Customer Retention refers to any action that a company takes to keep customers coming back to make purchases beyond their first purchase. Customer retention is extremely important for growth, especially in ecommerce. With consumers having more options than ever for online shopping, ecommerce brands have to engage in retention-specific initiatives to incentivize their customers to come back and continue buying from them. Success in retention can be measured, at its highest level, through the number of orders per customer. If an ecommerce company has 2-3 purchases per customer (or more), that would be considered a very healthy retention number and likely lead to major growth.
Customer Retention Strategies
Customer retention strategies tend to center around email & SMS communications. Often, newsletters, community building initiatives, and retargeting ads are lucrative strategies as well. One of the best retention strategies is a subscription business model because when you convert a customer to a subscriber, retention is built into the plan; they have recurring purchases set with your brand (usually on a monthly basis). Really, anything that gets customers to come back and purchase more can be considered a customer retention strategy.