damage to your brand image and sales. This is especially true if you consider yourself a luxury retailer. 

Using a loyalty program allows you to reward points to incent action rather than offering straight discounts. Points do not have the same associations as $15 off or 20% off. And, they encourage users to continue to purchase full-price items from you. This allows you to kick start marketing effortsand avoid the negative effects of discounting.

Consistent Communication

The more tools you’re using, the higher likelihood that your communications have a fragmented look and feel. A tool for retention emails might send emails that look one way, and a referral program sends emails that look totally different. Using a loyalty program as a hub can help solve this fragmentation issue. After all, your customers only think they’re working with you — a single store. 

When all your retention efforts are being conducted with the same tool, you get a customer experience that is on brand, engaging, and effective at driving repeat purchases.

Centralized Data

There are not enough hours in the day for an online store owner or ecommerce manager. The last thing you want to be doing is checking multiple retention tools to see how effective your efforts have been.

A loyalty program can bring all these tools into one convenient location. Instead of looking at revenue from loyalty members, number of purchases from referrals, and repeat customer rate in three separate places, you can look in one spot.


And, using a central hub for retention marketing efforts makes it easier to see if your retention efforts are making you some serious money, or if they need to be tweaked.


Centralize Retention with a Loyalty Program

Retention marketing is a long term strategy, so to truly invest you need to set yourself up for success. Invest in the right tools, treat the strategy with the respect it deserves, and start things off right.

If you are planning to take your retention marketing efforts seriously, you should consider adding in a loyalty program. They lead to some amazing results, and create a central hub for your retention efforts. 

Amplify your retention and acquisition strategies with the power of user-generated content.

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The 5 Best Retention Marketing Tactics for Your Online Store


Retention marketing is focused on creating value from customers you already have, rather than solely focusing on acquiring new customers. Retention marketing is most powerful when you customize your strategy based on your own store’s lifecycle. While not every tool will work for every business, here are the top retention tools available, and when you should use them. 

How to Select Retention Tactics

There is no single retention tactic that is the best for every store. The ideal strategy will depend on the stage your business is in. The later in your journey you are, the more you should be investing in retention marketing.

Retention marketing tactics are complementary; you will see the most success when you use a few of them in tandem to develop your own strategy. For example, a loyalty program becomes extremely effective when you pair it with retention emails reminding existing customers of point balances and opportunities to get rewarded. It all fits into a bigger customer retention strategy

5 Retention Marketing Tactics That Work

These aren’t the only retention marketing tactics out there, but these are the tactics that we’ve seen customers have the most success with, as part of their retention strategy.

1) Amazing Customer Service/Experience

Let’s start basic. Your customer service and customer experience are one of the most signficant contributors to customer retention. If a customer didn’t enjoy shopping with you, they will not be back. Or, if they had a post-purchase concern that was not addressed, they won’t want to shop with you again.

If you’re looking into more advanced customer retention tactics, the most important one is to ensure your service and experience are top notch. Looking for inspiration? Check out these tips to improve your customer service.

2) Support Systems

Support systems allow you to provide that top notch service your customers are craving. It also allows you to turn customers with problems into loyal, lifetime customers. Many questions occur after a purchase. By answering them appropriately, you can nurture these customers into a profitable, lifetime customer.

Tools like help desks and live chat systems allow you to add a human touch to the support of your online business. A human touch is exactly what customers need to come back again and again. 

Live chat software is one of the easiest ways to give your store a human feel. Customers like to deal with other people not automation, since it makes them feel valued. Depending on the level of support you need to provide, you can start small with limited live chat and move up into larger help desk software when you’re working across a larger team. 

3) Retention Emails

Many of you are likely already using email marketing to sell your products, but likely not doing it with a retention marketing mentality. Instead of using email to showcase your latest products and sales, strategically use it to encourage past customers to come back and shop again. 

For example, if you know your average time between purchases, you can segment your customers based on last purchase date. If customers have gone longer than the average time without purchasing, you can give them an extra nudge to come back and shop again.

The best part of this tactic is you can use your current email service provider to send these retention emails, you just need to target segments of your audience. 

4) Personalization

Every merchant should be using personlization in their marketing efforts. No one likes to be put through a generic process, or talked to like they are just an order number, especially if they have bought from you already! 

