3 Shopify Strategies That Build Customer Loyalty
Looking for long-term revenue? Lock in long-term customers.
How do you lock in long-term customers?
Build customer loyalty.
The DTC world loves the next new thing—with one exception. Old customers come with benefits that outweigh new ones (well, the cost of acquiring new ones). This isn’t news. Finding new customers is more expensive than turning current customers into repeat buyers.
So how can you grow your business without overspending on customer acquisition? Sell more to the customers you already have.
Ever wish your business had a crystal ball to predict the future? Data collected by Forbes says, 80% of your future revenue comes from 20% of current customers. Building loyalty is the key to longevity.
Read on and learn:
- Why repeat customers are essential to long-term growth
- 3 Shopify strategies for building customer loyalty
- 4 ways to measure customer loyalty
Why Repeat Customers Are Essential to Long-Term Growth
Acquiring new customers is pricey and almost five times more expensive than retaining an existing customer.
According to Shopify’s 2022 Future of Commerce report, customer acquisition is the top challenge e-commerce companies face today. Why? Increased DTC competition and advertising costs.
Platforms like Shopify have pretty much dropped the e-commerce world’s barrier to entry. Anyone with an idea and an internet connection can open an online store, build a brand, and become your competition. With the right Shopify apps, a solo-preneur can build a tech stack that rivals their multi-million dollar competitors.
Competition’s on the rise, while ROAS is on the decline. Plus, the Apple iOS 14 release, has made it more difficult to track results in ad spend. Consumers are getting better at blocking ads, and privacy laws are limiting marketers’ ability to target.
If digital ad costs are eating up your marketing budget, and you’re having a harder time getting a decent return on ad spend, you’re not alone.
With today’s landscape making it difficult to get new customers’ attention, a giant opportunity lies in retention.
3 Shopify Strategies that Build Customer Loyalty
What’s your business’s customer retention rate? That number gives a solid pulse check on the health of your brand. A high retention rate signals high quality products and services, a solid marketing strategy, and confirms that you’re targeting the right customers. High retention will also lead to recurring revenue and higher AOVs.
Need a benchmark? Increasing your Shopify customer retention rate by 5% can increase your profits by 25% to 95%. Here are three strategies to help your brand level up:
1. Encourage Repeat Orders and Offer Subscriptions
Let’s say you make a new friend, and they immediately ask you to join their club. Tough sell, right? You’d probably want to hang out a few times, before making the long term commitment.
I have a similar perspective on subscriptions—you probably want your customer to get to know your brand, and experience your product before committing to a subscription.
One “light touch” way to secure a repeat customer? Encourage them to simply repeat their order.
After a customer’s first purchase, it’s all about convenience. They’ve already researched and picked their product—it’s up to your brand to save their order and personalize a repeat order experience.
Service providers like Repeat make it easy for customers to simply buy again. Order reminders can be sent via email or SMS to customers when they’re most likely to be running low—with a one-click reordering experience. It’s an ideal solution for customers who aren’t ready to subscribe, but don’t want to run out.
You could also include a scan-to-reorder QR code on your packaging and direct mail, and into shipments as inserts. Customers can scan and reorder in seconds—without downloading a new app or creating an account.
Bonus? Scan-to-reorder QR codes are rich with data! You’ll get product-level insights and repeat purchase behavior, so you can make better decisions on how to build your marketing campaigns in the future.
Ready to pull the next growth lever? Once you’ve secured a repeat customer, offering a subscription can be a power source of locking recurring revenue and loyalty.
There’s a subscription for everything. Probiotic soda, supplements, razors—even NPR has a coffee club. Thanks to service providers like Recharge and Smartrr, subscriptions are super easy for brands to manage.
Smartrr’s focus on agility gives brands flexibility to change their offering based on their customer’s actions. Not all hero products make effective subscription offerings! Significant drops in retention can be attributed to a specific product release. You, the merchant, choose to re-engage the customer, or update the offering.
Many DTC brands explore subscriptions with a focus on CAC and conversions—while subscriptions can improve both, LTV can be a more impactful metric to hone in on.
2. Prioritize Engagement and Customer Service
Poor customer service? 33% of customers will consider switching brands after one negative experience.
Top-notch engagements motivate customers to promote their favorite brands online. Try taking a proactive approach to customer service to strengthen your relationships.
- Ask your customers for feedback
- Admit to mistakes
- Create content that answers common questions
- Add live chat to your store (questions quickly turn into sales, and complaints into resolutions!)
- Listen to what customers say about your brand online
3. Invest in Building Community
Strong brand communities don’t just appear. You have to play a long game to feel the impact.
The co-founders of good-for-you ramen brand, immi, built a community of thousands before launching—and are quick to point out that building community isn’t just about amassing a giant list of email addresses.
“A true community is very different from an audience in that community members are engaged with each other. It’s not just a one-way relationship or even a two-way relationship between the brand and the audience. It’s a three-way relationship where it’s brand, audience, and then the audience speaking to other members of the audience,” says immi co-founder Kevin Lee.
7 Tips for Building Brand Community
- Pick a space where your community will primarily live.This is your content hub. For immi, Facebook was homebase. “Once we figured that out, we would take people on our email list and we had a drip sequence and all the calls to action were to join our Facebook group,” says Lee
- Build in public. Share BTS details with your community and give insight into your process
- Use all of your marketing channels to drive your audience to community pages
- Start conversations, and let the community take over the dialogue
- Ask for feedback. Use polls, focus groups, 1:1’s, and observe conversations
- Encourage (and amplify) user generated content
- Be authentic and responsive
How to Measure Customer Loyalty
Can we agree on the importance of customer loyalty and retention? Excellent! As you implement the strategies above, be prepared to measure your impact.
There are a few key data points that reflect the overall health of customer retention.
Did the mention of “data” make you squirm? Getting a good look at your Shopify business’ data is tricky—but essential to scaling and making smart decisions.
For a customized look into your business data, try Tydo, a free app for Shopify stores. Tydo consolidates all of your key metrics, across platforms, for an at-a-glance pulse of your business health..
How many apps are in your tech stack? In 2021, a typical mid-market company had 185 different apps in their stack! Tydo consolidates your data, across integrations—giving a single view of data collected by sources like Google Ads, Facebook Ads, Shopify, Snapchat, TikTok and Google Analytics.
Once you have a handle on your data, monitor the 7 metrics below to measure customer loyalty.
- Net Sales
- Returning Customer Sales
- Total Orders
- Returning Customer Orders
- Repeat Purchase Rate
- Net AOV
- Returning Customer AOV
Hot tip? Sign up for Tydo’s free Email Reports, and get daily summary metrics delivered to your inbox.
Repeat customers keep DTC businesses alive and thriving! Lock in customer loyalty early, and secure your brand’s longevity.
About the author: Kate calls Philadelphia home and has a passion for building educational marketing content for DTC brands and relationships with Shopify partners. She currently works at Tydo, a Shopify app that connects your brand’s data, marketing sources and tools to solve your biggest problems and uncover your biggest opportunities.