How to Build Ecommerce Customer Loyalty and Retention

Understanding and improving ecommerce customer loyalty can be the key to growing your online business.

After all, loyal customers spend more on your business, and they can help to bring in new customers. If you’re struggling to hold onto your customers and get them to be loyal to your brand, we’re here to help.

👋 In this guide, we’ll share 5 things you can do to improve ecommerce customer loyalty and retention.

Here’s what we’ll cover: 

• What is customer retention?
• Why improving customer loyalty and retention is important.
• 5 strategies to improve ecommerce customer loyalty.

Let’s start by understanding what customer retention is and how it relates to customer loyalty. 

What is ecommerce customer retention?

Customer retention, as a metric, is the practice of keeping customers engaged and consistently buying from your ecommerce store after their initial purchase. It involves customer management strategies and actions that you take to minimize customer churn (the loss of customers). 

Customer retention is all about maintaining a continuous business relationship with customers and ensuring that they keep coming back to make repeat purchases. 

You can determine your customer retention by expressing it as a percentage of the customers that you retain over a given period.

This metric is called customer retention rate (CRR), and it is calculated this way:

CRR = [(Number of Customers at the End of a Period – Number of New Customers Acquired During the Period) / Number of Existing Customers at the Start of the Period] x 100

So if you had 300 customers at the beginning of the month and you’ve acquired 150 more customers during this period, and at the end of it, you had 325 customers, here’s what your CRR will be:

In customer management, customer retention and loyalty are closely related. Let’s explore this relationship and what separates the two in the next section.

The difference between customer loyalty and retention

Customer loyalty refers to how much a customer is committed to, trusts, and prefers, your brand over other brands or businesses. Loyal customers buy from your business repeatedly and regularly over long periods. They tend to prefer your brand, product, or service above other alternatives. 

Loyal customers are usually first-in-line when you bring in new stock or introduce a new product. You have guaranteed purchases from them before they happen.

However, loyal customers are more than just transactions. They can become ambassadors of your ecommerce brand and bring new customers through referrals and reviews.  

How is customer ecommerce customer loyalty different from retention?

Both customer loyalty and retention are important, and they serve a similar purpose – to help your business to grow. Customer retention focuses on encouraging repeat purchases and prolonging the transactional relationship between customers and a business. 

Customer loyalty, on the other hand, involves forming trusted relationships where customers prefer a business’s products or services even when they have alternatives. 

Why is customer loyalty more valuable than retention? 

Customer retention is the first step towards customer loyalty, and the ultimate goal of retaining your current customers is to get them to become loyal to your business.

Customer loyalty can result from customer retention strategies, but this relationship is not always direct. You can have a repeat customer who isn’t loyal.

They might continue purchasing from you:

• Out of habit.
• Because of convenience.
• When they have no other better option – for instance, when you’re a monopoly. 

As soon as either of these circumstances changes, they’ll be happy to walk away from your business. Let’s say your business premises is next to a retained customer’s home. If they move away, a retained customer will look for an alternative close to their new location out of convenience. 

However, a loyal customer will look for alternative ways to get your product. For instance, by ordering them online to be shipped to their new location. For this reason alone, customer loyalty has more value to your business than retention. 

Now that we have an idea of how valuable customer loyalty and retention are let’s see why it is important to improve them. 

Why improving customer loyalty and retention is important

Improving ecommerce customer loyalty and retention is vital for any ecommerce business. One of the most important reasons for doing this is to reduce customer acquisition costs.

📈 Studies show that it costs about 5 to 7 times less to retain customers than it does to acquire new ones. 

This makes a lot of sense because to acquire new customers, you have to spend on marketing campaigns, offer incentives such as discounts, and so on. On the contrary, you can retain customers cost-free by improving their shopping experience and encouraging them to engage with your business after their purchase. 

Apart from reducing customer acquisition costs, here are other benefits of having a loyal customer base. 

Higher lifetime value

Lifetime value is a measure of how much net profit a customer will bring to your business during their lifetime as a customer. It takes into account the initial purchase they make and subsequent purchases after that until they stop. 

📈 Having a loyal customer base will increase their lifetime value since existing customers spend 67% more than first-time customers.

Improving customer retention and loyalty can, therefore, increase your revenue over time. 

Increased word-of-mouth referrals

Loyal customers often act as ambassadors to your brand, spreading positive word-of-mouth recommendations to their friends, family, and colleagues. It is an organic form of marketing that works effectively because it comes from a source that potential customers trust.

📈 Semrush reports that 90% of people are more likely to trust a word-of-mouth recommendation, even if it comes from a stranger. 

This shows that word-of-mouth marketing can work better than traditional advertising in bringing new customers to your online store. The best part about it is that it is completely free. 

Stronger brand credibility

Your loyal customer base will provide social proof that your business delivers value and meets customers’ expectations. New customers often look for social validation before making a purchase decision.

When they see others choosing and remaining loyal to your brand, they will likely believe that your brand is credible and worth considering. 

