7 Hacks to Improve Customer Retention on Shopify

7 hacks to improve customer retention on Shopify.

Customer retention is the winning move you need to revitalize your business.

Many businesses focus on attracting new customers. While this is advantageous, retaining existing ones is the MVP for business growth. One of the reasons is that capturing new customers costs about 5-25X more than it would to retain existing ones.  

Studies have shown that you have a 60-70% chance of selling to an existing customer, while you only have a 5-20% chance of closing a sale with a new customer. Existing customers are 31% more likely to spend more on their average order value on your Shopify business. 

In this article, we will cover what customer retention is, factors that impact customer retention, and hacks for improving customer retention in your Shopify store.

What is Customer Retention?

Customer retention is the ability to have existing customers patronize your business over and over again. It indicates customer loyalty over a specific period. 

Customer retention is often a result of customer satisfaction. To boost retention rates, businesses must adopt several tactics and strategies to keep new and existing customers engaged and satisfied.

How to Calculate Customer Retention

You need the following values to calculate your customer retention rate;

  • Total number of customers at the start of a period (e.g 85 customers on the first of January, 2023)
  • Total number of customers at the end of a period (e.g 250 customers on the 30th of December, 2023)
  • Total number of new customers at the end of a period (250-85 = 165)

Once you have gotten these figures, you can calculate your retention rate with the formula below. 

Total number of customers at the end of a period – Total number of new customers 

numbers of customers at the end of the period X 100

For instance, if the figures above are what you started and ended with, then your retention rate will be:

(250 – 85) x 100 = 165 x 100 = 66%

⸻            ⸻

       250                250

In the retail industry, the average retention rate is 63%. However, while this formula and the metrics can give you an insight into your retention, there is more to it. 

Why Customer Retention is Important 

Customer retention on Shopify is important because it helps you generate more revenue with a lower marketing budget. A satisfied customer base leaves you with loyalists who would keep returning to your Shopify business with little or no persuasion. 

Here are some benefits of customer retention;

  • Increase in Revenue: a 5% increase in retention can raise ROI by 25-29%
  • Boost growth: a healthy customer retention rate can boost business growth
  • Referrals: offering quality services helps generate more positive reviews and referrals.
  • Lower marketing cost: retaining satisfied customers takes less effort and resources than it would for new ones. Therefore, retaining existing customers reduces your overhead cost.
  • Increase in Customer Lifetime Value: retention helps you get more value from customers when they spend more on your business often.
  • Competitive advantage: in a competitive marketplace, customer retention gives you an edge over your competitors. Providing exceptional customer experience can help set your business apart, making it the go-to choice for customers.
  • Brand advocacy and loyalty: Retained customers often become brand advocates who actively promote your business with or without an incentive. They share positive experiences with others, leave online reviews, engage with your brand on social media, and create user-generated content that boosts brand trust. This leads to a boost in brand authority and attracts new customers. 

Factors that Affect Customer Retention 

  1. Customer satisfaction: if customers are satisfied with the overall shopping experience from your Shopify store, they are more likely to become loyal to a business. The opposite is applicable if a customer is not satisfied. 
  2. Convenience and ease of use: you may offer the best services, but if your customers encounter difficulties shopping on your website or using your product, it could keep them away from returning. 
  3. Quality of products or services: unless you are catering to customers who do not care about quality, providing high-quality products or services that meet or exceed customer expectations is non-negotiable for retaining your Shopify customers.
  4. Brand reputation: brand reputation is crucial to how customers respond to a business.  A positive brand reputation establishes trust which is a foundation for customer loyalty. The opposite is true in the place of a negative reputation. 
  5. Customer support: Offering responsive, timely, and efficient customer support can significantly impact your Shopify customer retention rate. Promptly addressing inquiries, concerns, and issues helps boost customer satisfaction which is a perfect way to build trust and loyalty.
  6. Competitive pricing: 78% of customers say they consider pricing when selecting a business to buy from. Offering your customers fair prices compared to competitors can influence their decision to stay with your Shopify business leading to an increase in customer retention rate.
  7. Competitor actions: Actions taken by competitors, such as introducing new features, lower prices, or better service, can cause you to lose customers. Adapting to changes and implementing new features is crucial to boost retention rates on Shopify. 

It’s important to note that these factors can vary depending on the industry, target audience, and specific business circumstances.

7 Hacks to Improve Customer Retention on Shopify

1. Create a Good First Impression

The experiences of a first-time customer on patronizing your Shopify business will determine whether or not they will return. 

Be deliberate about shaping a memorable experience for your debut users. Ensure your customers don’t encounter any challenges from when they first arrive on your page until they get to the checkout page and receive their orders.

Any mishap at any of these stages can hurt your business impression and deter customers. Creating a good first impression goes beyond the shopping experience on your website.

But a combination of good customer service, seamless shopping, well-timed email trigger, follow-up messaging, e.t.c. all cohesively put together. And they are what you need to improve customer retention in your Shopify business. 

2.  Solve a Pain Point for Customers

Have you ever found yourself choosing a particular brand over its competitors even though they offer similar products and services? Chances are you chose that brand for a likely reason, they meet a specific need. It could be affordability, comfort, quality of product and service, ease of access, and more. 

