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Loyalty Lion9/6/20194 min read

3 Ways to Leverage Customer Retention to Grow Your eCommerce Brand

The ecommerce market is competitive and growing rapidly – by 13% every year, in fact. With incredibly quick delivery, one-click shopping and free returns offered by corporations such as ASOS and Amazon, it can feel overwhelming to try and compete. Amazon actually accounts for 43% of all online sales – a huge amount of the market share.

Simultaneously, customers have become increasingly savvy and marketing literate. They are now unaffected by acquisition tactics more than ever, with only 4% of digital ads being viewed for more than two seconds.

With that in mind, it’s hugely important for merchants to look at innovative ways to retain customers – and harnessing a loyalty program is a great place to start.

53% of a store’s revenue comes from the top 20% of their customer base. Your existing customers spend more as they are already loyal and have a high lifetime value – they trust your brand over the competition and will tell others all about you as a result.

This blog post will cover how customer retention tactics can drive up your revenue, help you to differentiate yourself from the competition and acquire new customers.

How retention benefits revenue

When we think about growing a business, we often think about acquiring new customers. But increasing customer retention by just 2% can have the same impact as reducing costs by 10%. It’s not always about bringing in new people but instead deeply satisfying the ones you already have so that they remain loyal to you.

Start a loyalty program to give your existing customers ample reasons to return and engage with your brand. Through this framework, you can reward customers for behaviours you want to encourage such as completing purchases, leaving product reviews or engaging with your brand on social media.

This on-going engagement increases a customer’s lifetime value by keeping your business at the forefront of their mind. Loyalty program members spend 2.5 more than non-members.

Loyalty programs also give your customers reasons to spend more. Loyalty tiers push customers up a funnel which encourages them to add more to their basket and redeem more points to unlock greater benefits. In fact, customers that use a loyalty reward when purchasing have a 39% higher basket size.


Differentiate yourself using loyalty

Elevating the customer experience using a loyalty program is an important way to increase retention. Regularly surprising and delighting your loyal customers is a surefire way to keep them engaged. 

86% of buyers are willing to pay more for improved customer experiences. If you value your customers on a personal level – instead of treating them as a number – a loyalty program allows you to show that you care. To stand out from your competitors, use your loyalty program as a way to shout about your brand and values. For instance, loyalty-focused emails allow you to communicate your brand values with your customers, directly into their inbox.

This is something Annmarie Skin Care has done perfectly, in the way they talk about their values and the language they use to communicate with their customers.

A loyalty program allows you to reward customers with VIP and experiential perks that make them feel special. Vintage clothing retailer Beyond Retro gives loyal customers exclusive early access to sales as a way of making their loyalty members feel valued and special.

How retention helps you to acquire new customers

Making your existing customers feel special is also an effective way to acquire new customers more cost-effectively. Your existing customers are likely to tell others if they had a positive experience with your brand.

With customers being four times more likely to buy when referred by friends or family, it’s important to encourage your most valuable, loyal customers to act as advocates on your behalf.

A loyalty program can also be used to reward your existing customers for referring friends to your store.

For example, fashion brand Taylor Stitch makes referrals the primary action customers can take through their loyalty program. The referee gets $20 in store credit once the new customer they referred makes a purchase.


They also communicate the benefits of referring individuals clearly to their customers, which makes the process as easy as possible. They have incorporated a one-click copy button that allows customers to share their own unique URL wherever they choose.

Taylor Stitch has attributed almost $90,000 in additional revenue to their referral strategy – as a result of 400 new customers joining their program.


In an ecommerce market that’s competitive and difficult to navigate – investing in customer retention and loyalty could be the key to long-term success and growth.

If you want to learn more about the importance of customer retention, check our guide filled with all the information you need to know.



Loyalty Lion

LoyaltyLion is a data-driven loyalty and engagement platform trusted by thousands of ecommerce brands worldwide. Merchants use LoyaltyLion when they want a fully customised loyalty program that is proven to increase customer engagement, retention and spend. Stores using LoyaltyLion typically generate at least $15 for every $1 they spend on the platform.