Flexibility when the market fluctuates

When the market fluctuates unfavorably, for instance, the demand for your products becomes unusually low, loyal customers can provide the stability required to keep your business afloat. Their continued efforts to constantly buy from you and advocate for your brand can help to cushion your business from these harsh external factors. 

Loyal customers are invaluable to you as an ecommerce store owner. Keeping that in mind, we can now look at strategies to improve customer loyalty. 

5 strategies to improve ecommerce customer loyalty

It’s time to optimize your store to improve customer loyalty and minimize customer defections.

In this section, we’ll look at 5 different strategies to achieve this. However, it’s important to note that WooCommerce doesn’t give you the flexibility to implement some of these strategies. 

But don’t worry. We’ve got you covered. We’ll include some powerful plugins that will help you to implement these strategies smoothly. Let’s dive in. 

1. Provide a seamless shopping experience

A seamless shopping experience is one of the most effective ways to keep customers coming back, and it is backed by evidence.

📈 In a study done by Forbes, 87% of the respondents admitted that they would make another purchase from a business if they had a positive experience.

This shows that a smooth shopping experience plays a key role in customer retention. 

Apart from retaining new customers, it also helps to ensure that your loyal customers don’t leave. Did you know that 1 in 3 customers will abandon a brand that they love after one bad experience? You can ensure this doesn’t happen by having a user-friendly website.

Here are some of the things that make it up:

• Clear and readable content.
• A clear and logical navigation menu.
• A fast loading speed.
• Responsive design for mobile devices.
• Most importantly – A simple checkout process. 

A simple checkout process saves customers time and effort which makes it convenient for them to buy from you. If you provide convenience each time customers work with you, you’ll encourage them to keep doing so.

To create a simple checkout process on your WooCommerce store that encourages customer loyalty, you’ll need the Flux Checkout plugin. 

Create a simple checkout experience on WooCommerce with Flux Checkout

Flux Checkout for WooCommerce is built to deliver the best shopping experience for your customers during checkout. With this plugin, you can replace your WooCommerce checkout with a multi-step checkout process. This simplifies the checkout flow by breaking it down into a series of simple and manageable steps. 

To simplify the checkout further, it reduces unnecessary fields and minimizes distractions so that your customers can focus on completing the checkout. Adding to a seamless checkout experience is Flux’s address autocomplete feature, which saves customer time and effort during this process. To top it all off, it is mobile-friendly to deliver a quick and easy checkout on desktop and mobile. 

After customers have completed their purchase, Flux helps you to foster customer loyalty by creating a custom order confirmation page. 

Inspire customer loyalty with a custom order confirmation page

Flux also allows you to create a custom, modern, and user-friendly order confirmation page. Flux’s ‘Thank You’ page also has a customizable content section on which you can add content to keep customers engaging with your business after completing their purchase.

This can be:

• Links to special seasonal offers or a continue shopping button to extend their engagement with your ecommerce store at that time. 
• A coupon code to encourage them to make another purchase.
• Links to your social media accounts that they can follow and engage with your business on these platforms. 
• Invite links to join your community forums on platforms like Discord, Slack, etc. They will be able to keep engaging with you and other loyal customers. 

You can also include content that may be useful to them in this section, such as video or PDF tutorials on how to use your product. Or content that aims to form an emotional connection with them, such as a message from the founder, a behind-the-scenes video on how your business works, or the charities/foundations that your business supports. 

All of this contributes positively to improving their experience and boosting engagement. To add to it, you can allow them to select their delivery date or pick-up time using the WooCommerce Delivery Slots plugin. 

Allow customers to pick date and time slots for delivery or pickup

Convenience encourages customer retention and helps you to build customer loyalty. You can show your commitment to convenience by allowing customers to select a date and time that is convenient for them to receive a delivery or pick up their orders from your premises. 

WooCommerce Delivery Slots allows you to offer this service and set up a delivery schedule that suits you on your WooCommerce store. You enhance customer satisfaction by creating delivery/pickup slots they can select during checkout. Alternatively, you can allow them to reserve these slots before shopping by displaying them anywhere on your site using a shortcode. 

To avoid frustrating your customers when fulfilling their orders, this plugin allows you to do two things:

• Set a maximum order limit per time slot. 
• Set holidays on which you won’t offer pickup or delivery services. 

In doing so, you’ll always have a schedule that you can meet to avoid overworking your staff or driving your customers away with poor service. 

2. Prioritize excellent customer service

📈 Brand loyalty heavily relies on customer service. In a 2022 Salesforce survey, 94% of the participants agreed that they are more likely to buy from a brand after a positive customer experience.

To turn first-time buyers into loyal customers, you must provide excellent customer service. 

A huge part of this is ensuring that customers can easily find help when they need it. For this, you should consider implementing live chat support for immediate assistance. Your customer support staff will respond to customers that need help and direct them on how to solve the issues they’re facing. 

Adding a live chat feature to your ecommerce store involves installing a plugin. WooCommerce has numerous plugins for this, such as Live Chat for WooCommerce and Woo Bot for WooCommerce.

