Strategies For Boosting Customer Retention In Ecommerce

I analyzed 100+ loyalty programs in the last 30 days. Most brands still run loyalty like it’s 2009: Earn points, get a discount, repeat. The top 10%? They’re using loyalty to change behavior- not just reward it. If I were Head of Loyalty at a $10B+ brand today, here’s exactly what I’d do to build a program that drives LTV, repeat purchases, and real retention: 1. Stop Giving Away Loyalty - Make Them Pay for It Costco, RH, Barnes & Noble. When customers pay upfront, they buy in - literally and psychologically. Forget free points. Paid memberships = commitment, retention, higher LTV and emotional sunk cost. 2. Make Loyalty Required, Not Optional - Integrate Directly into Payments Starbucks preloads!!! When rewards are embedded in how people pay, behavior shifts faster, and for longer. This is probably the biggest opportunity in loyalty right now. 3. Forget Delayed Points - Instant Gratification is More Important Immediate dopamine beats theoretical future savings. Slow accumulation = slow engagement. Instant offers = repeat behavior. The 2nd purchase matters more than the 10th. 4. Make Loyalty Emotional, Not Transactional REI, North Face, Sephora. Customers want to belong, not just save. Identity, community, and shared values are outperforming cashbacks and discounts in driving long-term loyalty. Loyalty isn’t just a discount strategy, it’s a brand strategy. 5. Invest in Status + Experiences, not Generic Perks This isn't just theory – with companies like Rapha and Lululemon offering loyalty members exclusive product drops, community events and behind-the-scenes experiences. Lean into waitlists and exclusive product drops. Less financial. More status + psychological “being in the club.” 6. Reward Engagement, Not Just Transactions MoxieLash, Pacifica, Lucy & Yak. UGC. Reviews. Referrals. Loyalty now means participation. The modern flywheel starts before checkout - and lasts far beyond it. ~~ Bottom line? If your loyalty program is still playing a game from 15 years ago, your customers are going to find better options. Today, the best brands in 2025 aren’t just rewarding loyalty- they're engineering it. PS: We analyzed 100+ programs across QSR, retail, travel, and fintech. Next week I’ll share the Top 30 loyalty programs leading the way. Stay tuned🙏

Way too many e-commerce brands run bare-minimum loyalty programs that don't move the needle. Points. Discounts. It gets old quick. Your top 10% of customers likely drive 40-65% of your profit. But are you treating them like the VIPs they are? Or just sending them the same generic emails as everyone else? Brands that are crushing it right now are building tiered VIP ecosystems that transform transactional shoppers into high-LTV brand advocates. Speaking from 4+ years of experience, I’ve learned a few things that actually work: --> Early access drops that make top customers feel like insiders --> Exclusive product variants unavailable to regular customers --> Private Slack/Discord communities connecting your best customers --> Physical gifts that arrive unexpectedly (not just on birthdays) --> VIP-only virtual events with your founder/designers Data doesn't lie. Well-designed VIP programs consistently deliver 3-5x ROI compared to acquisition campaigns. These programs also cost dramatically less than constantly chasing new customers. Stop treating loyalty like a cost center using discounts, and start treating it like the profit driver it should be, like leveraging experiences, exclusivity, or building relationships. Your competitors are leaving millions on the table with lackluster VIP strategies. The opportunity is massive for brands willing to invest in their best customers the right way. Who's doing VIP programming exceptionally well in your category? Curious to hear some examples.

Are discounts hurting your brand’s image, and performance? Before you start tossing around discounts just to get customers to buy, take a step back. Are you building a discount brand, or do you want to retain that premium image? I often see brands “train” their customers to only shop with them during heavy discount periods. This is NOT a winning strategy. Often times this dilutes margins and pulls revenue forward at the expense of predictable and stable 30/60/90 days sales. You also attract a different type of buyer (discount shopper), who usually has lower CLV and churns faster. Here’s how to get creative with your offers without slashing prices: 1. Test the Wording Instead of defaulting to percentage discounts, experiment with more strategic language in your offers. For example, if you’re a subscription business, try a "double hit" offer, where customers can bundle two subscriptions to save on shipping or receive a slight added value. This approach keeps the offer compelling without lowering your brand’s perceived value. Wording like “Double Your Order, Save on Shipping” gives the feel of an exclusive offer while still protecting margins. 2. Offer Freebies Instead For premium brands, offering a freebie can be far more powerful than offering discounts. At MANSSION, for example, free ring sizers are provided with each purchase, which adds value without devaluing the product. This approach makes customers feel they’re getting something special and unexpected. This tactic works especially well for building brand loyalty, as customers associate the “extra” with your brand’s generosity. 3. Escalate Offers for Retention Rather than immediately offering a discount to customers who haven’t repurchased, consider using a tiered incentive system. Start with a small offer, like free shipping or a minor add-on, and gradually escalate only if they remain inactive. This gives you a retention lever without conditioning customers to expect discounts right away. It also preserves the brand’s premium positioning, rewarding patience with stronger offers over time. 4. Focus on Value, Not Price Instead of simply lowering prices, focus on delivering additional value. Consider bundling products at a slightly reduced price, offering loyalty program perks, or providing exclusive early access to new products. The goal is to give customers a reason to keep buying from you without eroding your brand image. When value is defined by unique experiences or exclusive access, customers perceive your brand as generous and premium—not discounted. Key Takeaway: You don’t have to race to the bottom with discounts. A well-thought-out offer that preserves your brand’s integrity is far more powerful. Remember: Value > Price.

