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7 Reasons You Need A Customer Retention Strategy for Amazon Selling

A customer retention strategy is vital for businesses, regardless of their level of success. Here are 7 reasons why it's crucial for Amazon sellers to pay attention to their customer retention rates.
Laura North
Last updated:
May 20, 2022

I'm sure by now most Amazon sellers understand the importance of customer acquisition. But what about customer retention? A few years ago, it was just assumed that people would continue to buy from Amazon even if sellers didn't do anything to hook them. Now, with competition growing and CPCs's just not true anymore.

Customers are fickle and aren't always going to stick around. That's why you need to understand the value of customer retention and why it's a valuable strategy for Amazon sellers.

To make more money.

scrooge mcduck gif -make more money - customer retention strategy

If you are selling on Amazon, you should be focused on customer retention as much as you are focused on new customer acquisition. It's a fact that keeping your existing customers is the single most important part of growing your business and can help you make more money.

Customer retention is one of the key drivers to growing your revenue on Amazon. It's easy to get caught up focusing solely on getting new customers, but it's important to remember that your existing customers are also a very valuable source of revenue. Satisfied customers are more likely to stay with you even when they encounter a problem. They’re also more likely to tell their friends about you, sharing recommendations organically through social media or word of mouth.

All of this adds up to a more efficient - and profitable - sales and marketing strategy for Amazon sellers

To grow your brand.

As an Amazon Seller, you shouldn't underestimate how important building your brand is. If your ultimate goal is to get out of the Amazon game and sell your brand, having an army of loyal, repeat customers makes you immediately much more attractive to potential buyers.

If your goal is to play the long game and build a thriving business that will be around for generations, then again, having a solid brand identity that people know, love and trust makes it easier to grow and adapt with the times.

The amount of products Amazon sells is not limited by the number of products sold by third-party sellers; therefore, there's no cap on the amount you can make. With the right strategy and enough effort, there's no limit to how far you can take your business on Amazon.

However, if you don't have a strong brand behind you and are relying solely on Amazon as your platform, then someone else could easily copy your product or undercut your prices. If this happens frequently enough (which it almost certainly will), then you'll find yourself in a position where you can't compete and will end up losing sales.

To create loyalty.

line of duty gif - build loyalty - customer retention strategy

The cost of retaining a customer is nearly always lower than the cost of making a new one. That's why it's so important to create loyalty within your existing customer base.

Loyal customers are more reliable, and more likely to advocate for your Amazon brand. By creating a positive customer experience on Amazon, you can increase the likelihood they'll return to your store again.

The good news is that you don't have to reinvent the wheel — in fact, you probably don't even need to invent a new hubcap. The techniques that work for Amazon itself can also work for your Amazon business.

To build a network of trust.

In the past, many Amazon sellers focused on short-term profits. This meant doing whatever they could to increase sales and conversion rates, even if it meant sacrificing things like customer loyalty.

However, more and more Amazon sellers are now focusing on the long game — building up a network of loyal customers who will return again and again.

Refocusing your Amazon seller strategy toward customer retention will help you to build up a network of trust with your customers and create brand evangelists who will share your products with their networks. This will ultimately help to increase traffic to your listings, drive more sales and boost your profits.

To gain feedback.

It's difficult to get new-to-brand customers to commit to writing you a review, but customers that have bought several times from you can become powerful evangelists for your products, and the barrier for them to leave feedback is much lower since they're already bought into your brand.

One way to entice your existing customers to provide feedback is to offer deals on your products - and because you know that a subsequent purchase is likely from loyal customers, this kind of offer is far more attractive than it would be to someone who is unlikely to purchase from you again.

It is cheaper than customer acquisition.

It's just a fact that it's much cheaper to retain customers than it is to attract new ones.

The cost of customer retention is often marginal in nature, and it's simply less expensive to keep existing customers than it is to find new ones.

According to research conducted by Bain & Company, a 5% increase in customer retention can lead to a profit increase of 25% to 95%.

In practice, this means that even if you have to spend money to keep a customer, you will at least break even over the long run - so understanding your retention rate more deeply may actually mean you can afford to spend more - it's completely game-changing for your entire Amazon marketing strategy.


🤓 Read more: Introduction to Customer Aquisition Cost and Customer Lifetime Value on Amazon


Repeat customers make your business stronger.

As we've said: people who have shopped with you before are more likely to buy from you again. Your existing customers already know and trust your brand — as long as you can maintain your shoppers' loyalty, they're almost guaranteed to keep coming back.

Repeat customers will also help increase your store's average order value (AOV), which is the average amount spent on each order. If they've shopped with you before, they've already accepted your pricing model and are more likely to add more items to their cart, or increase their spend size during each transaction.

With greater stability in revenue and improved AOVs, your business becomes much more robust and this means you can afford to spend more time working on other things. You can work on building your brand, improving the customer experience, creating new products and services, or just spending some time with family and friends.

Repeat customers want to be rewarded for loyalty.

awkwafina trophy gif - award loyalty - customer retention strategy

We've made lots of cases here for the importance of retaining your customers, and generating greater loyalty, but what can you, as an Amazon seller, do in return for their loyalty?

Give them special deals. Everyone loves feeling like they're getting a good deal. Customers who feel like they're getting a great deal will be happy and loyal, and they may also be inclined to share their experiences with friends and family members. You can offer discounts on specific items or categories of products, or add inserts in your packaging with how to use your product or to get the best use out of your product. If you’re selling something food-related, you can include an insert with some recipe ideas for instance

🤓 Read more: Are your deals and promotions actually worth it?


Thank them. Everyone likes being thanked, and customers are no exception. Send them an email after their first purchase, and if they continue buying from you, send them another message after each purchase, saying thank you for being such a great customer.


Customer retention is essential for every business, and keeping a close eye on yours will help you avoid any unwanted surprises. The best way to think about your customer retention rate is as a sort of "health report" for your customers—they show you how well your business model is working in general, and ways that you can keep improving upon it. The simplest and most efficient way you can start to measure your customer retention rate, is by investing in an Amazon analytics tool, such as Nozzle.


🤓 Read more: 4 types of Amazon analytics tools and are they worth it?


Monitoring your customer retention over time can be an effective tool for balancing the growth and the marketing aspects of your business. Keeping a close eye on customer retention means that you can do what's necessary to make sure business remains profitable and enjoyable. 


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