Customer Retention: Pros And Cons For E-Commerce Profit Income

  • Written By:
    Stacey Wonder
  • Published On:
    October 6th, 2020
  • Read Time:
    5 Mins
  • Category:

Humans are creatures of routines. We all adore our familiar favorite things. We have our best stores where we shop, even though it is much more expensive than other ones. We have used that exact shampoo since we were teens, no matter how good and more helpful the new products are. Why do we pay more and use inefficient things? Some marketers did a really great job while coming up with a customer retention strategy.

Customer retention means that customers were satisfied to its fullest while using your brand. They enjoyed the service, the product, the delivery – everything. It also means that you did a great job of reminding customers about your business and have new products to keep them engaged.

Customer retention is something that all marketers are striving for. Customer retention rate is always included in the list of the most important KPIs that every eCommerce business should measure. 

Why do brands care that much about customer retention? Is it really a game-changer? 

In this article, we are going to talk about the pros and cons of customer retention to find out if you really need to work on that to make your eCommerce business more profitable.

New Customer Are More Expensive

It is surprising that many companies are more fixed on attracting new customers than on keeping customer retention rate flying high. In fact, only 18% of companies value retention over acquisition. However, such priorities cost a lot of money to business owners. 

It is a known fact that it costs 5 times more to gain a new customer than to keep existing ones. In order to gain a new customer, you have to show off your business to hundreds of others. It means that you will have to pay for bound and inbound marketing, event promotions, employers who are in charge of sales and business growth. Yet, there is still more into it. It is a never-ending process where you have to invest in new ads, retargeting, more modern marketing strategies, etc. all the time. It does not work another way. All of it makes acquisition so much more expensive than retention.

Moreover, you spend so much money on getting one new customer but it buys one product from you and never comes back. Was this customer worth all the money and effort? We highly doubt it. Customer retention gives you the possibility to get the money that you have spent on ads back and earn much more on top.

Loyal Customers Spend More

36% of customers are ready to spend more on their favorite brands and they spend 60% more per transaction. It is not surprising while people tend to trust you more if they have already bought something from you. 

Let’s get into your customer’s shoes to get the logic behind that. So you order from the site for the first time. You got interested because of the discounts or good reviews. However, reviews can be written by the brand itself so you do not trust them that much. You buy something not that expensive because you are not sure whether you will get a desirable package. If you do, who knows if it is working, right? After you have got your package quickly and the product does its job, you are ready to make bigger purchases. The sales team of Essay Tigers over the years of their experience has discovered that keeping an eye out on the first interaction is so important as it means that people put you on a trial and you better want it to be a successful one.

Loyal customers tend to be more open to price increases too!

Moreover, if customers become loyal, they also shop from you far more than twice. They are the ones who will keep your business going if you have trouble with attracting new customers. They are like your financial cushion.


You Do Not Have To Fight Off Your Competitors

Unfortunately, almost every problem was solved twice at least. It means that whatever niche you enter, you already have quite similar businesses that offer the same products or services as you do. The price is quite the same too because you cannot put a bar too low – your business will sell a lot but will not bring any profit. So you have to come up with something new in order to stand out. 

As we have mentioned before, a lot of businesses focus on acquisition. Be a keeper in this business. Show your customers that you truly care about them and they will never look at your competitors who care about getting more people. If a customer is satisfied with everything, they literally do not have a reason to look for some other stores. You are their routine now. 

Loyal Customer Talk More

We can not recommend brands that we are not 110% sure about. If a customer recommends a company to other people, it means that the loyalty of their listeners and their reputation are involved. They want to lose neither their trustworthiness nor the good image they acquired, so if they do not know you, they will not talk about you.

On the other hand, if they are loyal to your brand and they ascertained multiple times that your eCommerce business is the best, they want to help out their friends and family by suggesting your services or they want to brag about that amazing store where they have got this luxurious skirt from. They can become huge fans of yours and talk about you non-stop on social media or in real life. 

Those recommendations from customers are really important. We do not believe ads online that much. In fact, we see our relatives and friends as a reliable source of information. We might consider buying something after they have mentioned a brand to us, even though we did not think of needing this product before. 

These advertisements from your customers cost you nothing but they are much more effective than the ones that your sales team worked on so hard. 

Get Valuable Feedback

Loyal customers want to see their favorite brand grow and shine. They are also interested in getting the best service out there. Therefore, they are much more likely to fill in the feedback form like an investment in the better future of their customer experience. 

A customer who saw that their feedback was taken care of and their issue was resolved are even more likely to buy more. Do they feel that they are truly taken care of and isn`t it the feeling that we all seek?

From their feedback, you can brag about your new features to new customers and get a deep insight into how to retain more clients than ever before. You will know what is the most important thing that makes people stay and work on it!


Cons of Customer Retention for Ecommerce Profit Income

There are not many points to discuss. You can barely find anything bad about keeping your customers happy and getting a great profit out of it. 

However, the only bothering thing can become a difficulty. It is not an easy task to keep customers satisfied and engaged. Every customer has their own needs and things that they respect and value the most. So you might find yourself working on too many improvements at once.


Customer retention has a lot of benefits: we have named 5 main ones but there is so much more. Nevertheless, an increase in profit, a decrease in spending and stressing about competitors, a free and more effective advertisement from customers, and eager feedback giving are enough to make everyone want to invest time and effort in customer retention. 

There is a challenging con into it: you have to put a lot of effort into customer retention. There should be a lot of analytics done, additional education for employees provided, and some money invested. 

However, do not get demotivated: benefits here totally outweigh the cons. Work hard and get a full package of rewards!

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Stacey Wonder

Stacey Wonder is a content marketer who enjoys sharing best practices for self-development and careers with others. In her free time, Stacey is fond of contemporary dance and classic French movies.

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