Retention issues in ecommerce aren’t caused by bad products. They’re caused by lazy flows. Everyone’s running the same post purchase sequence: 1. Order confirmation 2. Shipping info 3. Review request And then silence. Here’s what to do instead: → Day 0 Add “what to expect next” with estimated delivery + helpful info on usage/care. Reassurance = fewer support tickets. → Day 3 Send a use case, demo, or testimonial: “Here’s how X used it while traveling”. You're reinforcing buying confidence before it arrives. → Day 10 “Here’s how to get the most out of your purchase”. Video, tips, storage, cleaning. Don’t assume they’ll read the instructions. → Day 20 Customer is warm. Don’t pitch a second product yet, ask them to show it off or refer a friend. They’re still in the “love bubble”. → Day 30 Now pitch. But make it personal. “Because you bought X, you might need Y” → Day 45+ Keep showing lifestyle applications. Rotate between customer stories, transformations, and tips. You’re not selling a product anymore. You’re selling continuity. Retention starts after the sale. Don’t automate yourself into irrelevance.

Improving 2nd purchase conversion by 5% can boost LTV by 20-35%. But most brands don't focus on this. Some tips to increase re-purchase (#5 is my fav) 👇 I looked at data for 100+ of our retail brands. On average: - First-time buyers have a 15-30% chance of returning - After a second purchase, that jumps to 60-70% Because of this snowball effect, little improvements to 2nd purchase conversion (+5%) can mean significant LTV jumps (+20-35%) Here's a handful of tactical things we've seen work. ----- 1. Focus on a shorter window than you think. Run your retention curves. Chart % of customers making 2nd purchase by month. You want to find where the cumulative repeat rate flattens out. - Most brands will be ~90 days. - Consumable brands (supps, food/bev, beauty) will be shorter (30 days). - Products w/ longer usage cycles may by 180 days or more. It all depends. Many brands make the mistake of using a 12-month window to look at churn. You've almost certainly lost that customer by then. Focus on a shorter window than you think. 2. Cross-category has a higher propensity of longterm retention ----- Cross-category buyers (almost always) have a higher LTV than single-cat buyers. - If they bought jeans, offer tops or accessories - If they bought skincare, suggest adjacent skus, not refills - If they bought a core product, introduce them to your specialty items Ps, you can segment your CRM and split test this. Just remember to tag your customers when measuring long-term LTV performance. ----- 3. Micro-commitments + Add Value! Before asking for a 2nd purchase, squeeze out small/easy commits: - Request product feedback/review (one question) - Offer style or usage guidance (post-purchase series) - Provide value-added content related to their purchase - Solve common problems w/ the products - Show how other customers use it Each small activity builds more engagment (and goodwill) w/ your brand. ----- 4. Implement a "Last Chance" campaign If your 2nd purchase window is 90 days, maybe that's Day 60. Deploy a specialized "almost lost" campaign. - Use language w/ mild urgency (avoid depsparation) - Include an unexpected benefit or small gift/gwp/ The offer MUST be better than what you'd give a first-time customer. ----- 5. Make the product better That's it. Just improve the product quality, and you'll see a natural jump in repurchase. It helps acquisition too (referral/WOM). By shifting a little focus from acquisition to that crucial second-purchase moment. What's your 2nd purchase "window"? 30, 60, 90 days? What are you doing to shrink that window? #ecommerce #customeranalytics #ltv

"Points for purchases" is killing your brand. That's what Phil C., CEO of Upzelo, told me during our recent Chew On This episode. And after seeing the data from 4,000+ brands, I believe him. Here's what's actually working in loyalty and retention → Phil's journey is fascinating. Before Upzelo, he built the world's largest fitness platform with a 1.45% churn rate. Now he's helping brands reimagine loyalty programs. What he taught us: While most DTC brands are still playing the points game, they're bleeding customer value and watching CAC skyrocket. Instead, here are 3 strategies to ensure your loyalty program brings value to your customers and your brand: 1. Stop Chasing Transactions Traditional approach: Points for purchases Modern approach: Reward customer success Phil shared how one UK brand connected health data to their loyalty program. Every workout became a reason to engage, not just every purchase. 2. Meet Customers in Real Life Your customers don't live inside your Shopify store. One of Phil's clients, a motorcycle gear company, built their entire program around Saturday group rides. The result? 3,500 new program members in 3 weeks. No email blasts. No ads. Just organic sharing between riders. 3. Measure Real Impact Drop these vanity metrics: - Program signups - Points earned - Reward redemptions Instead, track what drives growth: - Purchase frequency - Category adoption - Real-world sharing 4. Goal achievement At Obvi, we're already seeing the impact of this approach. When we shifted from points-based rewards to focusing on customer fitness goals and results, our retention impact transformed. The Big Revelation → The best loyalty programs don't feel like programs at all. They feel like a natural extension of why customers chose you in the first place. Want to build real loyalty in 2024? Stop trying to buy it with points.  Start earning it by helping customers succeed. Huge thanks to Phil Carr for sharing these insights from his work with over 4,000 brands. Want the full playbook? Check out our Chewonthis DTC episode where we break down: - Moving beyond transactional loyalty - Building retention through real-life connections - Measuring what actually drives growth