How to retain customers on your Shopify store

Why should you focus on increasing your customer retention?

Various studies have shown that retaining customers could be anywhere from 5 to 25 times cheaper than acquiring new customers. To make this sweeter, customer retention actually helps you with customer acquisition since loyal customers are 4 times more likely than new customers to refer you to their friends and family. These loyal customers are also 7 times more likely to try your new offerings.‍

Which customer retention metrics should you focus on for your Shopify store?

1. Repeat purchase rate

You can use this formula to calculate your repeat purchase rate:

Repeat purchase rate = (Number of customers who made multiple purchases / total number of unique customers) x 100

2. Purchase frequency

To calculate your average purchase frequency for a specific period, you can use this formula:

Average purchase frequency = Total number of purchases / Total number of unique customers‍

3. Average order value

A high average order value could be an indicator of good levels of customer retention because loyal customers would be the ones most open to spending a lot of money in a single order (they trust you) and new customers would be less likely to make very expensive purchases the very first time.

To calculate your average order value, divide your total revenue for a certain period by the number of unique orders you had during that period.

Average order value = Total revenue / Total number of orders‍

4. Customer lifetime value

Customer lifetime value = Average order value x Average purchase frequency x Average customer lifespan

Quick tip: Read this article to learn how to increase your customer lifetime value.

How to improve your customer retention on Shopify?

1. Respond to customer queries quickly

That’s why you need to deploy an intelligent chatbot on your Shopify store. If you use an AI-powered Shopify chatbot from Engati, you can answer around 80% of your customer queries instantly, passing only the most complex questions on to live agents.

Now, speaking of those complex questions; you don’t want your customers to have to get on a phone call or start an email conversation to get the answers they’re looking for. Use Engati Live Chat to let your customers converse with your agents and have their questions answered over the same platform.

A Forrester study has shown that 44% of online shoppers believe that live chat is the best feature that an eCommerce website could have.‍

2. Have a better return policy

And if you’re afraid that such a return policy would cause customers to purchase your offerings, use them once and return them, thus making you actually lose money on shipping, you don’t need to worry about that.

What actually tends to happen is that such a policy would cause your customers to make more purchases, thinking that they can return them if they don’t like them. But, now the Endowment Effect kicks in, making them value these products more because they belong to them. The result? They just don’t end up returning their purchases. A more lenient return policy could thus help you increase your sales as well as your customer retention.‍

3. Use Shopify Analytics

It could help you understand your customers’ interests and offer products that match what they are looking for, thus keeping them coming back for more.‍

4. Personalize product recommendations

You could even set up product recommendations that are based on how they have historically browsed through your store. Using personalized recommendations makes life easier for your customers and shows that you have what they need, so they won’t need to look in other places and they’ll keep coming back to your store.

5. Engage your customers in their language

Deploying an Engati chatbot on your Shopify store allows you to engage your customers across multiple regions in 50+ languages, helping you make all your customers feel comfortable doing business with you and more inclined to stay loyal.

6. Leverage customer accounts

Creating an account would certainly make the buying process much easier for your customers, but you might not want to force customers to make one, that could just be annoying and cause new customers to abandon purchases.

You want to offer guest checkout options but still incentivize customers to create accounts on your store.‍

7. Create a loyalty program

You can find apps to build loyalty programs on the Shopify App Store, and you can even use your Engati chatbot to run your loyalty program.‍

8. Allow customers to subscribe to products

Allow them to subscribe to those products and give them a discount for doing that. This enables you to earn recurring revenue and eliminates the effort your customers have to make to reorder, along with the chance of them selecting a competitor.‍

9. Create a feedback loop

Requesting a review is very effective because when they do leave a positive review they are essentially getting conditioned to think positively about your store. Thinking negatively would create dissonance in their mind and it just wouldn’t feel right. They’ll essentially be justifying the act of leaving a positive review by telling themselves that they do like your store and your offerings.‍

10. Go omnichannel

11. Wish them on occasions

Even if you don’t have that information, you could still wish them on festive occasions and send them gift cards or gifts, thus making them feel better about you.‍

12. Improve your user experience

When you design your Shopify store, make sure not to stray too far away from the commonly accepted web conventions, doing that could make your website feel less intuitive. If certain buttons and other features are not where your customers would intuitively expect them to be, your customers might get confused and frustrated. You don’t want that to happen.

Another way to improve your user experience is to deploy an Engati chatbot on your Shopify store so that your customers don’t have to hunt through your entire website to find the information they need. They can get all the information they’re looking for — from other details to store policies — in one place, by simply asking a question.

This article about “How to retain customers on your Shopify store” was originally published in Engati blogs.

Do check out some of these articles.

Customer Touchpoint
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Agent Interaction
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