How to earn genuine customer loyalty.
It’s a well-known fact that retaining existing customers is less costly than acquiring new ones. Both activities are equally important to grow a robust and profitable customer base, but as well as a lower cost of sale, repeat customers also represent higher customer lifetime value. And the closer to advocacy that your customers get, you’ll be rewarded with an elevated brand reputation and lower blended acquisition costs.
BACK TO BASICS.
The journey from new customer through to advocate is fuelled by brand trust and likeability – the more your customers trust your brand, the less likely they are to consider alternatives and potentially default to your competitors.
Salesforce recently conducted research among 7,000 online shoppers globally and aggregated the results to define the top five drivers for retailer loyalty:
Cheapest prices
Speed of delivery
Availability of items
Easy payment options
Good returns policy.
Arguably these are hygiene factors that you need to get right to remain competitive and deliver positive customer experiences throughout the purchase cycle. A well-defined customer strategy should focus on all touchpoints of the customer journey, identifying any pain-points that need addressing.
Your systems and processes should work to guarantee that each of these customer expectations are met. Every time. Consistency is key, and only when you have earned customer trust will you find yourself in a strong position to build on this with more tactical initiatives for driving retention...
THE VALUE EXCHANGE.
Your retention strategy should consider how to offer additional value to your customers. Understanding what ‘value’ means in the context of your business is crucial. There is no one-size-fits-all approach, and to develop the most effective retention strategy for your business, it must be insight-led.
Interrogation of your customer data will build a profile of your different customer groups, their motivations for shopping with you and any patterns in their shopping behaviour. This insight will then help you identify any commercial opportunities directly associated with each respective customer group.
LET’S GET PERSONAL.
Personalisation will likely be the centrepiece of your retention strategy – personalisation of content, of communications and of the customer journey. Relevance is so important. It removes unwanted noise, builds trust and paves the way for developing longer-term customer relationships.
Technology is often the quickest route to delivering personalised experiences across digital channels, though be careful not to rely too heavily on it – if the logic used to drive it is too basic, or simply left to its own devices it has the potential to frustrate customers and ultimately lead to brand abandonment.
KEEP IT SIMPLE (FOR YOUR CUSTOMERS).
Simplification of the purchase experience is also key to driving retention. A streamlined UX that offers rich brand content and a fast route to checkout will improve site conversion. As will minimal data entry. But a logged-in experience that understands your customers' preferences and makes it even easier to repurchase will boost retention rates.
If you have a high purchase frequency then you (and your customers) will likely find value in a subscription service. While the value exchange here is simplicity – removing the need to (remember to) order again before running out – you must be careful not to take away choice or control from the customer. If they are unable to subscribe on their own terms (choice of product or frequency / ease of cancellation) then you may risk losing their trust and ultimately their custom.
A LOYALTY PROGRAM FOR YOU AND YOUR CUSTOMERS.
One of the most common initiatives to drive retention is the loyalty program. Loyalty programs are developed as a mechanism for rewarding customers that regularly engage with your brand. They exist in a variety of formats, and the most appropriate one for your business will really depend on what your objectives for the program are.
Coalition programs exist primarily to acquire new customers from participating brands, whereas single-brand loyalty programs aim to drive repeat purchases from an existing customer base. Points-based programs are relatively easy to implement with 3rd party app technology – a white label solution that allows you to configure and deploy all elements of a program for a monthly fee. Though make sure your customers can easily calculate the value of a point and understand the ‘earning and burning’ process - or you will risk confusing and losing them.
Whatever the mechanism you choose for your loyalty program, it’s the benefits and rewards that will likely most interest your customers. So make sure you know what you are offering to your customers and why… transactional benefits (free delivery, % discount, exclusive products...) are great for driving that next purchase, whereas experiential benefits (event invitations, seasonal gifts, closed forums...) will really help to create a sense of exclusivity and that all important emotional connection with your brand!
Building trust in your brand and earning customer loyalty is multi-faceted. All parts of your business (ecommerce, marketing, operations, customer service) must work together efficiently and effectively to deliver a seamless customer experience.
I CAN HELP YOU:
Audit your processes and technology to better understand how they impact on customer experience and areas for improvement
Define a retention strategy that aligns the needs of your business and your customers to drive genuine loyalty and a higher volume of repeat purchases.
Please feel free to contact me for more information or just an informal chat.