From adding a customer’s name to all communication, to personalized product recommendations and cross-sells like those you see on Amazon, there’s a ton of ground to cover with personalization. Regardless of the level of personalization you decide to implement, it is crucial to create a customer experience that fosters customer loyalty. After all, a happy engaged shopper is one that has a higher purchase frequency.

5) Loyalty and Reward Programs

A loyalty and rewards program is one of the most effective customer retention tactics at your disposal. It allows you to reward points to shoppers to encourage them to come back. This creates a switching barrier they will need to ignore if they want to choose a competitor in the future. 


A rewards program allows you to not only encourage repeat customers, but other profitable actions as well. You can reward points for actions like social shares, social follows, registrations, and referrals. A loyalty program essentially becomes a hub for all your customer retention activities. 


Loyalty programs have been popular in retail for a few decades now, for good reason, and they are even more effective when implemented online. Building an online loyalty program is faster than building it in-store, and there are some great tools out there to help you out.

Retention Tools Are Important

Just like you need to invest in acquisition channels, you need to invest in retention tactics for your retention marketing strategy. As you develop your retention strategy and incorporate these tactics, you’ll begin to see the returns on your investment with happier, more loyal, customers. 

Drive more revenue by acquiring and retaining more high value ecommerce customers with this on demand webinar series.

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How To Start Your Ecommerce Retention Strategy


We’ve already covered what retention marketing is, and why today’s elite ecommerce stores have already started on a retention-focused strategy. But where should you begin with your own retention strategy? Read on to learn what to do before you get started, how to allocate your marketing budget, and when you can expect to see results. Let’s get started!

Where Do You Start?

Every tall building started with a solid framework, and every tall tree started with the roots. Retention marketing is the same. You can create something amazing, but you need to lay down a strong framework.

“If you don’t know where you are now, you will never know how far you have gone.”

The framework you need is an understanding of your current metrics. Measuring your current ecommerce stats will show you where you are, so you can measure the effectiveness of your retention marketing strategy. 

You should have a benchmark of all the standard ecommerce metrics like conversion rate, average order value, abandoned cart rate, etc… But besides those metrics, you should also benchmark KRMs (key retention metrics) before starting your retention marketing plan. For consistency, you should use data from a one year period for the following calculations.

Repeat Customer Rate (RCR)

Your store’s repeat customer rate is the percentage of your customer base that is coming back to purchase again. Remember, it is more expensive to acquire a new customer (seven times more expensive!) than retain an existing one.

To measure your current RCR, take the number of repeat customers and divide it by the total number of unique customers. Be sure you are dividing by unique customers and NOT orders.

Customers With More Than One Purchase / Unique Customers = Repeat Customer Rate

As you focus more on retention marketing, you will notice that your revenue from repeat customers will start to climb.

Purchase Frequency

When you make getting return business a focus, your customers will start to shop with you more often. This metric is known as your store’s purchase frequency. It is the average number of times a customer will shop with you in a given time period.

Total Orders / Unique Customers = Purchase Frequency

Total number of orders divided by the number of unique customers you have, will give you purchase frequency. Even a slight increase in purchase frequency can lead to a huge increase in revenue.

Customer Lifetime Value (CLV)

This is the holy grail metric of customer retention. It tells you what each customer is worth to your store over their entire shopping life. 

Average Order Value x Purchase Frequency x Average Lifespan = Lifetime Value

The above equation is your average order value multiplied by your purchase frequency (see above) multiplied by your average customer lifespan. If you don’t know your average lifespan, you can use three years as a rough estimate.

Set Benchmarks

Now that you have calculated these KRM benchmarks, make sure you note them somewhere. If you use an analytics or CRM tool, you can store it there. Whatever you decide to do you will want to look back on these numbers to see how your strategy is performing.

How Much Retention Marketing Do You Need?

Now that we have laid a solid framework to build our retention strategy on, we need to decide how much of a focus to put on retention. You would not expect acquisition to just happen, so you should not expect retention to just happen.

You invest marketing dollars into a content strategy, email marketing, social media, search engine optimization, and retargeting (to name a few places) for your acquisition strategy. If you want your retention marketing efforts to be a success you need to do the same.

Let’s look at the breakdown of a typical ecommerce store’s traffic:


As you can see 92% have not purchased before, or have made a single purchase. This traffic would be attributed to acquisition efforts. The remaining 8% are customers who have purchased from you 2 or more times. This traffic can be attributed to your retention efforts.

