Returning customers are valuable. But are they a priority for eCommerce companies?
To find out, we surveyed more than 450 eCommerce professionals from the Global eCommerce community who shared their experience in retaining customers by answering 15 questions on Customer Retention.
The objective is to understand how important Customer Retention is in eCommerce, so, we collected insights from a wide range of industries and eCommerce companies with annual revenue ranging from >$1M to <$500M.
82% of the total face high and brutal competition in their industries;
Only 34% of the total monitor their Customer Retention Rate;
Less than 20% dedicate resources (budget and human resources) to Customer Retention;
30% don’t know their retention rate and 42% are satisfied with their current retention rate
NPS, Customer Lifetime Value and Customer Retention Rate are among the least monitored KPIs;
What is your current job role?
eCommerce professionals took the Customer Retention study.
They are either working for eCommerce companies or working for agencies having eCommerce clients.
What is your industry?
of the total come from Fashion, Beauty and Bridal industry.
Food, Logistics, Transportation, Retail and Furniture. There's an interesting rise of new verticals in eCommerce.
How competitive is your industry?
of the total mentioned facing high and brutal competition in their industries.
This opinion is consistent across all eCommerce professionals and all industries surveyed.
Which of these options best describe
your annual revenue?
of the professionals surveyed work for eCommerce companies with less than $10M in annual revenue.
Revenue size proved to be a key indicator of whether a company focuses on retention or not.
Annual revenue and its impact on Customer
The higher the revenue, the higher
the focus on retention
More than 50% of the companies with annual revenue of at least 11M$ either dedicate budget to retention or include retention in their marketing budgets. The highest percentage of companies which dedicate budget is within the 51M - 100M $ segment.
Companies with >1M$ in annual revenue are the least to dedicate budget to retention. These are also mainly focusing on customer acquisition.
How much of the total budget do you
allocate for marketing?
spend between 5% and 20% of their total budget on marketing activities.
With so many eCommerce players fighting for customer attention, winning companies will need to start investing marketing dollars into existing customers for an increased ROI.
“ Precision marketing is the ability of marketers to hyper-target prospects based on their behaviors, their desires, and their previous purchases.
A full-on precision marketing campaign uses information about previous purchases to hyper-targeted ads to individuals and then allows you to calculate a return-on-investment on an ad-by-ad basis.”
Jamie Turner, Internationally recognized author, speaker, and CEO
of the total still allocate most budget, at least 70% towards customer acquisition.
There is still a big focus on customer acquisition rather than optimizing the relationship with the existing customers.
“Increased competition for ad spend will cause record ad prices. Winning retailers will invest in selling to existing customers for two reasons: 1. to increase Customer Lifetime Value (CLV) in order to justify spending so much in ad prices. 2. to increase sales.”