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How to Improve Shopify Customer Retention over Xmas & BFCM

The time to boost your sales is literally now. One week away from Black Friday, every e-commerce business owner is more than prepared for the busy...

How to Improve Shopify Customer Retention over Xmas & BFCM

The perfect time to improve your customer retention is right now, but you need the right strategy.

With so many customers looking for deals, it can be challenging to keep them returning to your store - and getting new customers is incredibly expensive. Customer acquisition costs have risen 60% over the past five years.

So, we know retaining a customer is cheaper than acquiring one, but how do you retain more customers over the festive period?

In this article, we're going to cover:

  • 4 tips to improve your customer retention rates
  • How to measure the effectiveness of your customer retention strategy
  • FAQs about customer retention

Tips for Improving Customer Retention on Shopify

4 tips to improve your Xmas & Shopify Black Friday Cyber Monday retention rates

Often improving your customer retention rates simply comes down to improving your customer experience.

The better your customers feel about interacting with (and purchasing from) your brand, the more likely they are to return.

Here are 4 ways you can improve your customer experience to boost your customer retention rates:

1. Offer discounts and coupons

Your profit margin may already be too skinny to adapt to the new economic circumstances.

However, it's no secret that one of the best ways to keep your customers returning is to offer them discounts and coupons. As many products will be included in your BFCM sale, one good option is to send a code for an item that is not currently on discount or to use after Black Friday ends. Use FOMO and create the sense of urgency, making the deal available until the last day you ship before Christmas. That way, you can enter the new year with a lighter inventory.

You can distribute coupons via push notifications, email marketing campaigns, and SMS. Inserting a thank you note in the parcel box with a discount code also works!

Just be sure to make the offers compelling enough that your customers will want to take advantage of them.

2. Foster relationships

It's essential to build relationships with your customers, so they feel like they're more than just a transaction to you.

It can be difficult to achieve that when working with e-commerce, but sending small gifts and samples, offering customer loyalty programs, or simply taking the time to chat with them online will turn customers into true brand ambassadors.

The small gifts can be holiday-themed. For example, if you sell jewellery, you could include festive holiday earrings with each order. Or, if you sell skincare products, you could include a small tube of hand cream decorated with a snowman or Santa.

Small gestures can go a long way in making your customers feel valued.

3. Provide excellent customer service

This one should go without saying, but providing excellent customer service is essential for retention (and acquisition).

During the holiday season, people are dealing with increased stress levels and may be more likely to lash out if things don't go smoothly. Prepare for any hiccups that may happen, like shipping delays or complaints on social media.

It's important to be extra patient and understanding with your customers. If you go above and beyond to help them, they'll be more likely to remember you positively and come back in the future.

Check out our 14 best practices for improving your customer service.

4. Be responsive

In today's age of instant gratification, customers expect quick responses to their questions and problems. If you're unable to meet their expectations, they'll quickly move on to a brand that can.

So make sure you're monitoring your channels (email, social media, live chat, etc.) and responding as quickly as possible.

How to measure the effectiveness of your customer retention strategy

How to measure the effectiveness of your customer retention strategy

Once you've implemented your customer retention strategy for the holiday season, measuring its effectiveness is essential.

Some will take longer to analyse, like the churn rate, which is the percentage of customers who stop doing business with you over a certain period of time.

Time-bound discount codes, on the other hand, are great for checking how efficient your marketing campaign has been. For instance, 

  • You can understand if the message did go through to your customer. You must look at open and click-through rates for any marketing channel you use (push notifications, SMS, email marketing). What are the best-performing ones? Can you put your efforts into that ones? Are they cost-effective?
  • You can also see if they were fruitful. Have the customers come back to make further purchases? This is the repeat purchase rate: how often customers come back and make another purchase from you. If this number increases, your retention efforts are paying off.

If it did work, that's something to repeat where possible.

Customer retention on shopify ‍Final Thoughts‍

Final thoughts

The holiday season is a busy time for everyone.

Your customers are also dealing with the cost of living crisis, and they're putting a lot of thought into every purchase choice they're making now. If they chose your brand amongst thousands of others, they're trusting you to make their season sparkle. Enjoy this fantastic opportunity to show your customers how much you appreciate their business.

Throughout the year, customer acquisition and retention are always part of any e-commerce marketing strategy. Depending on your industry, each season brings a new chance to test new products and marketing campaigns. During the last quarter, people are keen to spend a little more but also expect the cheerfulness of the season to be a part of the experience, and your campaign must bring that warmth into play.

Retention Rate FAQ

What is retention rate?

Retention rate measures the percentage of users who continue using your product or service over a given time period.

For example, if you had 100 customers at the start of January and 50 customers at the start of June, your retention rate for that period would be 50%.

What is a good customer retention rate on Shopify?

A good retention rate depends on your industry.

Here are the average retention rates broken down by industry from highest to lowest:

  • Media companies: 84%
  • Professional services: 84%
  • Automotive and transportation: 83%
  • Insurance: 83%
  • IT services: 81%
  • Construction and engineering: 80%
  • Financial services: 78%
  • Telecom industry: 78%
  • Healthcare: 77%
  • IT and software industry: 77%
  • Banking: 75%
  • Consumer services: 67%
  • Manufacturing: 67%
  • Retail: 63%
  • Hospitality, travel, and restaurant: 55%

What impacts customer retention rate on Shopify?

Here are the main factors that influence customer retention rates on Shopify:

  • Customer experience
  • Customer satisfaction
  • Brand & product diversity (how different you and your products are from competitors)
  • Pricing
  • Trust & credibility
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