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