6 Ways For Increasing Customer Retention on Shopify

Sourabh Upreti
Sourabh Upreti
March 17, 2023

Are you tired of feeling your customers slipping through your fingers like a soap bar in the shower? 

Well, fear not because we've got the inside scoop on how to keep those customers coming back for more.

That's right; we're talking about retention marketing tactics for Shopify - the secret sauce that will turn those one-time buyers into lifelong fans. But let's face it; retention marketing can be confusing.

There are many ways to go about it, and the tactics that work for one business might not work for yours. So, we've compiled a list of the six proven strategies and tactics for increasing customer retention on Shopify - from WhatsApp marketing to loyalty programs.

Let's start from the basics. 

What is Customer Retention?

Customer retention is the process of keeping your customers happy, so they continue to buy from you again and again. It’s one of the most important aspects of any business because when customers stick with you, it means they like what you offer and aren’t interested in shopping elsewhere (a dream stage for a Shopify owner, isn't it?).

Customer retention is a win-win situation for both you and your customers. You get more sales, and they receive better service. When done right, you can make more from your existing customers and increase your sales without spending money on expensive marketing campaigns.

Why Should You Focus on Increasing your Customer Retention?

According to Thinkimpact, you can increase revenue by as much as 80%+, reduce costs by 30%, and boost total customers 1.5x over 18-24 months simply by focusing on customer retention rather than acquisition. Isn't that amazing?

But that’s not the only thing. Here are the reasons why you should focus on increasing your customer retention:

1. Create ambassadors

Who do you trust the most when purchasing a new product? Is your friend or a new brand that shows repeated ads on your feed?

The answer is obvious, right? You trust your friend more. Because they have a real relationship with you, they know more about what works and what doesn’t. Your customers are the same—they will be more likely to go out of their way to recommend your brand if they feel it meets their needs. 


In fact, 92% of people trust word of mouth more than any other marketing strategy.

So why not leverage the same?

When you provide a better experience for your customer, they will be more likely to recommend you to their friends and family. This creates a positive feedback loop that will help your business grow.

2. Boosts revenue

Once you gain the trust and loyalty of your customers, they will be more likely to buy from you. This happens because they feel their needs are met and they have a real relationship with you.

In fact, the most famous Pareto principle, also known as the 80–20 rule, states that 20% of customers generate 80% of a company's revenue. It means, when you have a 20% loyal customer base, they will bring 80% of your revenue. 

Let's do a quick math to understand this better,

For example, let's say you have 100 customers and 20 super-loyal customers who buy from you regularly. If the average revenue per customer is $100, then those 20 customers will generate $4,000 in revenue for you each month.

On the other hand, the remaining 80 one-time buyers will generate only $800. So the Pareto principle states that 20% of your customers will generate 80% of your revenue.

So if you can retain customers or make them repeat buyers, your chances at increased revenue are greater.

3. Prevents you from spending $$$ on your marketing campaigns

Did you know that acquiring a new customer is 5X more expensive than retaining an existing customer? This means that if you can retain your customers, you can spend less on marketing and still generate the same amount of revenue.

This is because you already have customers who are familiar with your brand and trust your products. This is especially important when it comes to D2C businesses. You don’t want to spend thousands of dollars on marketing campaigns only for them not to work out.

4. Gives you an edge over your competitors

Here comes the sweet spot, when you’re able to retain your customers, it gives them a reason to come back and purchase from you again. This will result in more sales as opposed to spending on marketing campaigns that might not work out.

Moreover, as your brand is the first name when your loyal customers think of purchasing, you can gain an edge over your competitors. And in the long run, you’ll be able to build strong brand loyalty that will help you grow your business faster.

What Customer Retention Metrics Should You Check?

Customer retention metrics are a great way to know whether you’re doing well. Here are some important metrics that will help you measure the success of your customer retention strategies:

1. Average order value (AOV)

This AOV measures the average amount you receive from customers on each sale. It’s calculated by dividing your total revenue by the number of orders. And it’s a good metric to check if you want to know your customers' loyalty.

A high AOV indicates that your customers are buying from you and spending more money on each purchase. This means they’re getting more value out of your brand than other competitors.

AOV = Total revenue earned/number of orders placed.

2. Customer lifetime value (LTV)

Your customer lifetime value is the total revenue your customers will generate during their entire relationship with you. It’s calculated by multiplying the average order value (AOV) by the number of times they purchase (customer retention rate).

The resulting number gives you an idea of how much money each customer could generate for your business over time.

