Customer retention ecommerceCustomer retention: the most important metric in 2021

We all know it’s cheaper to make sales to existing customers than it is to acquire new customers. For any business that’s able to retain its customers, they can improve their profits and cut down on acquisition costs. The common forms of retention include loyalty and rewards programs. Customers will be rewarded for sticking with your brand and it increases your bottom line. 

While these programs are effective, they have one limitation: namely the culture of discounts they promote. Think of it as the Bed Bath & Beyond (BBY) problem. They’re a major retailer renowned for their generous coupon strategy. However, this backfired for BBY as customers refused to shop at their stores unless they had a coupon – ultimately resulting in lower profits for BBY. 

At Recapture, we’ve processed over $1.5 billion dollars in gross merchant volume with our email marketing platform and during that time, we’ve discovered a few insights about retention and how the best stores run their business. There’s a big difference between the winners and everyone else in that regard.

The two single most important retention campaigns you can have in your store include abandoned cart recovery and winback campaigns. With these two strategies done well, ecommerce businesses can automatically recover the easiest and lowest-hanging revenue to improve their business further. 

Customer retention has always mattered, but here are some of the reasons why customer retention is the most important metric of 2021.

Why customer retention matters in 2021

Many ecommerce businesses saw record revenue in 2020 due to the COVID-19 pandemic. The consensus among experts is that ecommerce adoption sped up by 5 years. Ecommerce merchants now find themselves with a larger customer base than ever before. But there’s still a nagging issue for many ecommerce brands: it’s incredibly easy for a customer to find a new brand to shop with anytime they want.

Unlike local retail stores where customers have limited options, ecommerce customers can find a new online store with a simple Google search. In order to keep customers around, ecommerce merchants have to come up with ways to improve retention rates. 

Acquisition costs keep rising

It’s no secret that big D2C giants like Away, Allbirds, Casper, and others grew due to their successful ad campaigns on Facebook and Google. However, the increased reliance on these channels means that ad costs keep rising. To keep up with large spenders, you’ll need to spend more on advertising, which cuts into your profits. If you’re a brand selling low-cost products, ad costs can potentially price you out of advertising in the first place.

Competition is fiercer than ever

There are hundreds of ecommerce stores selling similar products to what you might sell. Whether you’re selling nutritional supplements, workout clothing, snacks, CBD products, or something else, there are always alternatives available. Improving customer loyalty is a big focus for many brands in 2021.

Customers want more personalization

Think of the Amazon shopping experience. When you visit the Amazon home page, you’re likely going to see products recommended based on your purchase history and browsing history. Customers have come to expect personalization from the digital brands they shop from.

While it may seem daunting to set up personalization, it’s not hard. Even simple campaigns based on customer activity (abandoned cart, purchases not made after X days) can deliver powerful results. By implementing personalization, you can see an average increase of 20% in sales when using personalized experiences.

Enter SMS: the best customer retention channel of 2021

So how can your ecommerce business retain its customers in today’s market climate? Email has typically been the sole answer but that’s not enough anymore. The answer is SMS. As a marketing channel, SMS saw massive increased usage in 2020 since many customers are now willing to text their favorite brands. 

High open & engagement rates

With open rates up to 98% and click-through rates (CTR) of 45%, SMS is one of the highest-performing marketing channels for ecommerce merchants. While email marketing isn’t dead, trying to get your messages seen when customers are getting flooded with emails on a daily basis is hard. 

With 97% of text messages being read by customers within 3 minutes of receiving them (compared to 18% open rates for email on the average campaign), SMS can be a great way to engage with your existing customers. 

Easier 1:1 communication with customers

With SMS, your brand can reply to customers in a much more personal fashion. As soon as a text comes in, your team can provide personalized responses to help the customer with thei issues. However, if your business is going to text with customers, you must be able to reply quickly. Unlike email, customers aren’t willing to be patient for a reply.

Better personalization opportunities

Like email, SMS can be personalized with recommendations based on customer activity. For example, if a customer orders Product A, you can send them a text upselling Product B. With this kind of personalization, 

How Evolve Fitwear recovered $62k in abandoned cart revenue

At Recapture, we’ve helped ecommerce businesses recover more than $150 million in abandoned cart and winback revenue since 2015. We’ve doubled the retention revenue of our subscribers and we’ve learned a lot in the past 6 years. Here’s an example of how we helped Evolve Fitwear recover abandoned carts and ultimately improve their retention rates.

When we first started working with Evolve Fitwear in 2017, their biggest issue was their abandoned cart rate. Kyla (the founder), previously worked with another vendor, but the results were lackluster. Due to the poor performance with their previous vendor, Kyla was willing to switch to Recapture, but she was apprehensive about the change (we can’t blame her).

Our team worked closed with Kyla to develop her abandoned cart campaign. In just a few months, Evolve managed to 4x their abandoned cart recovery! Kyla was quite happy with the results from 2017 to mid-2018 until she reached a sales slump.

How Evolve Fitwear doubled their recovery in Recapture using Winbacks

Even with the abandoned cart recovery increasing, Kyla ran into another issue: their sales were flat as their sales pipeline was slowing down–she was facing some fierce competition from rivals and her customers were flocking to other options because she didn’t know how to retain them long term. Her abandoned cart recovery was working well, but without new visitors coming in, their sales weren’t increasing. So how did we help Evolve fix this issue?

At the end of 2018, our team approached Kyla about setting up winback campaigns, which were a new feature of Recapture at the time. We explained the benefits of bringing back existing customers and why customer retention is easiest with people you’ve already sold to. It’s 5x cheaper to keep customers than to acquire new customers.

So Kyla decided to try winbacks in December 2018. After working with Kyla to set up the winback campaigns, Recapture doubled recovered revenue for Evolve in just one month. That’s how powerful winback campaigns can be.  Moreover, her sales started recovering because she was able to generate new sales from her old customers on new products and releases.

By February 2019, Evolve’s overall customer lifetime value (LTV) increased by 72% because of repeat buyers and multiple winback emails. At the end of it all, Kyla reversed her sales slump, and Evolve continued to see rising revenues and growth.


Customer retention should be a priority for your ecommerce business in 2021. With rising acquisition costs and low switching costs for customers, being able to keep your existing customer base purchasing again from your brand can have a high impact on your bottom line. 

To learn more about how Recapture helps improve customer retention with email and SMS, sign up for a free trial to start recovering lost sales.

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