How to grow your eCommerce revenue clever – it’s all about your customers


4 minute read // E-commerce

It is 2023. Our digital world is bursting and with it eCommerce does. Not so long ago it was easy to get into the eCommerce game by simply generating paid ads. But these are getting more expensive and at the same time more unseen because of the load of paid ads.

And to be honest, this situation won’t get better… so, what is our solution to generate revenue and grow your business if reaching customers through paid ads gets harder? That’s right, we all heard of it – Customer retention. If you are a marketeer or related to the industry you might have heard of the following facts before:

Acquiring a new customer can cost up to 5x than retaining an existing one.

The success rate of selling to a new customer is 5-20%, while it is 60-70% for an existing one.

Customer retention by 5% can increase your businesses profits up to 95%.

So why isn’t my revenue increasing even though I get more orders?

Because of the “single-purchase customer“.

You spent a significant amount of money to attract them to your store and they see your paid ad by accident on Instagram when scrolling through their friends stories. But after making one purchase, they rarely return. Additionally, many of them create additional expenses for you by returning their order or contacting customer service to address an issue.

SO what does this mean in figures? It simply means, that if you sell a product to a one-time customer the calculation looks like this:

Illustration showcasing the benefits of customer retention.

And this will not be the only problem you face, because after this process you will have to generate new customers again and have to pay for reaching people and like that, the stone keeps on rolling and you may write red figures even though you’re selling. These one time customers can even be analysed with the so called ‘Churn rate’, which shows the percentage of people buying something once and not coming back. Shopify is preventing an overview for your business of your customers & their data in the first-time vs returning customer sales report.

What can I do to keep customers?

First of all, don’t freak out if you’re a Newbie in the business. It’s completely normal that these kind of orders are made and especially in the beginning fase, you’ll experience these one time purchases. It is also very depending on what you are selling and what kind of target group you are addressing to. But there are ways to help breaking the circle:

Offer exceptional customer service: Provide excellent customer service to build trust and a positive relationship with your customers. Respond quickly to their inquiries and resolve any issues promptly. You will stand out if your Webshop doesn’t only look and seem trustworthy, but really is it.

Loyalty programs: Create a loyalty program that rewards customers for repeat purchases. Offer exclusive discounts, early access to sales, and other incentives to encourage them to keep coming back.

Personalised recommendations: Use customer data and purchase history to offer personalised product recommendations. This will show customers that you understand their preferences and can help them find what they’re looking for.

Follow-up emails: Send follow-up emails after a purchase to thank customers for their business and offer suggestions for similar products they might be interested in.

Stay in touch: Keep in touch with your customers by sending newsletters, promotional emails, and updates about new products or sales. This will keep your brand top-of-mind and encourage repeat business.

Nowadays these ways don’t even have to take up a lot of your time, since there are tools and apps to generate customer service for you. One excellent example: the Shopify application ‘Klaviyo’, where you can set up different automated email and SMS flows. To find out more about Klaviyo click here.

How does my revenue change with returning customers?

Building customer relationships doesn’t only bring you more orders, it also reduces the Customer Acquisition cost. With the tips above you will see a difference in your customer journeys, plus, it makes our example calculation much more approachable:

Illustration showing the effects of customer retention of business revenue.

Having a loyal customer base is crucial for any eCommerce to succeed in our modern era. It’s the backbone of continuous growth and a healthy business. The more predictable your revenue stream, the higher your company’s net worth. This holds truer now than ever before, and it’s not just our opinion. Online advertising is becoming more expensive and less effective, and people are increasingly aware of their privacy, disliking being tracked and targeted on the internet. Entrepreneurs are also recognising the drawbacks of relying solely on ever-changing algorithms. Therefore, it’s time to not forget our basics: establishing authentic connections with your customers.

This ground rule is vital for several reasons. Most of all, helps to build trust and loyalty, which are critical factors for customer retention. When customers feel understood, valued, and appreciated, they are more likely to return to your brand and recommend it to others. Secondly, an authentic connection enables you to gather feedback and insights directly from your customers, allowing you to make informed decisions about your products or services. This feedback loop can help you identify areas for improvement and innovation, ultimately leading to better customer satisfaction and increased sales. Thirdly, having an authentic connection with your customers can provide a competitive advantage over other brands that may not prioritise this aspect of customer service. With so many options available in today’s marketplace, a brand that can create a genuine emotional connection with its customers is more likely to stand out and thrive in the long term.

To sum up

Customer retention is the vital factor in the success of any eCommerce business in today’s digital world. With the rising costs of online advertising, building authentic connections with customers is becoming increasingly crucial. Providing exceptional customer service, creating loyalty programs, offering personalised recommendations, sending follow-up emails, and staying in touch with customers are all effective ways to retain customers and build their loyalty. By doing so, businesses can reduce customer acquisition costs, increase revenue, and create a more predictable revenue stream. Ultimately, building authentic connections with customers is not only beneficial for the business, but it also fosters trust and loyalty, enabling customers to feel valued and appreciated, leading to increased customer satisfaction and higher sales.

We at Flatline Agency are here to help you take your business to the next step, including Shopify’s development, design, and marketing. If you are interested, please feel free to contact us.

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