Ecommerce businesses are investing significant time and resources in acquiring new customers. However, with rising acquisition costs and fierce competition, acquiring new customers alone is no longer enough. Customer retention has become a top priority, focusing on customer satisfaction and fostering brand loyalty.
In this blog post, we'll delve into what eCommerce retention rate is, why it's crucial, and actionable strategies to enhance it.
Decoding Ecommerce Customer Retention
Ecommerce retention rate represents the percentage of existing customers who continue purchasing from your brand over a specific period. It's a vital metric for evaluating your brand's ability to cultivate customer relationships and transform them into repeat buyers.
For subscription-based businesses such as SaaS companies or ecommerce brands offering subscriptions, calculating retention rate is straightforward. Customers with active subscriptions are considered retained, and the rate is measured by comparing active subscribers from one month to the next.
However, non-subscription-based businesses face a more nuanced calculation. Retention rate serves as a proxy for understanding customer loyalty and repeat purchase frequency, considering factors like the time between purchases and customer engagement.
Why Ecommerce Retention Rate Matters
Ecommerce retention rate holds immense significance for several reasons:
1. Cost-Effective Growth: Retaining existing customers is more cost-effective than acquiring new ones. A mere 5% increase in customer retention can boost revenue by up to 95%, according to Hubspot.
2. Revenue Generation: Repeat customers, though forming only 21% of the average brand's customer base, contribute to 44% of the brand's revenue due to their higher purchase frequency and larger order values.
3. Improved ROI: Over-relying on acquiring new customers can lead to overspending on low-return customer relationships, diminishing ROI. Customer retention ensures that the value of acquired customers is fully realized over time.
The Average Ecommerce Retention Rate
The widely accepted average customer retention rate for Ecommerce stores is approximately 31%, according to Omniconvert. However, it's essential to note that retention rates can vary widely based on a brand's efforts in building customer loyalty and engagement.
Introducing a Novel Approach to Ecommerce Retention
In the competitive Ecommerce landscape, retaining customers is of utmost importance. Achieving a high retention rate requires delivering exceptional value and experiences, and this is precisely where Your Brand Travel (YBT) excels.
YBT offers a powerful and cost-effective solution for both attracting new customers through special rates and enhancing customer retention. By providing segmented travel packages tailored to individual preferences within your brand's dedicated travel portal, YBT delivers unique and captivating travel experiences. Moreover, customers can find all the products they need for their trip at a favorable price, which is a true game-changer. This approach not only saves customers time and money but also ensures they receive personalized travel recommendations that maintain their engagement with your brand.
By integrating YBT's solution in an easy way, you can effectively nurture brand loyalty, reduce customer churn, and foster sustainable growth, even during economic slowdowns. Your customers enjoy personalized travel experiences and preferential pricing, creating a mutually beneficial situation for your brand. Plus, your travel portal and customer service will carry your brand's name, reinforcing your brand identity and trustworthiness.