19/07/2024 12:03 PM


Piece of That Fashion

Why is direct to consumer customer retention important in ecommerce?

Customer acquisition VS retention?

There are two integral components to growing your business; customer acquisition and customer retention. Put simply, customer acquisition is the ability to convert potential customers or convince new customers to buy your products whereas customer retention is a business or sellers ability to retain their existing customers over a period of time.

Understandably, businesses often funnel most, if not all of their resources into acquisition. Studies are showing that 44% of businesses focus more on customer acquisition, while only 18% focus on customer retention. This is because acquisition is often mistaken for growth.

In reality, if you focus all of your attention on gaining new customers those customers need to cover the churn rate of the customers you are not keeping and your rate of growth in order for your business to maintain growth in the long term. It is also important to consider a customers lifetime value to your company. Having more customers doesn’t always mean growing your business.

If your retention is poor then nothing else matters

Brian Balfour, Founder/ CEO of reforge, former VP growth at hubspot.

Why is direct to consumer customer retention important in ecommerce?

How can I increase my customer retention?

To increase customer retention you must first understand what the customer is wanting from your business – what is their reason to return or can you persuade them with incentives. Better return rates means a more valuable customer for your business. Here is a formula you can use to check customer value:

Customer Value = Purchase Frequency x Average Order Value

Track and understand your customer churn metrics

Step one is to understand your current customer base. The best way to improve your customer retention is to understand why your customers churn. You can then base improvements on that information.

A standard churn calculation is difficult to use in terms of a non subscription service as it is difficult to tell when to consider a customer as lost. However, a great way to measure your retention rates is to offer your customers the ability to provide feedback. Alternatively, you could Incentivize leaving a review to encourage your customers to provide feedback regardless of their opinion, providing you with information on what you are doing well and what can be improved.

Studies have found that only 1 out of 26 unhappy customers complain. The rest will find another company to provide the services they need so it is important to offer a platform where a customer will feel like their voice is heard. This will encourage your customers to voice their opinion. Giving you an opportunity to show case your top customer service skills on top of the information you need to improve the service you offer.


A huge trend we have seen sky-rocket over the last few years of ecommerce has been subscriptions. If you aren’t using them already, it may be time to consider. Since 80% of your future sales come from just 20% of your existing customers, it is understandable to see why companies using subscriptions have an edge over competitors.

Subscriptions can guarantee a steady stream of revenue while also allowing you to showcase new or exclusive products within the bundles. Showcasing to customers new products could also mean higher sales on those separately if they take interest. Ensure you strike the right balance between quality and value for your customers.

A great example of subscription model is Boku Superfood save 15% on every shipment or free shipping in the U.S. after your 1st order. These incentives to repurchase are enough to keep customers returning. Their press ratings speak for themselves, being featured in Marie Claire and Forbes is a huge insight into just how well subscriptions can be used.

Customer service

Bad customer service is a key driver of churn so when you focus on customer retention, your customer support initiatives could be the ticket to success.

Your support system enables you to communicate directly with your customers. Often at the times this communication could be the make or break in your relationship with the customer, so take this opportunity to give your customer a positive experience. 89% of consumers are more likely to make another purchase after a positive customer service experience.

Good customer service can be as simple of valuing your customers time, not only by providing quick resolution times but also by making sure that your customers are directed to the correct person with the knowledge needed. For more information on how to improve your customer support interactions check out this blog post.

Build trust

It is important to be transparent with your customers where possible. Over 90 percent of consumers say transparency by a brand is important to their purchase decisions. However, we do not condone spamming your customers with constant emails; there is definitely a balance that needs to be maintained.

Email your customers when it counts. An important example of this is if you experience delays. 17% will not return to a company after one late delivery, however transparency on this subject could mean the difference between an understanding customer and an unhappy, former customer.

Another way to keep your customers informed without filling their inbox is to have a newsletter blog for all of your companies news. You can use this to advertise new products/venture. It can also be used to share information to remain transparent with customers. This can be especially helpful in getting information out there if you don’t have the relevant consent to send out marketing emails to your customers.

Tip: Don’t forget about GDPR for relevant consent for your emails!

Loyalty Marketing

You can put incentives in place for your existing customers to entice them back for more. Incentives are often put in place to entice new customers but why not add an offer to sweeten the deal for continued engagement? 75% of consumers say they favor companies that offer rewards.

As a thank you for customer loyalty, you could provide exclusive perks to your customers such as free shipping or money off of their next order. You can even consider a birthday gift if that customer provides their date of birth in your email sign up form. Keeping your customers happy can be the difference between good and bad reviews. Making existing customers feel appreciated is a great step to referrals and additional orders.

Loyalty programs could also be an option for those really wanting to put effort into retaining customers. A little like the Nando’s stamps to receive a free meal after so many purchases. It is a win-win situation for all involved! Now, are you ready to start retaining more customers?