What is Retention Marketing?

Retention marketing is a form of marketing that focuses on maintaining customer loyalty using retention tactics and strategies. The primary goal of retention marketing is to increase repeat purchases from existing customers and encourage them to invest in your business. 

This type of marketing is especially effective for the e-commerce industry. Brands don’t have to constantly rely on forming new relationships and can make their business sustainable by nurturing and growing existing relationships.

What is the importance of Retention Marketing in E-commerce?

While customer acquisition is important to expand a brand’s customer base across industries, retention marketing is important for e-commerce businesses to drive maximum returns from an already established customer base. 

Here are a few factors how retention marketing is significant in e-commerce

1. Retention Marketing Enables Growth

Retention marketing improves the chances of more rapid growth for your e-commerce as it focuses on maintaining relations with already existing customers.

2. Reduces the Churn Rate

Churn, or the loss of customers, is a common challenge in the e-commerce industry. Retention marketing reduces churn by keeping customers engaged, and connected to the brand.

3. Helps Businesses Find Their Target Audience

The success of a retention marketing tactic also signifies that the brand’s retained customers are the target consumers. This is another reason why retention marketing is essential in e-commerce.

4. Helps Improve Business Model

Engaged customers are more likely to provide feedback and suggestions for improvement. This valuable input can help businesses enhance their products and make them more appealing to both existing and potential customers.

Why E-commerce Businesses Should Prioritize Customer Retention

Prioritizing customer retention is essential for the success and sustainability of e-commerce businesses for several compelling reasons:

1. Reduces Cost To Maintain Customers

Acquiring new customers can be more expensive than retaining existing ones. Retention marketing strategies, such as loyalty offers and coupons, are often more cost-effective than constantly attracting new customers.

2. Increases Average Order Value

When customers have already shopped from a brand before, they feel a sense of trust and don’t mind placing bigger orders with the brand. This can improve the average order value and result in improved sales.

3. Improves Brand Reputation

For any brand, a repeat customer means a satisfied customer. When customers feel happy with their purchase with a brand, they are more likely to return to the brand, improving its reputation.

4. Induces Positive Word-of-Mouth Marketing

Satisfied and loyal customers are more likely to recommend a brand to others. Positive word-of-mouth marketing generated by happy customers can lead to organic growth and attract new customers.

What are the Strategies for Retention Marketing?

Retention marketing involves various strategies to keep existing customers engaged and satisfied. 

Here are some effective strategies:

1. Email Marketing

Email marketing is one of the most effective strategies to retain customers. Regularly communicating with customers through personalized and targeted shoppable email campaigns, sharing relevant updates, and exclusive offers can help is a great way to encourage repeat purchases.

2. Loyalty Programmes

Another effective strategy to retain customers is through hosting loyalty programs. Implementing loyalty programs that reward customers with incentives like points, discounts, or exclusive perks can encourage customers to repeat purchases.

3. Social Campaigns

Running campaigns to re-engage customers who have become less active or haven’t purchased in a while is a great retention marketing strategy. By offering incentives in return for customer participation, e-commerce businesses can foster repeat purchases.

4. Offers & Incentives

Providing special discounts, early access to sales, or exclusive promotions to reward and retain loyal customers is a great retention marketing strategy.

What Is Customer Retention Rate & How To Measure It?

By definition, customer retention rate, or CRR, is a key metric that helps businesses measure the percentage of retained customers over a specific period. It shows the business’s customers who have remained loyal to the company within a specific time frame. 

It can be easily measured using a simple formula:

CRR = (Number of customers at the end of the period) – (Number of new customers acquired) / Number of customers at the start of the period. 

But before you can measure the customer retention rate successfully, a few things to keep in mind:

  1. Have a clear insight into the number of customers your company started with, to what it has now. 
  2. Have a confident number of newly acquired customers to get the most accurate retention rate. 
  3. Know the time period for which you want to calculate the Customer Retention Rate. This could be a month, quarter, or a year.


In conclusion, prioritizing customer retention is a necessity for e-commerce businesses that actually want to scale their business to newer heights. This marketing tactic is not just a ‘good-to-have’ strategy but a must-need strategy that every brand requires. 

This emphasis on customer retention shows that the brand recognizes the value of maintaining long-term relationships with its existing audience and maintaining a loyal customer base for sustained success in the e-commerce market.