When you look at the traffic numbers you may ask why you should allocate more than 8% of your marketing budget to retention, when it only represents a small portion of your traffic. On the surface it may seem counterintuitive, but you need to dig deeper.

Let’s look at the average revenue breakdown from each of those segments:


That small percentage of your traffic is actually generating a substantial portion of your revenue. The average ecommerce store sees over 40% of their revenue come from that small but mighty 8%. This is because a repeat customer is more profitable than a first time buyer.

If this is the case, why do the majority of stores allocate almost all their budget to customer acquisition? The average store allocates 81% of marketing dollars to acquisition, which represents 59% of revenue, and 19% of marketing dollars to retention, which represents 41% of revenue. This budget allocation doesn’t seem to make sense! 

What Should Your Store Do?

Every store is different, but some stores will benefit more from retention marketing than others. The effectiveness of retention marketing is determined by two main factors. The first is the life-stage of your store, and the second is the nature of the products you sell.

Your Store’s Life-Stage

If you have a brand new ecommerce site, you will have very small customer base. Obviously it does not make much sense to be spending marketing on retaining customer you don’t have yet! As you grow, you’ll want to shift more marketing dollars to to retention marketing.


Once your store has an established customer base, it becomes more beneficial to focus on retention over acquisition. Growing revenue via acquisition can eventually slow, but retention can help you continue to grow.

What You Sell

A returning customer is worth more to your business, so every store should be striving to boost retention. If you have a product that has high likelihood of repeat purchases, you will benefit immensely from retention marketing. Examples of these types of products would be cosmetics, coffee, supplements, and even clothing.


If you do sell high ticket items, retention strategies can still work for you. Imagine if you could sell three fridges to a customer over their lifetime rather than just one. That would be a huge boost! Alternatively, you can cross-sell complementary products to your customers. 

When Can You Expect to See Results?

Retention marketing doesn’t provide overnight results or instant gratification. But, if you stick to it you will start to see some phenomenal results. How long do you need to wait? That depends. Six months to a year is a common timeframe. Retention marketing is like rolling a snowball, once your get it started it becomes easy. 

Drive more revenue by acquiring and retaining more high value ecommerce customers with this on demand webinar series.

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Take Your Online Store from Average to Elite with Retention Marketing


Gone are the days when you could simply set up an online store, run a few ads, and start watching the money roll in. Today’s ecommerce landscape is a battlefield and the majority of stores are slugging it out to be average. However, there are stores that have figured out how to rise from mediocrity and into the ecommerce elite. These stores know how to use retention marketing!

Today’s Average Store

Stores are different across industries, markets, and countries, so we’re going to work with averages from different studies to help create our baseline.

Average Ecommerce Store’s Order Value: $78.00

Recently, there has been a huge focus on growing an ecommerce store’s revenue. While this looks good on paper, you need to dig deeper than just revenue numbers. You need to look at the profit you are keeping from each sale. You may be saying “This is pretty obvious!” yet big companies fall into this trap of chasing revenue without regards to profit all the time.

Average Ecommerce Store’s Profit Margin: 35%

According to a study from MarketingSherpa, the average American ecommerce site has an average profit margin of 35%. In this benchmark situation, that means that the average store is profiting $27.30 per order. Not bad.

Average Profit Per Order: $27.30

However, there is one pesky cost that will always eat away at your profits. That is your customer acquisition cost. It is not cheap to attract someone to your online store (which you surely know!). One study has the median acquisition cost at $12.00. This seems a little low, but let’s use it for argument’s sake.

Average Cost to Acquire a Customer: $12.00

This is the thorn in the side of every ecommerce merchant, trying to keep profit margins up and acquisition costs down. And, the cost to acquire a customer is also on the rise. As acquisition costs rise, traditional thinking in ecommerce starts to become less sustainable.

Profit to the Merchant: $15.30

In the current landscape (our baseline) this ecommerce store would make $15.30 on every order. This number is after accounting for the price paid for acquisition. Again, this is a hypothetical situation, but this merchant has made $15.30 on a $78.00 order. That is 20% of the sale price, and you haven’t even shipped it yet!

Depending on your shipping costs, this scenario can get you caught in a rat race.

Growing Your Store

The above scenario is a bit like treading water. You’re likely doing OK and making a couple of dollars per order, but if your costs vary significantly, you could be losing money. Even so, no one wants to spend 90 cents to make a dollar.