You can apply this strategy to your Shopify business if you want to stand out from the rest of the competitive market. 

Take Silverts for example, Silverts is a clothing brand that sells male and female apparel in a highly competitive market. However, they stand out by selling comfortable clothing for seniors, disabled, and sick patients.

Their outfits solve a pain point which is the ease of wear. They are easy to put on with little or no assistance. 

This is a great USP because it solves the greatest challenge these categories of people face when shopping for clothing.

Find a pain point in your industry and give customers what they need. You would be amazed to see how your retention rate will skyrocket. 


3. Encourage User-generated Content 

Encouraging user-generated content is a great way to make your customer feel heard and valued. Rather than only focusing on how to sell more products to your customer, encourage them to share their experience about previous purchases.

This is a great way to boost your Shopify retention rate. Many customers will grab the opportunity to share their experience using your product or service. 

Solicit feedback from customers occasionally to understand their pain points, satisfaction levels, and suggestions for improvement. You can also request videos and photos of customers using your product and services. And share them on your website or social media channels. 

Also, endeavor to act on the suggestions and reviews to improve your customers’ experience. In addition to customer retention, UGC helps you build authority and attract more customers.  

A very common form of user-generated content is online reviews. 

4. Personalize the Customer Experience

A common mistake many businesses make is providing a one-size-fits-all solution for their customers. This marketing approach has proven not to be good for business. In a survey by Harris Poll, 39% of customers say they won’t patronize businesses that don’t personalize their experiences.

Therefore, if you wish to boost your Shopify customer retention rate, keep in mind that every customer that finds their way to your Shopify store is different and has a unique need they are looking to solve. Treating them as such can influence customer satisfaction and increase retention. 

Tailor your interactions, upsell offers, and customer support to each customer’s preferences and needs. Use customer data to understand their preferences and offer personalized services.

You can always automate this process to yield better results. However, it would require that you follow the right marketing automation approach. 

5. Share Educational Content

In the competitive world of e-commerce, there are probably a million and one businesses offering similar products and services as yours. That begs the question, how do you stand out? 

An excellent way to be the customers’ choice is by sharing educational content for free. It could be a blog, newsletter, guide, product description videos, and whatnot. 

Say a customer arrives on your Shopify website and wants to buy a skincare product. There are so many options to pick from leaving them a little unsure about the initial product they came looking for.

If you have content about each skincare product addressing details like:

  • Ingredient
  • What it works for
  • Side effect
  • When to expect results
  • How to apply

And more. 

This would help your customer become more decisive and to avoid product abuse. By so doing, you are offering more value to your customers beyond your products and services. This is a great way to build customer loyalty and improve customer retention. 

Consider Dang. Dang is a skincare brand with a dedicated blog for sharing knowledge about their products and the best ways to apply them. 

6. Gamify Customer Experience 

Your customers are real people with personalities who do more than shopping when they come online. Sometimes they are only looking to relax by engaging in activities like watching videos, solving puzzles, playing games, and more.

By gamifying activities on your Shopify website, you can attract more customers to your store even when they have no intentions of purchasing anything.

Your customers will always be excited to participate in these games as they are fun and engaging. And are more likely to buy a product while they are at it. Website gamification is one surefire way to attract new customers and retain existing ones.

The Adoric spin-to-win feature allows you to gamify customers’ experience on your Shopify website. You can offer customers rewards such as coupons, discounts, free shipping, and more as incentives for playing the game. Note that the incentives must be claimed ASAP.

This is a powerful marketing strategy that helps you generate more sales without seeming very pushy. Plus, you can name each of the features whatever you like. 

In addition, gamification not only helps you to boost customer retention but also helps to increase sales, grow email lists, engage new customers, and convert them into paying leads. You can learn more about how gamification can help your business. 

7. Stay in Touch with Inactive Customers

Do not neglect your inactive customers. Sometimes all they need is a little push to start buying from you again. Develop strategies to bring them back and turn them into loyal customers. 

You can approach your inactive customers through different ways to remind them of what they are missing and why they need to get back into using your products. Show them that you value their business and want to win them back.

Some of these approaches could involve creating and sharing targeted offers, personalized reactivation campaigns, sending win-back emails with juicy offers, posting user-generated content, or reaching out to understand their reasons for disengagement. 

A great way to ensure your strategy is effective is to target that time of the year when your product is high in demand or when customers should be running out of products. 

For better effect, make it easy for customers to access your product and make them excited about shopping from your Shopify store again. 

The Importance of Customer Retention Cannot be Over-emphasized 

Remember that retaining customers on your Shopify store is an ongoing process that requires continuous effort and adaptation and is not a one-off practice.

Also, not all the strategies discussed in this post may work for you. But you stand a better chance of increasing your customer retention by giving them a try. The more reason why you need to figure out what works and what doesn’t.

Regularly analyze customer data, monitor retention metrics, and refine your strategies to stay ahead of customer expectations and competition.

The main aim of customer retention is to extract more value from customers and increase ROI. While you develop your retention strategy for existing customers, Adoric can help you boost conversion by turning leads into loyal customers. 

Give Adoric a try today!

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