5 Customer Retention Tools for Ecommerce, SaaS & Apps (Plus, How to Optimize with Them)

Knowing what to measure is the easy part. The key to success is optimizing all that data using the right customer retention tools …

Aaron Orendorff
September 04 2017

You already know how much customer retention matters to your bottom line. And—if you read last month’s Measuring Customer Retention: Five Magical Metrics to Demystify ROI—you also know the KPIs and formulas central to tracking it.

What you might not know is how to apply these metrics to keep the one group who matters most to your long-term success happy and loyal.


Because it’s one thing to know what to measure. That’s the easy part. Knowing how to optimize all that data with the right customer retention tools … that’s another beast entirely. Thankfully, it’s a profitable one.

That’s exactly what this post is all about: helping you pick the right tools to track and measure customer retention whether through sales, social, an app, or your marketing.

To do that, we’ll examine five types of retention tools, the metrics they measure, and a real-world example of each tool so you can see it in action.

#1 Native Ecommerce Dashboards

Native ecommerce dashboards are the default analytics tools that come with any major online platform.

But don’t let the word “default” fool you.

As far as customer retention goes, native dashboards are a powerful source of insight for two reasons. First, they’re built directly into the platform you’re using to sell your products. Configured correctly, they provide the most accurate and up-to-date information available. Second, their data can be transferred to many of the tools we’ll cover below to amplify their insights considerably.

On native ecommerce dashboards, four of the five key metrics covered in the previous article should not only be clearly identified but also prioritized:

  • Average order value (AOV)
  • Customer Retention Rate (CRR) and Customer Churn Rate (CCR)
  • Lifetime Customer Value (LCV)
  • Customer Segment Values (CSV)

Often, you’ll need to create your own custom segments to delve into CSVs more thoroughly. These segments should be based on number of orders—i.e., first-time versus returning customers—order sizes—high, medium, and low value (for instance)—and order frequencies. Creating these groups lets you focus your attention on moving low and mid-commitment customers up the LCV ladder as well as treat your best customers to concierge-level service.

What does this look like in practice?

Ecommerce Customer Retention Tool: Shopify

Shopify’s “Overview dashboard” presents the first two metrics mentioned above as part of its default settings:

(1) “Repeat customer rate” (for tracking CCR and CRR) and

(2) “Average order value,” which you can export or customize based on specific time frames and other variables:

Digging deeper, you can generate “First-time vs returning customer sales” reports to unearth the relative value of those primary segments, begin building CSVs, and integrate those groups with your marketing efforts — like personalized emails, custom discounts, and loyalty programs:

Perhaps most vital to customer retention, however, are Shopify’s “Customer” reports:

Coordinating average order value with your at-risk and loyal customers enables you to essentially create two valuable CVSs automatically. You can also track your returning customers one by one and use metrics like “Order value to date” to calculate their average LCV.

Using these types of dashboards and reports, which virtually all ecommerce platforms provide, lays the foundation for benchmarking, measuring, and improving customer retention.

#2 Customer Engagement

Relationships lay at the heart of every business. And your relationships are either strengthened or broken down with each interaction. Digitally speaking, quantifying your customer’s level of engagement is the measure of your relationship. This means tracking interactions via social media, your website, off-site advertisements, live chat, and emails.

Common demographic metrics, like geographical location and devices, are analytical starting points. But getting detailed about engagement through each touch point provides insights into your target audience that you won’t find elsewhere.

If customers are churning, it’s because either:

(a) Your product or service isn’t delivering on its promises, or

(b) Your customers are getting their relational needs met elsewhere.

If it’s the former, then complaints and returns will make that obvious. If it’s the latter, then an engagement strategy should be your answer.

Customer Engagement Retention Tool: Kissmetrics

Kissmetrics, a behavioral and engagement analytics tool, zeros in on the two most important metrics: how your customers are interacting with your website and how that relates to sales. On top of being a more robust — and easier to navigate — version of Google Analytics, Kissmetrics also monitors:

  • ROI of online content. By tracking users across your site, you can evaluate your content beyond vanity metrics like pageviews and shares.
  • Cohort actions. Find out who, what, how, when, and why users performed a specific action.

In addition, what we’ve called “segments” thus far, Kissmetrics calls “Populations,” but the ideas are nearly identical:

By building your Populations around retention and revenue — e.g., cancellations, number of purchases, time between purchases, CVS, AOV, LCV, etc. — you can then compare your marketing efforts over time, test macro changes to your funnel, and even split test entire groups.

With each change, you’re able to see the overall impact on retention instead of simply running A/B tests on individual pages and offers.

#3 Customer Relationship Management

Customer relationship management (CRM) applies to the strategies, processes, and technology used for cataloging customer details and interactions. That doesn’t sound particularly exciting, but CRMs — especially for long-term relationships or lengthy sales cycles — are must-use tools.

The power of CRM software is that it can be used to tap into the emotional sentiments of your customers as well as make you a more emotionally intelligent marketer. To retain customers, companies need to ensure their experiences provide the desired psychological outcomes, not just that they close sales.

CRMs provide that insight by recording information on customers through various points of contact and allowing staff to record and access detailed personal information about them.