Many stores make the mistake of continuing like this while they grow a following and customer base. The problem: many stores continue in this mindset forever and never truly scale. If you want to achieve real growth, you need your investment in acquisition to go further. If you want to be elite you need retention marketing.

Becoming Elite Through Retention

Attracting each new customer to your store is increasingly not easy, nor cheap. You want to get the most out of each acquisition investment you make. Retention marketing is a way to get more value out of each acquisition. It is how to make it in the ecommerce world.

In the average store scenario above our merchant is making $15.30 before shipping. Let’s say it is closer to $5.00 when it finally makes it to the customer’s door. This may seem lackluster at best. Where this becomes a viable strategy, is when you treat each new customer/order as the beginning of a longer relationship. This relationship is known as customer lifetime value.

Repeat Customers Spend 3X More Per Order

Customers that return for a repeat purchase are way more valuable to your store. A study by Adobe found that repeat purchases spend three times more than first time buyers. WOW! Let’s use our original example and turn that purchase into a repeat one. A $78.00 purchase would become a $234.00 one. This already is looking good, but it gets better.

Average Order Value From a Repeat Customer: $234.00

Remember that $12.00 acquisition cost? Well, you won’t need to pay that again for this purchase. With the right retention tools (email, support, loyalty programs, etc.) you will have a retention cost, rather than an acquisition one. The good news is that retaining a customer costs seven times less than acquiring one. That means our $12.00 is now $1.70.

Cost to Retain an Existing Customer: $1.70

With this increase in order value, and decrease in retention cost, you now have a much more profitable order. This second purchase creates $80.20 in profit.

Profit to Merchant: $80.20

If you want to seriously grow your store, you need to focus on getting customers to come back. Going after new customers is important, but you need to follow that up with an effort to retain them. If you are always hunting for new customers you will not be able to grow sustainably. It is that simple.

Retained Customers Get Even Better

If the above was not good enough, it get better. Here are a few other facts about repeat purchasers that you should know.

They Share Your Store More

Your repeat customers can easily become some of your best marketers. The more a customer shops at your store, the more people they refer to you. Basically the more invested in your store/brand they become, the more they want to tell their friends.

Bain & Company conducted a study that found as number of purchases increase, so does the amount of people referred. The story here is that looking after your existing customers can actually net you some new ones. A referral is also the most trusted form of advertising according to Nielsen.

They Spend More at Key Times

Repeat customer spend more in general, but they also spend more during the busiest times of the year. A study by Adobe found that repeat customers spend more during the holidays than first time purchasers.

While all shoppers spend more during the holidays (17% more), a store’s repeat customer base spends even more. If a shopper has made a purchase before the holiday season and comes back during it, they spend 25% more than normal.

The takeaway here is that you need to get your retention strategy together sooner rather than later, and well before the holidays approach. 

Drive more revenue by acquiring and retaining more high value ecommerce customers with this on demand webinar series.

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What is Retention Marketing, and Why You Need to Start Today


Retention marketing, the mysterious form of marketing that seems to be popping into your favorite ecommerce blogs, podcasts, and even into conversations with your other merchant friends. The whisperings have started, but do you really know what retention marketing is?

What is Retention Marketing?

Retention marketing is a new form of marketing that is becoming more and more prevalent in the ecommerce world. The focus of this school of marketing is to create engaged customers that return to your store to shop again. It is a shift in focusing only on the acquisition of countless new customers, to also focusing on the profitability of those you already have!

In short, retention marketing is:

The activities a store uses to increase the likelihood of a customer purchasing again, while focusing on increasing the profitability of each repeat purchase.

Will retention marketing ever become the only way you market your store? No! You will still need to use traditional digital marketing to first acquire customers, but you can increase your ROI from those channels by getting them to shop with you more often.

Retention marketing drives an increase in purchase frequency (how often a typical customer buys) and repeat purchase rate (likelihood a shopper returns). A boost to these two metrics means that you are increasing the customer lifetime value (CLV) which leads to long term profitability, rather than short term acquisition gains.

Retention Marketing vs. Acquisition Marketing

Retention marketing is never going to completely replace acquisition marketing that is focused on bringing new customers to your store. The two methodologies need to be used in tandem. Think of ecommerce marketing as a sport. Some teams are good at offense, and some are good at defense. But will a team ever win only playing one or the other?

Retention is your store’s defense and acquisition is your offense, play both to truly dominate the game!

