Predicting Customer Retention Inside Your Shopify Store

Illustration by Pablo Stanley
Words by Nirman Dave

Continuing our Guide to Machine Learning and eCommerce, we break down how to predict customer retention with machine learning inside your Shopify store.

Let’s get into it.

What Is Customer Retention?

Customer retention is the probability of your users buying again or remaining loyal to your product. Using historical data inside your Shopify store, our app automatically predicts how likely a customer is to buy again. All you need to do is click one button.

This is extremely useful for store owners who want to know which customers they need to market to and allocate marketing resources towards.

Let’s Go Through The Process Step by Step

For this post, we will focus on the question “Which customers are likely to buy again?”

Hit the check box and press “Predict” to get a report.

  1. Instantly you can see the customers most likely to buy again and the predicted probability to spend the listed amount, ranked highest to lowest. 
  1. You can also see each individual’s customer probability of buying again and have the option to email them to send them promo codes or coupons to nudge them to make a purchase.
  1. As you work your way down the report, the top factors related to the likelihood of the customer buying again. For example, taxes, tax emotions, and referring site impact the customer’s chances of buying again.

  1. As you hover over the graph, you can get a more detailed explanation of the prediction graph. 

  1. Name your report something memorable with a date, we recommend stating what you predicted to easily scroll and compare month by month. Other great names would be “Customer Retention - Q1 2020” or something like that.
  1. At the top of your report you can export your report to a CSV file to archive or share later. By hitting the “More” drop down menu, you can also refresh your report as new sales come in if you want to keep your predictions all in one updated report.
  1. At the bottom of your report, you can see your tech specs of the report. For more information on how we preprocess data and build machine learning models, read this post.

Explore Other Applications of Machine Learning in Shopify

The uses of machine learning for eCommerce doesn’t stop at sales forecasting.

Read how to predict sales forecasting and attribution.

If you’re interested in using non-eCommerce data to make predictions sign up for our Shopify waitlist here.

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