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eCommerce Retention Glossary

Let's get down to the basics.

Retained customer

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Before jumping into the ins and outs of implementing a retention-first mindset, let’s go over the terms and phrases you’ll likely come across.

The Basics

  • Customer retention: The process of retaining customers by providing them with quality products or services, customer service, and other incentives.
  • D2C: Direct-to-Consumer, or a business model where a company sells its products or services directly to consumers without relying on intermediaries such as retailers or wholesalers. The company is responsible for all aspects of the customer experience, including marketing, sales, distribution, and customer service.
  • CRM: Customer Relationship Management is the software or system used to manage customer interactions, data, and relationships.
  • Customer churn: The rate at which customers leave your business or stop doing business with you.
  • NPS: Net Promoter Score is a metric used to measure customer satisfaction and loyalty.
  • Loyalty program: A rewards program that encourages repeat purchases, CLTV, and customers’ emotional connection to your brand.
  • Referral marketing: Encouraging customers to refer others to your business through direct referrals, email & SMS referrals, social media referrals, or reward-based referrals.

Customer Retention Metrics

  • CLTV: Customer Lifetime Value is the amount of money a customer spends on your business over the lifetime of their relationship with you.
  • Repeat purchase rate: The percentage of customers who make more than one purchase from your business.
  • Customer loyalty: The degree to which customers continue to do business with your company, have an emotional connection to your brand, and recommend your products or services to others.
  • AOV: Average Order Value is a metric used to measure the average total amount of money spent by customers in a single order. To calculate AOV, you divide the total revenue by the total number of orders during a specific period of time.
  • Purchase frequency: A metric that measures how often customers make purchases from a business or store within a specific period of time. It is typically calculated as the total number of orders placed by a customer divided by the number of unique time periods in which orders were placed.
  • Customer engagement: The level of interaction between a customer and your business.

Retention Strategies

  • Retargeting: Showing ads to people who have previously interacted with your business or visited your website.
  • Upselling: Encouraging customers to purchase additional products or services that complement their original purchase.
  • Cross-selling: Encouraging customers to purchase related products or services in addition to their original purchase.
  • Personalization: Tailoring the customer experience to meet the unique needs and preferences of individual customers.
  • A/B testing: Comparing two versions of a web page, email, or other marketing material to determine which one performs better.
  • Email marketing: Using email to promote your products or services, build customer relationships, and increase sales.
  • SMS marketing: Using text messaging to promote your products or services, build customer relationships, and increase sales.
  • Push notifications: Alerts sent to a customer’s mobile device to notify them of a sale, new product, or other news about your business.
  • Customer feedback: The information provided by customers about their experiences with your business, products, or services.

The first step of implementing a retention strategy is understanding the pieces in play. And remember, you can download this list of eCommerce Retention Marketing Terms at any time.

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