Retention is your store’s defense and acquisition is your offense, play both well to truly dominate the game. The amount of each your store uses will vary based on what you sell, the margins you have, the industry you are in, but most importantly the life stage of your store.

The life stage of your store is the biggest influencer of what your retention/acquisition mix should be. Did you start yesterday? Retention will do nothing for you if you have no customers, so put 100% of your effort and budget into acquisition. However, as you gain a more established customer base and increase your sales, you can start to add more and more retention marketing.

Marketing Budget Allocation


As your store grows you can (and will want to) add more retention marketing into your mix. At a certain size it becomes much more difficult to grow by “adding more” than it does to grow by “getting more.” A study by Harvard found that a 5% increase in online retention can boost profits by 95 percent!

Why Start Retention Marketing?

Some of you may be asking yourselves, “If this is so profitable, why am I just hearing about this now?” Great question! We, as humans, tend to only discover things when we are presented with a need.

In the past SEM and social media were cheap and effective ways to drive traffic to our ecommerce sites. You could afford to sell to someone once and never speak to them again. Unfortunately this isn’t the case anymore. These traditional ads are more expensive and less effective than they were in the past.


Adwords CPC’s are on the rise and I don’t see that trend changing! Search Engine Land shows non-brand keywords have risen 75% while branded keywords are up 300% from two years ago. That is tough to swallow if you are already operating with small margins. 

Social media is seeing a similar trend to Adwords. According to a study by AdAge, your organic social reach is on the decline as well. While Facebook says you can expect to reach around 16% of your audience with a post, AdAge says it is more like 6%. To get real exposure on social media you can pay for social ads or promoted posts. That will cost you though.


The trend you should spot is that it is becoming tougher than ever to acquire a customer. You need retention marketing to make each customer you do acquire more valuable. With retention marketing you are essentially increasing the ROI of every paid acquisition you achieve. There is also the added benefit that a return shopper is 9x more likely to convert on a purchase than a first time shopper.

Effectiveness of Retention Marketing

The effectiveness of a retention marketing strategy will vary depending on what you sell. Dish washers are not going to be purchased as frequently as coffee, for example. So you will not see the same results in different situations. That being said, at Sweet Tooth our clients have seen an average increase of 40% in lifetime value and a 20% increase in repeat purchase rate after adopting retention marketing tactics like loyalty programs.

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7 Ecommerce Segmentation Hacks for Profitable Customer Loyalty


We all have a favorite store or restaurant; the one that every time we walk in the staff knows our name, our order, and that we like our martinis shaken, not stirred. This personal connection is what keeps us coming back. But how do you achieve that same personal feel in ecommerce?

While you won’t have those same face-to-face interactions in the online world, you know more about your customers than you think! With the right ecommerce and marketing platforms you have access to advanced customer segmentation that most merchants do not take advantage of.

Segmentation allows you to offer the right perks and incentives to the right customers, so they feel the same way online as you do at your favorite brick and mortar store.

Here are 7 segmentation hacks to boost customer loyalty on your site.

1) Offer Improved Support for High Revenue Customers

I’m sure many of you have heard the old business adage, “20% of your customers generate 80% of your revenue.” In ecommerce, this is true. You will undoubtedly have your “Power Customers.” Treating these customers the same as every other customer is a huge missed opportunity. 

You want these profitable customers to feel valued. Offer them perks and advantages like: an extended return policy, priority support, or even a free gift here and there. 

How to Segment:

Sort your customers by total spend (or revenue) and select a percentage that you are willing to offer these perks to. 

2) Upgrade Shipping for High Frequency Buyers

Shipping is a major part of a customer’s decision-making process. According to Lean Analytics, so much so that 44% of customers will abandon their shopping cart if they view the shipping as unfavorable. Shipping costs are even more important to customers who are placing orders frequently.

Customers who order frequently will see more value in getting expedited shipping or cheaper rates than they will from a straight discount. Use customer segmentation to find your high purchase frequency customers and offer shipping related incentives in exchange for their loyalty.

How to Segment:

Set a criteria for what makes a customer a frequent purchaser (x orders per month/year). You can then sort your customers by orders and see which customers would be included in this segment. 

3) Identify Product Experts for Reviews 

Product reviews are one the best ways to increase your sites conversion rates. They establish credibility, can increase SEO, and much more. But a review is best when it comes from someone who knows about the product and product category.

