With yearly rising customer acquisition costs (CAC) over 60% in recent years, many Shopify merchants struggle to make enough sales to offset the amount they spend finding new customers.
In short, Shopify merchants are spending more on advertisements and marketing than what they’re making back in sales.
However, marketing to existing customers is 5-25 times cheaper than trying to find new customers.
In this article, we’ll offer helpful tips to supercharge your Shopify store’s customer retention, ways to enhance your customer’s journey, and ways to lower your customer acquisition costs.
Customer retention is a store’s ability to keep customers happy and coming back frequently to generate reliable and steady revenue.
Compared to first-time buyers, repeat customers also typically spend 67% more on their orders, which drastically improves the average order value (AOV) to make more revenue from each sale.
Because it can be anywhere from 5 -25 times more expensive to create ads for lead generation and online sales, many eCommerce merchants are looking for ways to get the most out of existing assets, like transactional emails, to promote new products to existing customers.
By offering great products and ensuring a smooth ordering process through automated transactional emails, Shopify merchants can improve their customer’s journey and boost customer retention — making repeat purchases more frequently among existing customers.
Customer retention is related to another metric, customer lifetime value (CLV), which is an estimation of how much a customer will spend over their lifetime with a company.
Improving customer retention will improve these other sales metrics:
Your customer retention rate and customer experience (CX) are nearly inseparable — you cannot expect to have high customer retention without providing a great customer experience.
We’ve all had bad experiences that have kept us from going back to a store, but did you know that 90% of retail customers will avoid a store after just one bad experience?
Among the many reasons, these are usually the most common complaints people have about their customer experience:
However, many of these complaints can be solved through automated transactional email flows.
For example, you can send abandoned checkout cart emails and offer a limited-use discount code to get your customer to complete their order.
You can also automatically send customer refund notification emails, and shipping update emails to promptly respond to any important changes in their recent order history.
Before you can retain customers, you must first make a sale. Since CAC has increased, turn to your post-purchase notification emails to use your existing customers to market your store to their friends and family without spending money on paid ads.
Below we’ll examine each step of the customer’s journey, and how you can enhance each step for improved customer retention.
The way your new customers hear about your company plays a huge role in their continued relationship with your company.
Instead of coming across an ad online, it’s better if your prospective customers are referred to your store by your most loyal brand advocates and customers — their friends and family members.
By setting up a customer loyalty program, you can encourage your best existing customers to actively refer their friends and family to your store, giving you a warm lead to sell new products to, and drastically lowering your CAC costs.
During your consideration stage, you’re actively targeting people who need your products, but are still researching and comparing similar items online.
To reach these people, consider writing comparison blogs on your website describing how your product stacks up against other popular items online.
By writing about other companies’ popular products on your page, and comparing them to your store’s products, you’ll be able to improve your website’s search engine optimization (SEO) to attract more traffic from Google searches.
Because your blogs are educating your audience on why your product is better than the competition, your readers will feel more confident to make their purchase, resulting in a conversion.
At the conversion stage, or purchasing stage, your prospective customer is nearly ready to buy, but just needs a gentle nudge to push them over the edge and commit to purchasing their first order.
Consider creating a unique one-time discount code, such as 10% off their first order, when they sign up for an account with your store. This can be included in their Welcome transactional email.
Even if they don’t end up purchasing at this point, you’ve collected their email address to start a post-purchase email flow to keep them regularly engaged with your online store.
Once your customer makes their purchase, send them an optimized order confirmation email with 2-4 personalized product recommendations, upsells and cross-sells, a discount code, and referral links to drive immediate repeat purchases.
Once you’ve made your first sale, your customer begins their post-purchase email flow process.
From receiving their order confirmation all the way to their shipment delivered notification, you’ll be sending at least a few emails updating your customer on their order’s progress.
Each one of these post-purchase emails is another touchpoint in your customer’s journey — an opportunity to generate more engagement with your store, such as:
The last stage of the customer’s journey is advocacy, which effectively turns your first-time buyer into a brand evangelist who’s constantly referring new people to your store.
This completes the customer journey’s cycle where it began, at the awareness phase, by using your customer’s loyalty to recommend your goods and services to new customers in their awareness phase.
To achieve customer advocacy, you will need to consistently follow these best customer retention practices:
UpOrder is a Shopify app that upgrades your email notification templates to drive new upsells, increase repeat customers, and improve customer retention.
UpOrder (formerly Spently) uses a drag-and-drop email template builder to create fully branded email templates — no coding required.
Now you can boost post-purchase sales with powerful product recommendations, and supercharge your customer loyalty with automated recovery and retention campaigns.
Download UpOrder today and see your sales increase by 14%.