Customer Retention & Loyalty Programs for E-Commerce

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30 flashcards covering definitions, formulas, metrics, strategies, program types, and real-life case studies from the lecture on e-commerce customer retention and loyalty programs.

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29 Terms

1
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What is customer retention in e-commerce?

It is a brand’s ability to keep customers loyal and prevent them from churning, defecting to competitors, or becoming inactive (repeat business).

2
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Name three reasons customer retention is significant for an e-commerce firm.

It increases ROI, reduces Customer Acquisition Costs (CAC), and boosts Customer Lifetime Value (CLV). (Other valid answers: promotes word-of-mouth marketing, acquires new customers, focuses on growth, boosts loyalty).

3
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Which metric shows the percentage of customers a business kept during a specific period?

Customer Retention Rate (CRR).

4
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Provide the formula for calculating the retention rate.

[(Customers at End – New Customers) ÷ Customers at Start] × 100.

5
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If you start with 100 customers, add 30 new ones, and end with 110, what is your retention rate?

80% retention rate.

6
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Which metric measures the percentage of customers who leave during a certain period?

Customer Churn Rate.

7
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Give the formula for churn rate.

(Lost Customers ÷ Customers at Start) × 100.

8
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Starting with 200 customers and losing 30, what is the churn rate?

15% churn rate.

9
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What does CLV stand for and what does it estimate?

Customer Lifetime Value; it estimates the total value a customer brings over their relationship with a company.

10
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Which metric captures how satisfied a customer is with a product or service?

Customer Satisfaction Score (CSAT).

11
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What does NPS measure?

Net Promoter Score measures customer loyalty, satisfaction, and enthusiasm toward a brand.

12
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Which metric gauges how much effort a customer thinks it took to make a purchase?

Customer Effort Score (CES).

13
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Define Repeat Purchase Rate (RPR).

The percentage of existing customers who make an additional purchase during a specific period.

14
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Give one real-life e-commerce brand that exemplifies personalized communication.

Shopee uses personalized communication to boost retention.

15
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Which Philippine brand is cited for exceptional customer service?

Zalora Philippines.

16
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Consistent branding and community building are illustrated by which brand example?

Sunnies Studios.

17
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State the primary goal of an e-commerce loyalty program.

To strengthen customer loyalty by offering exclusive rewards and benefits that encourage repeat purchases, boost engagement, and maximize CLV.

18
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List three benefits of loyalty programs mentioned in the notes.

They increase repurchase rate, decrease acquisition costs (via referrals), and raise customer engagement & CLTV. (Other benefits: higher AOV, brand differentiation).

19
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What type of loyalty program lets customers redeem accumulated points for discounts or freebies?

Point-based loyalty program.

20
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Which loyalty program type rewards customers as they climb different levels based on spending or engagement?

Tiered loyalty program.

21
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What distinguishes a paid (subscription-based) loyalty program?

Customers pay a fee to access exclusive benefits such as special discounts, free shipping, or early access to sales.

22
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Which loyalty program type offers a percentage of the purchase back as cash or store credit?

Cashback or store credit loyalty program.

23
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How does a value-based loyalty program build emotional connections?

It aligns brand and customer values by donating revenue or supporting social causes instead of offering traditional rewards.

24
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What are the three tiers of Sephora’s Beauty Insider program?

Beauty Insider (free), VIB (spend $350/yr), and Rouge (spend $1,000/yr).

25
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Name two key features of Sephora’s Beauty Insider program that drive engagement.

Personalized product recommendations and points redeemable in the Rewards Bazaar (also acceptable: exclusive perks, active community, omnichannel experience).

26
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How many members does Sephora’s Beauty Insider have in North America, and what share of sales do they drive?

17+ million members, contributing about 80% of Sephora’s total sales.

27
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What is Amazon Prime’s annual fee and primary objective?

$139 per year; its objective is to boost retention and repeat purchases via a value-packed paid membership.

28
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Give three bundled benefits included in Amazon Prime.

Fast free shipping, Prime Video (exclusive content), and member-only deals/perks (others: Prime Music, Prime Reading, Grubhub+, Prime Gaming, Rx savings).

29
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How many global members does Amazon Prime have?

Over 200 million members worldwide.