Tips for Increasing E-Commerce Customer Loyalty & Retention

Every e-commerce store knows the challenge of acquiring new customers, whether it be through awareness campaigns, ad spend, or sales events. The ultimate fruit of this labor is achieving a conversion, and it’s a success you’ll want to replicate again and again with each individual customer since acquisition can be both time-consuming and costly. But implementing a successful customer loyalty and retention strategy isn’t always straightforward. How do you ensure that a customer is satisfied enough in their experience with you that they come back for more, and even recommend your store to others? There are several things to consider, including communication style, customer lifecycle, and customer experience strategies. Addressing each of these subjects will help you put a system in place to help retailers foster customer loyalty and retention.

Why do e-commerce customer loyalty & retention matter?

There are several reasons why an e-commerce store should be concerned with customer loyalty and retention. For one, it can mean the difference between a customer staying or leaving your store. Additionally, it can inform whether they make a single purchase and never return or consistently come back to buy more products from you. When a customer feels a sense of loyalty to a specific store or brand, it increases the frequency of visits to your site as well as the average time spent browsing your store. It’s also likely to create an increase in average order value (AOV) over time.

Beyond positive customer actions on-site, solid e-commerce loyalty efforts present excellent branding opportunities. The ability to cite customer satisfaction via NPS scores or user reviews or other user-generated content (UGC) can be an effective marketing tool to attract new customers. Plus, you can drum up some organic PR through word-of-mouth recommendations from satisfied customers. Enhancing your already highly-detailed product pages with rich content submitted by customers that showcases your products more easily allows prospective buyers to make well-informed decisions and more frequent purchases.

Finally, an effective retailer customer loyalty strategy can have long-term benefits for your business to help you grow over time. Those can include a stable, predictable revenue stream that can help with forecasting and planning for future growth and valuable customer insights to help you optimize product development and marketing strategies for your ideal customer profile.

Okendo's review widget feature is customizable to unique customer attributes, allowing customers to easily access reviews of users most similar to them.

Effective communication is vital to engendering loyalty

Once you’ve converted a new customer, you’ll want to be intentional about communicating with them via email and other omnichannel avenues to increase their loyalty. But remember that you’ll have to do it in such a way that it doesn’t annoy or turn the customer off. No one likes being bombarded with messages, even if they contain objectively valuable offers. Setting up a reasonable cadence that will keep your store top-of-mind without making someone want to unsubscribe. It may require some A/B testing on your part to see which messaging and frequency resonate the most. 

For messaging in particular, you can optimize the experience by ensuring your communications are tailored specifically to the customer receiving them. By delivering highly-personalized messages, you increase interest in return visits to your store and help build trust with the consumer by making them feel that their tastes and preferences are understood.

An example of e-commerce email recommendations tailored specifically to a user's taste.

How to think about retention building across different customer types

There are four general customer types to consider within a store’s customer ecosystem or lifecycle: new customers, need-based customers, discount shoppers, and loyal customers. Each of these will respond differently to your efforts to foster customer loyalty, and it’s important that you tailor your messaging or methods to whichever will work best for that particular customer.

  • New customers. The first thing you’ll want to do when a new or potential customer lands on your site is capture their email address. This is the first crucial step that allows you to enable communications and, eventually, a strategy for loyalty and retention for your retail store.
  • Need-based customers. If a user is coming to your store with something very specific in mind, either for themselves or someone else, it may be more difficult to retain that customer long-term. This type of customer has a particular need for an item, and that item may not tie directly to their tastes or preferences. While you should always make attempts to build customer loyalty, it’s important to know where to prioritize your retention efforts.
  • Discount shoppers. These customers are motivated by deals, such as Black Friday and Cyber Monday, or discounts offered for birthdays or other special occasions. When re-engaging these users, being able to effectively personalize their customer experience will increase the chances of the customer going from a bargain hunter to a loyal customer.
  • Loyal customers. While you may not have to do as much to motivate your most loyal customers to shop with you, it’s still a good idea to make them feel special by sending them unique offers and discounts. In addition to making them feel good, it can have a real positive impact on your sales as well – these customers spend 3x as much as regular ones, according to Klaviyo.

Creating personalized customer experiences to enhance loyalty

Making a retail customer experience highly curated to the individual is a major key to unlocking customer loyalty. Using technology to understand what delights and/or frustrates customers while they’re shopping can help put you into the psyche of your ideal customer profile. Unfortunately, what has traditionally been considered personalization or recommendation for e-commerce businesses is still far too broad. Deploying an out-of-the-box recommendation engine won’t be nearly as effective, because simply put, “out-of-the-box personalization” is an oxymoron. What makes personalization tick is considering the unique attributes of both a store and its customers. This degree of personalization and recommendation can have real impacts on a retailer’s bottom line, not to mention its efforts around retention and loyalty.

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Where to deploy highly personalized customer experiences

Effective personalization for improved customer experiences must be redefined in the minds of e-commerce professionals. That means going beyond static recommendation carousels that display “new” or “popular” items and really diving into what a customer is interested in, and in a variety of different locations, including but not limited to:

  • Product listing pages (PLPs)
  • Product description pages (PDPs)
  • Checkout or cart view
  • Marketing emails
  • In-app
  • Social
  • In-store

Behavior-based recommendations can be achieved by analyzing what a customer does in the e-commerce ecosystem. Clicks, likes, adds to cart, and other customer interactions should be used to deploy effective personalization. Once armed with this data, a store can and should launch recommendations wherever the customer navigates on the site, not just on the homepage. The data can also power an omnichannel approach, via email or in-app recommendations, on social media, and more. This level of personalization lays the foundation for a truly excellent customer experience that will encourage loyalty and retention.

An example of an email capture form pop-up to help foster retail customer loyalty.

Examples of customer loyalty efforts

If you’re looking for ideas on how to encourage customer loyalty and retention, check out some of the examples below.

  • Email capture with a first-time customer discount. Capturing a new customer’s email within the first several moments of their arrival will enable you to make strides in building their loyalty. A common motivator to obtaining the email address is a special discount for a first-time shopper. This capture form can be static on your homepage, or be a pop-up tied to a user’s behavior (e.g., idling on the page or navigating away from the shopping cart).
  • Personalized offers to match the lifecycle stage. Just like the recommendations you launch to your customers, the offers you send them to encourage retention should be personalized, as well. For example, a super loyal customer should get a different offer and email copy than a more dormant customer or perpetual discount hunter.
  • Highly customized views based on customer taste. The ability to provide recommendations wherever a customer navigates on your website – not just the homepage – can make customers feel more understood and eventually lead to higher AOV, as well. Recommendations should be deployed on product detail pages, product listing pages, the cart view – anywhere a customer has the opportunity to discover more items they love.
  • Rewards for social shoutouts. Encouraging customers to participate in social media campaigns shouting out your business can foster a sense of loyalty, as well. Offer rewards or discounts for participants who use a specific hashtag or tag friends in your posts.
  • Collecting feedback via reviews and surveys. This type of UGC is invaluable in making the customer feel heard and also as a means for the brand to make critical improvements. Thise feedback can also be used as rich content to help new buyers make well-informed buying decisions.
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