With these plugins, you can respond to customers on your WooCommerce website. But if you want to do it on other platforms like WhatsApp or Facebook Messenger, there are plugins for this too. 

For more advanced issues, you might need customers to reach out to you on your contact pages. 

Direct customers to your contact page using Flux Checkout

Flux Checkout’s ‘Thank You’ page also comes into play in delivering excellent customer service. Suppose customers face issues or have any other inquiries post-purchase, Flux, allows you to include a ‘Need Help? Contact Us’ button on the order confirmation page.

You can link this button to your contact page, and when customers click on it, they will be automatically directed to this page. This way, you’ll make it easy for customers to reach out when they need help. 

3. Create a reward program

You can create a loyalty program that rewards customers for their repeat purchases. This program could contain incentives like redeemable points, exclusive access to new products or events, special discounts, etc. 

📈 Reward programs have been proven to boost ecommerce customer loyalty, as studies show that 68% of customers will join a loyalty program if offered.

The rewards motivate customers to keep buying from you to accumulate enough loyalty points (for example) to redeem their rewards. A reward program will give them a great reason to keep buying from you after their initial purchase. 

4. Incorporate a wishlist feature

Customers often come across certain products that they’re interested in but don’t intend to buy at that time. To ensure that they don’t forget these products, you can allow customers to save these products in their wishlists. 

Product wishlists are personalized collections of products that customers desire without making an immediate purchase. These collections are saved into their accounts for future reference when they intend to buy these products. 

📈 Wishlists play an important role in customer satisfaction and loyalty. A Google customer trends survey revealed that 40% of shoppers view their shopping experience as better when an online retailer offers a wishlist. 

With wishlists, you can improve ecommerce customer loyalty by creating personalized shopping experiences. This feature provides them with a convenient way to keep track of the items that they desire. 

Also, wishlists provide you with valuable insights into your customers’ preferences. You can use this information to personalize their experiences, for instance, recommending closely related products if the product in their wishlist is out of stock. Your customers will feel catered to, which will encourage them to keep coming back. 

To add a wishlist feature to your WooCommerce store, you’ll need the Wishlists for WooCommerce plugin. 

Add a wishlist to your WooCommerce store

Wishlists for WooCommerce allows customers to create as many wishlists as they want without any limits. They can add any type of product to their wishlist, including single products, grouped products, and single variations so that they can be specific with product attributes. 

Customers will consistently keep your store in mind, and when they intend to buy, your store is the first place they will think of. After creating their wishlists, this plugin allows them to keep these lists private or make them public.

This is useful in two ways:

• Increasing your store’s reach – In just one click, customers can share their wishlists on social media or via email.  
• Making gift-giving easy – Choosing the right gifts for friends and family can be difficult, but Wishlists for WooCommerce makes it simple. Customers can simply search for public wishlists and see the products that their friends/family are interested in and buy these products for them.

As the store owner, managing wishlists will be easy for you. Wishlist for WooCommerce is easy to use and it uses a familiar admin interface –there will be no need to learn anything new to use it. It has a clean, minimalist design guaranteed to give your customers a seamless experience when creating, editing, and sharing their wishlists. 

5. Regularly seek feedback

You should ask customers to share feedback on your products, services, or business in general, and then act on it.

You can get customer feedback in different ways, including:

• Asking them to complete a short survey after shopping with you to report on their experience and even leave suggestions on what can be done to make it better. Surveys are a great way to get customer feedback, as 80% of customers have filled out at least one survey in the past year. 
• Creating opinion polls on social media or other posts that require their feedback in the comments section. 
• Asking them to share user-generated content such as videos and images on your product after buying it. 
• Asking them to leave a star rating or written review on what they’ve just bought. 

📈 In a survey conducted by Fresh Lime (a customer interactions platform), 77% of customers admitted to favoring brands that ask for feedback.

Asking for feedback shows that you value customers’ opinions and that you’re always looking for ways to improve. This might just give you a competitive advantage in improving customer loyalty. 

That’s it – 5 key strategies you can implement to improve ecommerce customer loyalty. By implementing them, you can create a strong foundation for building lasting customer relationships.

Improve your ecommerce customer loyalty today

The value of building ecommerce customer loyalty and retention is immeasurable. Loyal customers are a constant source of revenue for your online store and brand advocates, willing to share their positive experience with your business to bring new customers to you.

You can improve customer retention and loyalty by implementing the strategies and plugins that we’ve mentioned in this guide:

• Flux Checkout for WooCommerce – to add content on the order confirmation page that encourages customers to engage with your business after their purchase.
• WooCommerce Delivery Slots – to allow customers to select dates and time slots when it is convenient for them to receive or pick up their orders.
• Wishlists for WooCommerce – to allow customers to create wishlists of the products they intend to buy in the future.

Get these plugins at once from our All Access Club or one after the other above, and give your online store the tools it needs to retain more customers and foster loyalty.