CRM Customer Retention Tool: Hubspot

HubSpot’s CRM provides all the metrics outlined above in one central location. Similar to tools like Salesforce, ClinchPad, Pipedrive, and, Hubspot specializes in uniting marketing — ads, landing pages, online content, and automated emails — with sales — most notably: personalized emails, phone conversations, and in-person meetings.

Customer retention dashboards can also be created to monitor lifecycle stage, as you define them, as well as last sale and product type at a glance.

A lesser known capability of Hubspot is that lead and customer details from all online channels can be aligned with automated social media outreach. Better yet, you can drill down to see what your customers are sharing via social to measure both quantitative engagements as well as qualitative sentiment. These details enable marketing and sales to create more meaningful customer conversations.

As a final touch for retention, Hubspot allows for automatically generated emails when a customer asks a question on social media. These messages can be set up to come from the very person in your company charged with managing that customer’s account:

All this adds up to the emotional power of CRMs to measure and optimize customer retention.

#4 App or SaaS Usage

It almost goes without saying that the more engaged users are with your app, the more they’re worth to your company. Almost.

The trouble is knowing what activities to prioritize for retention. In general, the metrics apps and SaaS technologies monitor include:

  • Daily launches
  • Daily feature (or “most viewed screen”) usage
  • Session durations
  • Number of screens per session
  • Average in-app purchase value or recurring SaaS fee, and
  • Lifetime customer value (LCV)

While all of these metrics are non-negotiable, they only provide a bird’s eye view of your customers at large. How do you get granular?

App Customer Retention Tool: Appsee

Appsee offers a host of analytics to develop clear, behavior-based segments for retention. Naturally, this starts with retention itself:

But Appsee also enables you to access the kind of granularity that leads to long-term wins:

  • Session playbacks to see exactly what your customers experience, and whether something needs tweaking. Although time consuming, these videos can be used to determine sticking points in both purchases and functionality (i.e., why users abandon certain processes).

  • Touch heatmaps to aggregate in-app and SaaS usage across primary screens.
  • A comprehensive catalog of user actions which can be displayed using either a custom dashboard or exported to a spreadsheet.
  • Action cohorts to show the connections (or disconnections) between two actions.

Action cohorts are perhaps the most valuable metric for apps. These create real-world use cases that reflect not only in-app activity but also your in-app funnel.

Those actions can then be combined with Appsee’s conversion monitoring to show you where users are “dropping out” of the funnel:


#5 Customer Retention Optimization

Up to this point, we’ve focused predominantly on collecting the right data. And for good reason. Analytics is the fuel for marketers to spark relevant experiences that ignite customer retention..

The question still remains, what do you do with that information? What’s more, how can you unify and assimilate all your data from disparate tools to get a holistic, 360-degree view of your customers?

First, customer retention strategies should be implemented from the onset. In fact, the better your onboarding process, the longer you’ll retain customers. For instance, Groupon has perfected the purchase confirmation email, with its cross-selling voucher recommendations.

Second, holistic customer retention incorporates all digital communication channels. As such, the future of customer retention optimization is machine learning and artificial intelligence.

This means moving beyond DIY tactics and into automation that …

  • Identifies and segments customers into micro groups for hyper-targeted marketing. Even so-called “advanced” segmentation methods often fail to consider that people buy for different reasons. Managing and optimizing the flood of data available is nearly impossible.
  • Discovers and adapts to the future behavior of customer personas and micro segments with predictive analytics. Only by mapping current behavior with predictive models can you get in front of the retention curve.
  • Tests and optimizes campaigns against control groups. Like any good science, optimization has to exclude random segments from every campaign. This helps determine how much additional revenue is generated from the actions performed on the campaign group as opposed to the control group.

How do you do all that?

Customer Retention Optimization Tool: Optimove

Optimove is one of the first full-scale retention tools that combines machine learning, predictive analytics, and rigorous testing. It starts by mapping out your existing retention strategies and marketing plan.

After aggregating historical data — or collecting enough real-time data to constitute a reliable sample size — the platform then creates a series of both macro and micro segments based on the purchase and engagement behaviors highlighted throughout this article.

New retention campaigns, including email, onsite, and social, can then be automated into Optimove based on each segment’s activity. Once those campaigns are created, Optimove’s Optibot takes over. It not only runs tests across your various micro segments but also builds predictive models to formulate future tests as well as data-backed best practices.

By taking a holistic approach to retention, Optimove relieves many of the pain points associated with tracking and optimizing for yourself. Instead, marketers can concentrate on formulating hypotheses and new campaigns in line with the results they’ve already achieved.

Retention from Top to Bottom

Whatever tools you decide to use — and those selected in this piece are just a sampling of the many available — what really matters is orienting your approach to marketing around retention.

Acquisition is sexy, exciting, and seductive. But it pales in comparison to the ROI that retention generates.

Customer retention optimization should be the go-to strategy for growth because it’s far more effective, cheaper, and the best source of new customers. After all, loyal customers don’t just buy from you again and again, they’re your biggest brand ambassadors, evangelists, and most persuasive salespeople.

Aaron Orendorff

Previous the Editor in Chief of Shopify Plus, Aaron Orendorff is now the founder of iconiContent, where he’s busy “saving the world from bad content.” He’s also a regular contributor at Mashable, Entrepreneur, Lifehacker, Fast Company, Business Insider, Content Marketing Institute, and more. Connect with him on Twitter or Facebook.

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