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Why you should be focusing on retention in 2021 and how to do it

Customer acquisition is more expensive than customer retention. According to OutboundEngine, retention is five times cheaper than acquisition , you’re more likely to successfully sell to an existing customer than a new one, and boosting your retention by as little as 5% can increase profits 25% to a whopping 95%.

All of this points to some simple business math. Knowing how to retain a customer is better for your business, your time, and your bottom line. In this blog, we’ll go over the basics of customer retention and how to prioritize it.

The importance of customer retention

Customer retention is the practice of encouraging existing customers to buy from you again in the future, at regular intervals. Depending on the products you sell, this could be monthly, quarterly, or even annually. 

The primary benefits of customer retention are:

  • More sales: more people buying your products and spending more each time they do. 

  • Easier sales: selling to customers who already know and trust your brand and have a customer account. 

  • Cheaper sales: removing the high customer acquisition costs at the beginning of a customer relationship makes it five times less expensive than acquiring customers. 

  • Referred sales: creating a loyal customer base who are more likely to refer your business and recommend your products. 

And customer retention is even more critical this year. 

Why focus on retention in 2021

Experts say the eCommerce industry advanced between 4-6 years because of COVID-19. This has some exciting implications for customer retention. 

Growth in online sellers

First, the eCommerce space has become increasingly noisy. There are now an estimated 1.8 million online sellers in the US alone (three times the Luxembourg population size). Finding a reputable brand is becoming increasingly time consuming, which is why many shoppers prefer finding and sticking to one. 

Rising customer expectations

Customer expectations, especially those beyond the buy button, are rising alongside the growth in eCommerce sellers. Online shoppers have a vast choice of brands to shop from and want to shop with those who most appreciate their custom - giving you an opportunity to dazzle.

Marketplace dominance

More than half of consumers start their online shopping search on Amazon — it’s become an automatic habit. Focusing on customer retention helps shoppers break that habit and shop directly with your brand. 

Continued uncertainty

The world certainly isn’t out of the woods yet with COVID-19. Disposable income decreased $911.1 billion in the USA last year, meaning people are spending less money online and are more cautious when they do. When someone opens their wallet, you want to make it with you — helping you increase business resilience at the same time. 

Interestingly, these factors have already increased brand loyalty, with 28.3% of people becoming more loyal to brands during COVID-19. Now is definitely the time to polish your customer retention strategies. 

How to increase customer retention in 2021

We understand budgets might be a little tighter this year, which is why we’ve narrowed down the four most cost-effective, actionable, and successful customer retention tactics for 2021. 

1. Optimize your remarketing campaigns

If you use post-purchase remarketing campaigns to target customers with ads across Google, Facebook, and Instagram following a purchase, it’s time to make them even more relevant to your customers. 

Use your remarketing ads to showcase the benefits of returning to your store, including:

  • New and relevant products
  • User-generated content and product reviews
  • Dynamic fast shipping tags. 

As you can see, Hey Dude Shoes has done this on their Facebook ads, by adding “next-day delivery” tags based on real-time inventory: 


Tip: don’t forget to highlight these benefits in your email and social media content campaigns, too. 

2. Offer customers 2-day and next-day shipping

Speaking of fast shipping, research shows customers care more about just discount coupons when becoming part of a VIP reward or loyalty program. Especially when you offer the same, similar, or better discounts to new customers. 

Spice up your loyalty program with rewards that matter, such as:

  • Free 2-day and next-day delivery depending on the customer location
  • Early access to sales and new products and special events
  • Referral discounts for family and friends. 

Here, you can see what Beauty Insider has done with its tiered loyalty program, and how it offers more than just discounts:


3. Create a Facebook Group community

Customers love being part of a community, with 49% of communities generating revenue. 

Online communities allow customers to connect with like-minded people, talk about your products, ask for recommendations, and provide their own feedback. It makes them feel part of a family, which naturally fosters loyalty. 

And, when you create a closed Facebook group, you add an element of exclusivity that drives FOMO (fear of missing out), making people want to be a part of your community and a repeat customer of your brand. 

For example, sportswear brand GymShark has a thriving Facebook community where members share sports achievements, progression pictures, and motivational stories, as well as talking about GymShark’s products. 


4. Be vocal about your values

A massive 84.3% of people are more likely to be loyal to a brand whose values align with their own. This means you should start investing in and shouting about the causes that matter to you and are relevant to your customers. 

For example, pet food store Edgard & Cooper do this brilliantly - donating 1% of their sales to a stray dog clinic in Sri Lanka. 


This cause immediately resonates with their customer base and gives them an additional reason to buy from them again in the future. 

Other values you can promote include:

  • Sustainability by using eco-friendly packaging
  • Your local community by donating volunteer time or products
  • Sponsorships with charities and appeals. 

Whatever cause you support, make sure your customers know exactly how their purchases go towards helping that cause by promoting it on your website and marketing materials. 

Wrapping up

2021 is the year where you can really encourage and benefit from customer loyalty - all you need to do is think about things a little differently. 

Forget the bog-standard discount coupon and quarterly newsletter - spice things up with unique rewards, 2-day and next-day shipping, tailored ads, a supportive community, and great values. When you really resonate with, excite, and delight your customers, they won’t hesitate to return. 

About the Author

This is a guest post from Rachel Go , senior content marketing manager at Deliverr. Deliverr provides fast and affordable fulfillment for your Shopify, Walmart, Amazon, eBay, Wish, and BigCommerce stores, helping to boost sales through programs like 2-day delivery for Shopify , Walmart 2-day delivery , eBay Fast ‘N Free , and Wish 2-day .

Deliverr’s FBA-like multi-channel fulfillment comes with clear pricing, easy onboarding and a hassle free experience so you can focus on growing your eCommerce business.