Why you’re losing sales (+ how to improve customer retention)

High ecommerce churn rates can be devastating. We take a look at why you’re losing sales, and the customer retention strategies that will save the day.

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In ecommerce, customer retention is key to preventing you from losing sales. It costs 5x more to gain new customers than to retain existing ones, and so every customer you’re able to keep hold of saves you a significant amount of time, money and resources. To give it some perspective, for every 5% increase in customer retention, profits grow by 25%-95%.

Because online retail is so highly competitive today, loyalty doesn’t hold the weight it once did, and so churn rates are getting worse. Therefore, investing in customer retention strategies to prevent churn should be of the highest priorities for ecommerce businesses.

So, to help you with retaining customers, we’re going to look at some reasons why you’re losing ecommerce sales right now – and outline 3 powerful customer retention strategies that’ll leave your sales metrics looking much healthier.


Why you’re losing ecommerce sales (and not retaining customers)

Bad user experience

Customer expectations are sky high these days, and people have very little patience for websites that offer a bad, or even mediocre, user experience. As a result, 88% of users are less likely to return to a website after a bad user experience. That means that one of the main reasons you could be struggling to retain customers and losing sales is because your website isn’t up to scratch.

Here’s a few of the things that could be causing a bad user experience on your online shop:

  • It’s not mobile optimised
  • It’s too hard to navigate
  • There’s broken links
  • The checkout process is too long or clunky
  • There’s 404 errors
  • It’s not engaging or attractive for your audience

The metrics that matter

Metrics that indicate a bad user experience are high bounce rates (the average ecommerce bounce rate is between 20-45%), fewer page visits and a low average time on page. A higher-than-normal shopping cart abandonment rate also suggests issues with the checkout process.

READ MORE: 5 simple ways to increase website engagement


Slow page load times

One of the main issues that causes customers to stop shopping with you is slow page load times. An eyewatering 79% of shoppers report that they would not return to purchase from a slow loading website.

Ever since the advent of the internet, our attention spans have been on the decrease. And today, 47% of users expect a page to load in 2 seconds, while 40% will abandon a website that takes more than 3 seconds to load. Ouch.

There are a few things you can do to keep your page load time lower, such as:

  • Minimising HTTP requests
  • Improving server response time
  • Optimising images for the web
  • Frequently testing your page loading times to identify any anomalies in loading times as they happen – or investing in an automated KPI tracking tool that does this for you
  • Browser caching

The metrics that matter

The metrics that indicate slow page loading are a higher-than-average page load time (ideally, it should be below 3 seconds) and a high bounce rate (the average ecommerce bounce rate is 20-45%).


They’re buying from your competitors instead

If you’re noticing a big drop in the number of ecommerce sales and people returning to your site, it could be the case that they’re going to your competitors instead.

Is there a new competitor in town, or has an old one has upped their game? If yes, it could be mean that your products or services aren’t as appealing or cost-effective as they once were.

This is why it’s so key to keep an eye on who your competitors are in the space. If you know who you’re competing for the market share with, you can keep track of the moves they make and be aware of the standard you’re competing against.

The only way to stay ahead in the competitive world of ecommerce is by constantly innovating. So, if you’re losing sales to competitors, try the following:

  • Source new products
  • Listen to your customers and make changes
  • Monitor trends
  • Switch up your messaging to show you’re a cut above the rest
  • Make sure you have the best website on the market, and offer the best customer experience possible

The metrics that matter

Metrics that indicate you’ve had a drop in sales include KPIs such as a decrease in the number of sales and an increase in customer acquisition cost.


Your shipping is too expensive 

Incumbents like Amazon have changed the game when it comes to customer’s shipping expectations. As a result, customers between 18-44 report that shipping costs are the biggest factor in deciding where to shop. So, if your shipping costs are expensive, this could be why you’re finding it hard to retain customers.

Offering free shipping is an ideal way to capture this market. But, if you can’t, there’s a few things you can do instead. Giving out discounts on products is a great way to negate the cost. Or reduced shipping for those with registered accounts can tempt people to sign up for an account, and be much more likely to return.

