--- title: The Importance of Having a Customer Retention Strategy description: A customer retention strategy is a critical component of successful eCommerce operations. Learn everything needed to develop and implement one in this guide. image: https://blog.shift4shop.com/hubfs/Stock%20images/Customer%20Retention%20-%20Green%20Book%20on%20the%20Black%20Bookshelf%20between%20white%20ones..jpeg --- [![eCommerce Blog](https://blog.shift4shop.com/hubfs/shift4shop/shift4-blog.jpg)](https://blog.shift4shop.com/) [![shift4shop logo](https://blog.shift4shop.com/hubfs/shift4shop/shift4shop-Black.png) |Blog](https://blog.3dcart.com/) [Sign Up](https://www.3dcart.com/freetrial.htm?utm_campaign=Blog&utm_source=blog&utm_medium=blog-cta&utm_content=free-trial-cta) [Subscribe](https://blog.shift4shop.com/customer-retention-strategy#subscribeBlock) [Customer Service](https://blog.shift4shop.com/topic/customer-service)| 6 min read # The Importance of Having a Customer Retention Strategy By [Jimmy Rodriguez](https://blog.shift4shop.com/author/jimmy-rodriguez) [0 Comments](https://blog.shift4shop.com/customer-retention-strategy#comments-listing) ![](https://blog.shift4shop.com/hubfs/Stock%20images/Customer%20Retention%20-%20Green%20Book%20on%20the%20Black%20Bookshelf%20between%20white%20ones..jpeg) Keeping your competitive edge in this digital era takes careful planning and preparation to stay ahead. Consumers are continuously bombarded with advertisements and marketing schemes cleverly disguised to try and coerce them to leave their current company and choose a new option.  [82% of companies](https://www.smallbizgenius.net/by-the-numbers/customer-loyalty-statistics/) agree that customer retention is cheaper than acquisition, and the main reason for this is because the customer already knows you exist! Your focus with retention should be on rewards, profit increase, special offers, and more. Understanding which approach works best for you will help you identify the right direction to go. The good news is, you've already done the legwork to convince your customers to buy from you once. Now you need to create a customer retention strategy that works on [keeping them around](https://www.brosix.com/blog/tech-support/) each time they need to purchase your product or service. If you're wondering what customer retention is and how to measure it, increase repeat customer rate, and encourage them to build on their average orders, read on to find out everything you need to know! ## What is Customer Retention? Customer, or client, retention is the act of encouraging customers to choose you time after time for what you have to offer. Companies all over the internet are fighting to gain your customer's attention and pull them away from you to choose them instead, so you have to do your part to keep them in your court. Customer retention is cheaper than [customer acquisition](https://www.businessdictionary.com/definition/customer-acquisition.html) because your reach is narrower. Instead of casting a net to grab as many people as possible, you cater to your campaigns to remind them you exist and entice them to come back to you! All companies need both customer retention and customer acquisition to succeed. Still, the more your company grows and builds its customer base, the more you can shift your focus to retention.   ## Why is Customer Retention Important? ![customer retention](https://blog.shift4shop.com/hs-fs/hubfs/iStock-1174293851.jpg?width=900&name=iStock-1174293851.jpg) Understanding what customer retention is goes hand-in-hand with why it's vital to your business. Increasing your retention rate is an opportunity for you to improve your relationships with your customers, connect with new ones, and understand what the people want from you. ### **Repeat Customers Tend to Spend More** Once you've convinced a customer to buy from you the first time, it's easier to convince them to buy more from you. The more your customer buys from you, the more their order quantity will increase over time as long as they're satisfied with their purchase, and they feel like their order is valuable. #### **Nurture Customer Loyalty** If you want to increase the likelihood that your customers will recommend your business to their friends, family, and colleagues, you need to have happy customers. Customer loyalty is crucial in [generating new leads](https://www.techopedia.com/definition/14440/lead-generation) and word-of-mouth marketing opportunities. ### **Access to More Data** When it comes to [eCommerce businesses](https://blog.shift4shop.com/the-ecommerce-process), data is crucial to understanding your current and returning customers better so you can cater to their experience more precisely. The longer a customer sticks around, the more data you'll have access to, and the more you can learn from their shopping habits. Identifying their patterns, demographics, and other important factors can help you create more [effective marketing strategies](https://shanebarker.com/blog/saas-marketing-strategies/) for retention and acquisition. ### **Focus on Customer Lifetime Value** Also known as CLV, customer lifetime value focuses on how much money a customer will bring into your business through their entire time as your paying customer. Generally, when you take a customer's average order value, multiply that by their purchase frequency, and then multiply that by the average customer lifetime, you'll have their CLV. While this may seem like an unimportant detail to monitor, it can help you better understand and share why retention is important to your company as a whole. ### **Boost Your Average Order Value** Return customers are the easiest way to increase your current average order value (or AOV). First-time customers tend to be more cautious with their purchases, so having impressed customers come back for more, you can almost guarantee that they will add more to their cart than they had previously. The more return shoppers, the higher this AOV will be each time you measure your data.   ## How to Measure Customer Retention ![measure customer retention](https://blog.shift4shop.com/hs-fs/hubfs/iStock-876997894.jpg?width=900&name=iStock-876997894.jpg) Since customer retention is [essential to your business success](https://www.inc.com/jeff-haden/best-way-to-calculate-customer-retention-rate.html), you must understand how to measure your retention and loss data, so you know when and how to act and react as things change. Customer retention measurement focuses on how well your business is retaining customers and your generated revenue. By tracking your success and miss-steps in this area, you will better see if you're meeting customer needs and if you continue to meet their needs each quarter. The customer retention rate metric provides a measure of the number of customers you continue to do business with for a specified period. By creating customer loyalty and collecting retention rate data, you will better understand how you're doing with retention.   ## Tips for Creating a Customer Retention Strategy Your customer retention strategy should focus on taking your business goals and insights into consideration. Goals like increasing customer loyalty or developing better relationships can help you better identify where you should focus your efforts.  Your business has a specific niche that should be reflected in your retention strategy, but these five tips can help you find your direction and connect all the necessary pieces. ### **1. Top-Tier Customer Service** Customer service should always exceed expectations to make a lasting impact. One of the quickest ways to lose a customer for good is by offering a subpar or frustrating customer service experience. When your customer is already frustrated by something, letting them know you care and that they matter is the easiest way to turn around their shopping experience. Three easy ways to [boost your customer service](https://blog.shift4shop.com/topic/customer-service) are: 1. Ensure your customer service is consistent 2. Offer multiple ways to connect with help 3. Make it easy for them to find the right support by offering specialists ### **2. Discounts and Gifts** Shoppers love to feel appreciated, so when you offer them [surprise gifts](https://blog.shift4shop.com/attracting-repeat-customers-with-3dcarts-gift-wrap-feature) or special discounts, they will be more likely to come back and shop with you again. Focusing on products they would already purchase is ideal, and adding personal touches like a message can help them feel valued. You can create VIP-style lists, clubs, and even consider vouchers for your store.  ![customer promo code](https://blog.shift4shop.com/hs-fs/hubfs/iStock-1030395802.jpg?width=900&name=iStock-1030395802.jpg) Another easy and relatively low-cost option are small gifts like stickers with your brand, birthday cards, or personalized thank you notes that can make them feel appreciated. Surprise gifts and discounts encourage customers to shop again and can encourage them to promote your business with their connection. ### **3. Surveys and Follow-Ups** Online or email surveys are an easy way to gain personal insight into your shopper's mindset, preferences, and shopping patterns. While it's impossible to please every customer, you can use [customer feedback tools](https://blog.shift4shop.com/customer-feedback-tools) to highlight common issues and offer multiple-choice options to keep consumers focused on their most pressing problems.  Identify a frequency for sending out surveys and consider following up with those who participated to let them know you appreciate their input. ### **4. Keep Customers Informed and Connected** When you take the time to inform your customers of changes, new product launches, partnerships, and company milestones, they will feel more invested in your business. You can do this through email communications, newsletters, and social media. ### **5. Make it Personal** Taking the time to connect with your customers personally is critical to improving their experience and increasing conversions. Consumers don't want to feel like they're just another dollar sign to you, so taking the time to offer personalized experiences can help them create a better perception of you and feel more invested in your success.   ## **Why it's Important to Focus on Customer Retention** Where is your business currently in its life cycle? Are you brand new, just gaining traction, or making at least one sale per day? If so, you may want to shift your focus more towards customer acquisition. If your business is established and regularly receives ten or more sales a day, then it's time to shift your focus into retention! You've already gotten the market's attention, and you clearly have what people are looking for, so turn your attention towards keeping them coming back to you time and time again! As an online eCommerce business, you need to understand the importance of loyal customers and a customer retention strategy. Measuring, tracking, and altering your key metrics can help prevent lost customers and reduced revenue. When it comes to digital marketing and eCommerce, acquiring new customers is important, keeping around the loyal ones is crucial. Create a personalized strategy that can be implemented across your entire company and see the difference it can make for you! - [Tweet](https://twitter.com/share) [![Free report: The Real Cost of Running a Shopify Store](https://no-cache.hubspot.com/cta/default/3365633/3c1385fa-c137-456e-8113-ac4bb8fcd6c6.png)](https://cta-redirect.hubspot.com/cta/redirect/3365633/3c1385fa-c137-456e-8113-ac4bb8fcd6c6) ### Leave a reply or comment below ### Sign up for Marketing Tips ### Related posts [How To Set Up Post-Purchase Surveys That Convert](https://blog.shift4shop.com/post-purchase-surveys) Your relationship with customers doesn’t end at the point they make a purchase. As a matter of fact, it’s just the beginning. [Read More](https://blog.shift4shop.com/post-purchase-surveys) March 05, 2025 [12 Customer Service Channels to Help Small Businesses Thrive](https://blog.shift4shop.com/customer-service-channels-small-businesses) If you’re a small business or startup, you know just how vital it is to create and maintain a community of happy and loyal customers. One of the best ways to do so is, of course, to deliver ... [Read More](https://blog.shift4shop.com/customer-service-channels-small-businesses) February 19, 2025 [A Quick Guide to Developing an eCommerce Purchase Support Team](https://blog.shift4shop.com/ecommerce-purchase-support-team) Do your customers require a bit more assistance than other online businesses? A purchase support team can significantly enhance your purchasing, order processing, and customer service systems. Let’s ... 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