How to Fail at E-Commerce in 2025: Ignoring Customers? Fix It Now

Every e-commerce business is chasing new customers.

They pour money into ads, influencers, and marketing campaigns, hoping to generate fresh leads.

However, they make one critical mistake in the process: neglecting their existing customers.

What do businesses actually need?

• Sales.

• Revenue.

• Profit.

According to the Harvard Business Review, keeping an existing customer is five to twenty-five times less expensive than obtaining a new one (1).

Yet, businesses tend to focus exclusively on customer acquisition, although their most valuable resource is their existing customer base.

To grow sustainably, you have to focus on retaining customers.

In reality, increasing customer retention by just 5% can boost profits by 25% to 95% (Bain & Company) (2).

So, how do you do it right?

Launch a VIP Program That Works

Your most loyal customers are your most valuable asset

They spend 67% more than new ones (BIA/Kelsey) and are 5-6 times more likely to buy new products (CrowdTwist).

However, most businesses treat all customers the same.

A good VIP program gives the impression of exclusivity and makes the customers feel valued, increasing retention and spending.

Here's how to do it:

• Offer exclusive early access to new products before the general public

• Create tier-based rewards that encourage repeat purchases (the more they buy, the better the perks)

• Send personalized thank-you gifts or special offers to top customers

• Give VIP-only discounts to encourage repeat business

When customers feel appreciated, they stick around.

Master the Reactivation Game

Not all customers will stay engaged forever.

But here's the good news: 45% of lapsed customers can be won back (Marketing Sherpa).

A targeted reactivation strategy can turn inactive buyers into loyal repeat customers (3).

Here's what works:

• Personalized re-engagement emails (they have 6x higher transaction rates)

• "We Miss You" campaigns with tailored offers based on past purchases

• Limited-time incentives to spark urgency and drive action

• AI-driven recommendations using purchase history to suggest relevant products

When done right, these strategies increase brand loyalty and foster a stronger bond with your target audience.

Build a Customer Success Journey That Scales

Most businesses focus on the first sale.

However, the most profitable brands understand that the real opportunity lies after the purchase.

A strong customer success journey increases retention and maximizes customer lifetime value.

Consider this: 93 percent of customers are more likely to repeat purchases if provided an excellent service (HubSpot) (4).

Here's how to build a retention-focused customer experience:

• Map out post-purchase touchpoints to keep customers engaged

• Schedule milestone check-ins (e.g., 30 days post-purchase, 90 days post-purchase)

• Offer proactive customer support to solve issues before they arise

• Encourage user-generated content (happy customers sharing experiences = free marketing)

When customers feel taken care of, they're more likely to return—and bring others.

The ROI of a Retention-Focused Strategy

Through our brands, we've seen how customer retention directly impacts growth.

When you focus on retention, you improve:

• Customer LTV (loyal customers = 10x first purchase value - KPMG)⁣

• Email engagement (segmented campaigns = 14.31% higher open rates - Mailchimp)⁣

• Repeat purchase rates

• AOV (repeat customers spend 33% more per order - Deloitte)⁣ (5)

Avoiding List Burnout

A common mistake in retention marketing is overloading customers with emails.

In fact, 69% of consumers unsubscribe because they receive too many emails.

To prevent list fatigue, follow these best practices:

Use engagement-based sending frequency (customers who interact more should receive more frequent emails)

Leverage behavioral segmentation (this can increase click-through rates by 100.95%)

Value-first content should be prioritized (not everything should be a sales thing, have educational or entertaining content)

The catch is to keep customers engaged but never overwhelmed.

💎Tap into your goldmine - Book a call to learn how we can build and run a list-nurturing system for your business.🚀

Final Thoughts

Your business is built on the foundation of your current customers.

They are easier to sell to, cost less to retain, and create a higher profit over time.

The e-commerce businesses that win are not the ones that are spending the most on ads.

It's those who build long-term, genuine, long-term customer relationships.

Therefore, how do you use to nurture your customer base?

If you're prepared to mine your customer list's gold, we can teach you how to build and run a list-getting system for your business.

FAQ

Why must your company place more importance on the money you spend keeping a customer satisfied than acquiring a new one?

Retaining customers is more cost-effective than acquiring them. Acquiring new customers is 5 to 25 times (Harvard Business Review) costlier than keeping an existing one. Retaining customers will also increase profits by 25 to 95 percent (Bain & Company) for a 5 percent increase in retention.

How can my e-commerce business increase customer retention?

You can improve retention by launching a VIP program to reward loyal customers, reactivating lapsed customers with personalized emails and special offers, and building a customer success journey with strategic post-purchase engagement.

What kind of rewards should I offer in a VIP program?

Effective VIP programs include, early access to new products, tier-based rewards (such as spend more, unlock better perks), exclusive discounts and offers, and personalized gifts for top customers.

How can I win back inactive customers?

To reactivate lapsed customers, send "We Miss You" emails with tailored offers, use purchase history to recommend relevant products, and create limited-time incentives to encourage re-engagement.

How do I prevent customers from unsubscribing from my emails?

To avoid email fatigue, use engagement-based sending frequency (i.e., active customers receive more emails), segment your list based on behavior to send relevant content, and focus on value-first content instead of constant sales pitches

Related Studies

1. Title: "The Cost of Customer Acquisition vs. Retention"

Acquiring a new customer can cost five to twenty-five times more than retaining an existing one, highlighting the cost-effectiveness of customer retention strategies.

Link: https://www.invespcro.com/blog/customer-acquisition-retention/

2. Title: "Customer Retention vs. Acquisition Costs"

Existing customers are 50% more likely to try new products and spend more on their average order value compared to new customers.

Link: https://www.businessdasher.com/customer-acquisition-vs-retention-cost/

Title: "See How Paper Source Increased Customer Reactivation Rate by 126%"

Paper Source, a stationery and gift retailer, significantly increased its customer reactivation rate by implementing targeted marketing campaigns and personalized customer engagement strategies.

Link: https://www.optimove.com/blog/see-how-paper-source-increased-customer-reactivation-rate-by-126

4. Title: "Customer Service and Retention: A Study on the Impact of Quick Responses"

A study by HubSpot found that 60% of respondents believe that quick responses and solutions are the top factor in customer service, highlighting the importance of efficient service in retaining customers.

Link: https://blog.hubspot.com/service/statistics-on-customer-retention

5. Title: "The Impact of Customer Retention on Organization Profitability in the FMCG Sector in Nigeria"

Summary: This study found a strong positive correlation between customer retention and organizational profitability in the FMCG sector, highlighting customer retention as a key driver of sustained profitability.

Link: https://abjournals.org/bjmms/papers/volume-7/issue-3/the-impact-of-customer-retention-on-organizational-profitability-in-the-fmcg-sector-in-nigeria/