The time which businesses on Shopify focus on customer retention or acquisition is very important. The effectiveness is heavily influenced by where your store is in its lifecycle. Thus, a brand starting yesterday is vastly different from the shop having been up and running for many years.
See the timeline below to know the general guidance on your store’s potential investment levels.
The most important thing which you should be focused on when starting your store is getting as many customers as possible. At this time your acquisition efforts can completely increase the retention. You can grow your customer base by focusing on strategies and tactics.
At this stage, you have many clients and you are getting sporadic sales. In this point, you can start giving the strategy for retention elements to encourage each client to buy more. I suggest you should start with retention email campaigns. This focus on encouraging a past customer to purchase from you another time.
The sales are growing but you aren’t quite an e-commerce juggernaut. In this time, you should start to think about mixing in more retention with your acquisition efforts. It’s a good idea to start a loyalty and/or a referral program as well as develop marketing automation.
How you maximize the profitability of each customer is the main way for retention strategy.
You are now an established e-commerce store. Finding ways to continue to grow is the common problem for retailers of this size. The acquisition may be leading to a lot of one time purchases, but a retention strategy can get customers to buy more often which increases their lifetime value. In this time, you need to be deliberate and serious about your retention efforts.
At this stage, you achieve many early successes and you may have a lot of processes and automation in place. It’s time for business to focus heavily on retention.
For example in the following line graph, each store has 100 customers buying a $10 item each month. The dark purple is retaining 10%, the light purple store is retaining 5% of those customers each month. It is clear that the 5% increase can lead to rapid growth that is difficult to match with the straight acquisition.
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