You can segment your customers to discover who is frequently purchasing items in a particular product category. You can then offer that customer an incentive in exchange for their product expertise (review, video review, blog post). The incentive given will depend on your customer base, but it could be loyalty points, a coupon, or free a product.

Segmenting your customers to find these product experts converts better than blanket emails that ask everyone to leave a review, and you are sure that they are coming from a credible source. These customers are likely also brand ambassadors that will have no problem sharing the review they just wrote.

You can also reach out to these product experts when you are introducing a new product. Send them a sample of the product and ask them what they think. This will ensure that your new product is useful for your target audience and it will give you reviews you can post when you launch it.

How to Segment:

Do some data mining on your order data and determine which customers have purchased the most from each category of products.

4) Surprise Customers Who Open Emails But Don’t Purchase

If you are using an email marketing platform, you will have a list of shoppers who are opening your emails but not returning to make a purchase. These shoppers are often waiting for a specific offer or are waiting for a specific time to purchase.

You can satisfy these customers by providing them with an incentive to encourage them to purchase now. Again, this incentive could be loyalty points, a coupon, or a free gift. Encouraging them to join your loyalty program has a greater chance of converting them into a loyal repeat purchaser, rather than always waiting until they are emailed a discount.

How to Segment:

Many email service providers give you access to reports and analytics, you can look at these reports to see which customers are always opening your emails but not completing a purchase.

5) Incentivize Brand Promoters Using Net Promoter Score

Net promoter score (NPS), allows you to get a feel for how likely a customer will be to promote your brand to others. You can email customers after they make a purchase and ask them to fill out an NPS survey. You can then look at how they answer this and take action accordingly. Read about the process in detail.

If a customer identifies as a detractor, you can direct them to an apology page. You might be able to save this customer and turn them into a loyal one! A well-resolved problem can often turn a disgruntled customer into a promoter.

On the other side of the spectrum, you can ask those who identify as promoters to help spread the word. One of the best ways to encourage these customers to share is with a customer referral program, which can be included in a loyalty program for increased results.

How to Segment:

A few weeks after a customer makes a purchase, email them your NPS survey, and add customers to different segments depending on how they answer. Your detractors are anyone who selected 0-5 and your promoters are 8-10.

6) Remind Last Minute Purchasers to Buy Now

Many customers have a set time they like to buy, especially near a holiday or long weekend. These last minute purchasers likely to wait until the last possible moment to place their order. You can create campaigns for these customers that encourages them to buy sooner.

Segment these customers and offer them a promotion that expires before your last guaranteed shipping date. This encourages them to not wait until the last minute again. You can also offer an additional reward if they spend more than that segment’s average order value.

How to Segment:

Sort orders by date and look for orders that were made on or near your last ship date for key times of the year. Look to see if those customers historically have purchased at this time. Those customers are in your last minute purchase segment.

7) Get At-Risk Customers to Shop With You Again

An “at-risk” or “lost” customer is a customer who has gone an uncharacteristically long time without making a purchase. Customers who have reached this point are unlikely to shop with you again. But, if you create a customer segment for them you can create offers to encourage them to come back.

If you know that your average time between orders is half a year, you can create an “at-risk” segment. This segment looks at previous repeat customers who have gone more than a year (or anytime you choose) without a purchase. You can create specific campaigns that focus on winning them back with aggressive offers that you would not want to offer to every customer group. 

How to Segment:

Examine a customer’s history and calculate their average time in between orders. When a customer falls far outside this normal purchase frequency, it is a sign that this customer is “at-risk.”

Gaining Customer Loyalty

Loyalty is a product of an amazing customer experience, and a critical component of customer experience is relevant and personalized communication. When your messaging identifies with customers on an individual level, they are much more likely to give you their loyalty.

A personalized experience is the guiding principle behind ecommerce customer loyalty. The above segmentation hacks will give you the edge you need to start creating loyal, repeat customers!

If you want more tips and tools to create repeat customers, you can download the “Ultimate Guide to Customer Retention.

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5 Customer Retention Tools for Long Term Ecommerce Success


A study in the Harvard Business Review showed that increasing customer retention by 5% can lead to a 25% – 95% increase in profit. But what is customer retention, and how do you increase it by 5%?

Customer retention is the act of getting more of your customers to stay loyal to your brand or business. A successful customer retention strategy turns one time shoppers into loyal, repeat purchasers that buy more, more often.