LTV = AOV x number of purchases.

3. Repeat purchase rate (RPR)

The repeat purchase rate is the percentage of customers who make a second purchase from you. It’s calculated by dividing the number of customers who make two or more purchases by the total number of customers who’ve made at least one purchase.

When they make more than a couple of purchases, they are loyal customers likely to continue buying from you.

RPR = (number of customers who make 2 or more purchases) / (total number of customers).

4. Customer retention rate (CRR)

The customer retention rate is the percentage of customers a company has retained over time. The higher this number, the better off you are, as it means that more people come back to your business again and again.

Customer retention rate = ((End number of customers - New customers gained) / Starting number of customers) x 100

You can calculate this by looking at how many customers you gained over a certain period and subtracting the number of customers left. If you calculate your customer retention rate every month, then each month will be considered one unit of time.

If the number is increasing, it shows that your business is doing something right and customers are coming back to purchase from you again and again.  

5. Customer churn rate

It’s a ratio that tells you how many customers leave your business each month. The churn rate is calculated by dividing the number of customers who left during the period by the total number of customers at the beginning of that period.

This metric can be applied to any business, but it’s especially important for D2C companies because it enables you to determine the overall health of your business. You can use it to identify areas where customers are dropping off and work on improving them.

Customer churn rate = (Total number of customers who left during the period / Total number of customers at the beginning of that period) * 100.

How to Calculate Customer Retention Rate On Shopify?

Here's a step-by-step guide on how to calculate the customer retention rate on Shopify:

Step 1: Log in to your Shopify Admin account.

Step 2: Click on Analytics > Reports from the menu. And select "Create a new report."

Step 3: Then select "Sales over time" and create the report.

Step 4: Now customize the report to show the sales made over the last financial year. For this example, select 2022 (01-01-2022 to 31-12-2022).

Step 5: On the edit columns, tick the Customers and Customer Type variables.

Step 6: Record your "End of period customers (E)" on the top of your table under Customers. This number represents the number of customers you had at the end of the period. For example, if you had 70,000 customers at the end of 2022, record 70,000 as E.

Step 7: Record your "New Customer during the period (N)" on your table under First-time. This number represents the number of customers who made their first purchase during the period. For example, if 45,000 customers made their first purchase in 2022, record 45,000 as N.

Step 8: Finally, all you have to do is to plug those numbers into the formula. It means you have to make the difference between step 8 (E) and step 9 (N) and divide it by step 6 (S), as per the formula. In this case, the formula is (E – N)/S = (70k – 45k) / 40k = 0.625 * 100 = 62.5%. Our CRR is ~63%.

How To Improve Your Customer Retention On Shopify?

Now that you know how to calculate your customer retention rate, it’s time to see what you can do to improve it. Here are some of the most important things you need to know about improving CRR on Shopify:

1. Personalize the customer experience

One of the most important things you can do to improve your customer retention rate is by providing a personalized experience. This means you should give every customer exactly what they want when they want it. It doesn’t mean you must create different products for everyone; instead, focus on creating a better user experience.

Use data from your customers' previous purchases, browsing history, and behavior on your site to personalize their experience. For example, recommend products that are related to their past purchases, send personalized emails, and offer special promotions for loyal customers.

After all, who doesn’t like feeling special?😉

2. Reward users for repeated purchases

I often order too many things from Amazon. Every time I place an order, they knock on my email with a reward. And it pushes me to use that reward with the tag "Expires soon." I use them on my next purchase, and the loop continues.

It is a great strategy, as it incentivizes customers to keep coming back and rewards them for their loyalty. If you’re not already offering rewards, consider adding them to your next campaign. It can be anything from a 5% discount to free shipping.

3. Pay attention to packaging

Packaging is one of the most important aspects of your product, and it can make or break your brand. It’s what consumers see when they first receive their order and how they feel about your company. If you want to impact customers immediately, pay attention to packaging—and think outside the box!

In fact, research suggests that packaging can play a significant role in the overall customer experience and influence how customers perceive and remember a product.

By paying attention to details such as packaging design, materials, and functionality, businesses can create a positive and memorable experience for customers, increasing their likelihood of returning for future purchases.

4. Send personalized abandoned cart messages

Once a customer leaves your website without completing their purchase, you must send them a message that makes them feel special. A personalized message will help your business stand out from the competition and reinforce that you care about each customer.

You can also ask customers why they didn’t complete their purchases and use this information to improve retention.

