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The Comprehensive Guide to Ecommerce Inbound Marketing

This guide has been organized into a two-part series. Part 1 is intended to address “why” eCommerce inbound marketing to existing customer is important and how to lay the foundation to create value. Part 2, which is in the process of getting completed, will address “how to” execute strategies developed in part 1 for creating value.

For many years, customer retention has played second fiddle to customer acquisition. However, in today’s world of rising customer acquisition cost, an increasing number of companies are realizing the true value of customer retention. This guide is intended to help you understand the value of customer retention marketing and provide you practical step-by-step methods on developing a customer retention strategy, increasing order frequency and revenue, and incorporating tools to increase customer lifetime value.

Chapter 1

Why Ecommerce Inbound Marketing?

It is a well-known fact that marketing to an existing customer costs far less and is far more profitable than marketing to new customers. Depending on your industry, acquiring a new customer can cost five to 25 times more than retaining an existing one. However, a vast majority of companies fail to prioritize marketing budgets, resources, and programs to enroll repeat purchases. Forrester Research estimates that on average, 80% of marketing budgets are focused on new customer acquisition. Most companies are focused on growth, failing to spend adequate effort on cultivating loyal customers, repeat buyers, and brand advocates. A study conducted by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) concluded that increasing customer retention rates by as little as 5% can increase profits by 25% to 95%.

Increasing customer retention rates by as little as 5% can increase profits by 25% to 95%.

— Frederick Reichheld of Bain & Company

In today’s world, it is has become easier than ever to start up a business, with platforms like Shopify, Magento, BigCommerce, WooCommerce and others that have a user-friendly interface for opening and operating an online store. The flood of online stores opening up every day has increased competition, saturating the markets. The simple process of marketing to leads through small PPC campaigns and social media has seen a drastic increase the cost of customer acquisition with the influx of competing brands. Acquiring new customers is still vital, but striking a balance in resources and attention working towards customer retention strategies is the key to create healthy and sustainable growth. Customer retention marketing is about keeping your existing customers engaged and happy so they keep them coming back to make repeat purchases at your store. Furthermore, those customers that are exceptionally happy with your products, services, brand and customer service will become a voice for your company as a brand advocate. A brand advocate will help bring in new leads with word-of-mouth recommendations that are nearly invaluable to your company and stretch far past your immediate reach.

Chapter 2

Laying the Foundation

Most of today’s eCommerce businesses are armed with a vast amount of customer data. Yet, this data must be systematically and accurately analyzed in order to develop effective strategies that increase customer value. Customer interaction and order processing data should be examined in real-time to create actionable events that are time sensitive to the needs and interests of the customer. In order to develop strategies to increase the value of your customer, you must first estimate the current value of your existing customer base and understand their motivations. To do this, we will explore five foundational areas:

  1. A Simple Way to Calculate Customer Lifetime Value (CLV)
  2. The Power of Repeat Order Probability
  3. Segmenting your Customer Base Using RFM Analysis
  4. Creating Relationship Context with Buyer Personas
  5. A Buyers Journeys that Delight your Customers


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