A customer retention strategy will boost your profitability while encouraging repeat business that drives a sustainable long term business model. Here are 5 tools you can use on your ecommerce site.

1) Loyalty Programs

Best for stores with repeat purchasability

A loyalty program is a fantastic way to boost customer retention. When a shopper is given additional value (like points) for shopping at your store, it becomes much more difficult to choose a competitor for their next purchase. Points create a switching cost. If a customer moves to a competitor, they will be leaving money (points) on the table.

Ecommerce loyalty programs allow you to reward more than just loyalty. You can reward points to drive other profitable actions like reviews, referrals, and social sharing. Points are often used to mask the true value of what you are rewarding. For example: you may be willing to pay 3 cents for a share on Facebook, but 30 points is a stronger motivator for your customer than 3 cents.

Who should use it: I generally recommend a loyalty program like Sweet Tooth to retailers with around 10% margin, or higher. Loyalty programs work best for retailers who have products that are purchased regularly (a couple times a year). Industries like fashion, supplements, and pet supplies are all great examples.

2) Gamification

Great when you are targeting a young audience

The application of game mechanics is not just for mobile apps and video games anymore! You can get the power of gamification working for your customer experience and purchase process. With gamification you are encouraging shoppers to complete actions by making it more enjoyable and adding a sense of competition.

Sites that incorporate gamification often have leaderboards, status, and badges so shoppers can showcase where they stand relative to others. Gamification is great because it can be incorporated into other things like promotions and even loyalty programs.

Who should use it: Gamification works well for retailers with a demographic that is familiar with game mechanics (usually a younger demographic). It also works very well when used in tandem with a loyalty program.

3) Personalization

Should be used by every merchant

Personalization allows you to increase customer retention through more relevant and tailored experiences with the brand. Personalization requires you to collect data about your customers that you can later use to to make recommendations and tailor promotions to each customers individual needs. There are a few ways to use personalization.

An example of this is, they take all your previous purchase information and make product recommendations based on what you like and the product you are currently looking at. Another example is U.S. Patriot Tactical – they made their homepage “smart” and it provides relevant offers and click through opportunities based on the interests of their contacts. 

A simple way to use personalization to increase customer retention is through email. Many email service providers allow you to mark emails with personalizations such as name and company. When a shopper is addressed by name with content they care about, they will be much more loyal to you and your store.

Who should use it: A total personalization strategy is something to work towards, but simpler tactics like email personalization should be used by every store owner!

4) Support Systems

Very useful for technical products

Support systems are anything added to your site to improve customer service and satisfaction. These systems could be help desk software like Zendesk or Freshdesk or live chat software like Olark or Zopim. All of these support systems allow you to resolve customer issues and conflicts quickly and efficiently, which provide a few key benefits.

The first benefit of support systems is that it provides a one on one experience. You can easily address customer issues and quickly get things resolved. A quickly resolved conflict can actually create a lifelong customer. Secondly, live chat software allows you to engage with customers in real time. Shoppers don’t want to wait, live chat is a direct and real time connection to your customer. Customer connections lead to retention!

Who should use it: These support systems are great for retailers who have a technical product that may require some explaining. It is also effective for retailers selling items that need to be installed. These systems are good if your customers need additional information or instruction.

5) CRM

Amazing for subscription model businesses

CRM is a tool used to increase satisfaction by keeping track of a customer’s entire journey. A CRM tool is used in tandem with other tools on this list to provide a total customer retention strategy. You can use your CRM to track which customers have received which badges with your gamification tactics or which customers have earned points in your loyalty program.

A CRM has many operational benefits, but it also can help with customer retention. When all customer information and interactions are stored in one place, it becomes much easier to provide an amazing customer experience (the backbone of a total retention strategy).

Who should use it: Retailers who have an established customer acquisition process, and have several interactions with each individual customer. A CRM works very well for industries with high customer lifetime value and are particularly effective for subscription based ecommerce retailers.  

A Customer Retention Strategy

Profitable for all ecommerce merchants!

Customer retention is the future of ecommerce! As more and more merchants start to sell online it will become harder and more expensive to acquire new customers, making retention even more important. Ecommerce merchants that focus on customer retention will be more sustainable and more profitable than those focused on always acquiring new customers.

For additional tools, tactics, and tips on a customer retention strategy download “The Ultimate Guide to Customer Retention.” 

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