But it's easier said than done, isn't it? It's a nightmare to personalize things manually and send messages to each user. Here is where BiteSpeed comes in handy. It helps you send a personalized message to each user without having to lift a finger (or even sit down). It asks the reason behind the cart abandonment and provides the solution.

Reduce abandoned carts

And the best thing is it uses WhatsApp, so your users are more likely to open the message and respond. This helps you to provide better customer service and increase your customer's lifetime value.

5. Help customers to choose the best

Your customers will stick to your brand for a long when you help them or provide an excellent customer experience. When they are confused about which product to choose, you must help them. The best way to do this is by providing them with the right information using a chatbot.

You can build a chatbot that offers quick support to help users select the best product. With BiteSpeed, you can create a chatbot to offer product recommendations based on a customer’s interest, purchase history, and more. You can also ask them questions about their needs before recommending them so that you have the right information for your customers.

Here’s how Fitshot helps its users to enquire about their product and helps them to build their cart without leaving WhatsApp, 

The bot is designed to accommodate your brand's personality easily, so shoppers feel like they're being served by a familiar—and helpful—voice. And who will refuse to stick with a brand that offers a better experience and amazing products?

6. Create a loyalty program

Let's be honest, would you refuse a gift? I bet not. And that's why creating a loyalty program for your customers is so important. They will love your brand and keep coming back just to gain more rewards! You can offer them points for every purchase they make and then exchange them for products or discounts in the future.

You can also use a loyalty program to encourage customers to share their opinions about your brand. This way, you'll be able to improve the quality of your products and services over time. And it will make your users stick and work with your brand in the long run.

Best Shopify Apps to Improve Your Customer Retention Rate

Now you know how crucial it is to automate this process. That's why we've compiled a list of the best Shopify apps that will help you improve your customer retention rate. You can use them to automate the process, reduce churn and increase sales. Let's dive in!

1. BiteSpeed

This all-in-one WhatsApp marketing automation tool allows you to create campaigns, send WhatsApp, and track the results. From exit intent pop-ups to collecting reviews, it has everything you need to improve your customer retention rate. A BiteSpeed operates semi-automatedly; you can always stay at the top of your customer's minds.


Plus, BiteSpeed's WhatsApp shop and catalog feature lets you bring your Shopify store on WhatsApp to help your customers choose the best with your chatbot and build their cart without leaving WhatsApp. 

And if you're worried about annoying your customers with too many messages, don't be - BiteSpeed's segmented broadcast messages ensure that you'll only send the right message to the right person at the right time. 

But wait, there's more! With BiteSpeed, you can also collect customer photo reviews directly on WhatsApp. It's also automated, so collecting those reviews is super easy. 

2. Smile

With Smile.io, you can create a customized loyalty program that rewards customers for every action on your website, from purchasing to leaving a review. And the best part? You can set it up in minutes without any coding or design skills required.  


It also has a referral program feature that allows your customers to refer their friends and family to your store, earning rewards for themselves and bringing in new customers. Smile.io's dashboard makes it easy to manage your program, track your rewards, and even send automated emails reminding your customers of their rewards.

Furthermore, you can track your program's performance, see which rewards work and which don't and make data-driven decisions to improve your program. It's like having a loyalty program consultant without an expensive hourly rate. 

3. Reamaze

Reamaze can revolutionize the way you handle customer support for your online store! With this powerful messaging platform, you'll have the tools to tackle even the most complex customer inquiries easily.


Gone are the days of scrambling to respond to customer messages across multiple channels - Reamaze lets you manage all your support conversations in one place. It also features a handy knowledge base that you can use to provide answers to common customer questions.  

By automating your support, you can provide fast responses to your customers and still make time for a cup of coffee. And with integrations for all your favorite tools, from Shopify to Slack to Facebook Messenger, Reamaze is the ultimate all-in-one customer support solution.

Boost Your Customer Retention With The Best Experience

And there you have it. Six ways to keep your customers coming back to your Shopify store. With these tips, you can turn one-time buyers into lifelong fans who will love your brand as they love their grandma's secret recipe.

But let's face it, keeping customers happy can be tough but not impossible. All you need is the right tools and systems to help you out. 

And that's where BiteSpeed comes in. From abandoned cart mails to collecting feedback from your users, you can make them feel special as BiteSpeed always asks your customers about their needs and help them to complete their purchase.

What's even better is that you can use these systems to create a fun, entertaining, and engaging experience for your customers. So what are you waiting for? Schedule a no-string attached demo call with us, and we will make your customers fall in love with your brand; what say?

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