The metrics that matter

The key metric that indicates that people are being put off by the cost of shipping is a higher-than-average shopping cart abandonment rate as people leave the site when they see the cost of delivery. Qualitative customer service metrics, like poor reviews or customer service conversations, will also shine a light on how your customers feel about your shipping costs.


Your delivery policies are confusing

Being unclear with your delivery policies can have a similarly negative impact on customer sales and retention. 45% of shoppers abandon their carts when they’re dissatisfied with delivery options due to price or timing. To reduce customer churn, make sure you’re being upfront about your delivery policies and include shipping costs in the shopping cart as soon as possible.

The metrics that matter

Again, a higher-than-average shopping cart abandonment rate will indicate that your delivery policies are confusing, in addition to qualitative customer service metrics, like poor reviews or customer service conversations.


Customer service issues

If customers aren’t returning, this might be because of customer service issues. People are unlikely to return if they had an issue with a previous order and received a negative experience. Because of the competitiveness of online shopping, 67% of customers have become ‘serial switchers’ – customers willing to switch the brands they patronise because of just one poor customer experience. And it’s costing businesses $75bn a year.

With expectations from customers so high, it pays to offer full support to customers and provide the right training to your team to ensure those customers shop with you again and again and again.

The metrics that matter

A drop in the number of sales will indicate that sales are down. Meanwhile, qualitative metrics like customer feedback, reviews and customer service conversations will let you know where the problem lies.



3 customer retention strategies to reduce churn rate

1. Personalized messaging and experiences

Personalization is an incredibly powerful customer retention strategy. A whopping 80% of customers are more likely to purchase a product or service from a brand that provides personalized experiences. And, in 2019, 72% of customers only engaged with marketing messages customized to their specific interests. Additionally, bringing personalization into the interactions you have with customers builds a more personal relationship with them, which in turn makes them much more likely to return to your site.

There are a few ways you can make your customer’s journeys more personalized. Some basic ways to get started with personalization are:

More complex strategies for personalizing messaging and experiences are:

  • Segmenting groups to target with more specific email marketing messages, offers and discounts
  • Changing your homepage and navigation based on the customers specific interests
  • Leveraging customers’ browser history, referring source and browsing products to recommend relevant content and products
  • Cross-selling campaigns for products that complement recent purchases

2. Cross-channel retargeting

Retargeting campaigns are a powerful way of retaining customers. The average CTR for retargeted ads is 0.7% compared to just 0.07% for regular display ads. Retargeting is an approach you can use to reach customers who’ve purchased products with you before, abandoned a cart on your site, or visited your online store and not made a purchase.

You can retarget customers across many different digital channels to expand your reach. And even if customers don’t click on the ads, it’s still a great strategy for brand awareness.

For effective retention, try these retargeting strategies:

  • Display products related to their searches on your store
  • Segment your audience by behaviour and interests for more personalized, more powerful retargeting campaigns
  • Set a frequency cap so your audience isn’t seeing your ad too many times. Remember: People tend to take action after seeing your ad three times. But if they’re seeing it 10 times in one week, they’re going to experience ‘banner blindness’
  • Rotate ads so they aren’t seeing the same ones over and over again

3. Consider a subscription-based model

In the ecommerce industry, subscription-based business models are rapidly becoming the norm. Online retailers can offer either a monthly payment for free delivery (like Amazon Prime do) or they can use a business model based entirely on subscription, like some startups such as Birchbox and The Honest Company.

A subscription-based model not only supercharges your customer retention strategy, but it also offers a profitable recurring revenue stream. It’s also a win-win for both you and your customer: They get greater convenience, while you don’t have to worry about your churn rate.

Aside from its ability to enhance retention, a subscription-based model also brings a few more benefits to you:

  • Better revenue predictions: Traditionally, revenue is assumed by analysing past sales metrics, but this isn’t actually accurate for many businesses. With the subscription business model, it’s far easier to forecast revenue because your customers are almost guaranteed.
  • More straightforward inventory management: Inventory management is difficult in a standard ecommerce model. Since profit margins are so tight, buying too many or too few products can spell disaster. But with a subscription model, you can more accurately predict the inventory needed and this saves you time and money.

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