INSIGHTS
Beyond the Purchase: Crafting a Customer Loyalty Strategy That Sticks
Charlotte Michalanney | 13 December 2024
Growth is essential, but if new customers aren’t coming back, you might be leaving valuable opportunities on the table. Building a profitable, enduring business relies on customer loyalty.
Acquiring new customers costs five to seven times more than retaining existing ones, and with rising online advertising costs, a customer retention strategy is essential for sustainable growth.
“Marketing to previous customers is far cheaper than acquiring new customers,” explains Tom Ross, UX Lead at Convert Digital, “Leveraging what you know about existing customers is key to sustained ecommerce building better relationships and business profitability.”
However, customer loyalty is becoming more elusive. Yotpo’s Loyalty Program Benchmarks Report highlights the impact of programs on purchasing decisions - over 83% of global respondents said that being part of a loyalty program influences their decision to buy again from a brand and that nearly early 90% of consumers are willing to pay more for products from trusted brands that they feel connected to through loyalty initiatives. These stats underline the importance of loyalty programs as a tool for not just retaining customers but also driving revenue and fostering deeper emotional connections with your shoppers.
In partnership with our friends at Loop Returns, we’ve identified some of the most effective ways for ecommerce businesses to boost brand loyalty and maximise lifetime revenue.
Strategies for Building Customer Loyalty
1) Implement Loyalty Programs
Introducing a loyalty programme can incentivise repeat purchases, but programmes need to offer genuine value to stand out. In today’s saturated market, poorly planned rewards programmes can lead to “loyalty fatigue”. Instead, create meaningful perks, such as gifts, discounts, or free shipping at each new reward level, encouraging repeat purchases. You can also reward customers for referrals, transforming loyal shoppers into brand advocates and amplifying reach through word-of-mouth.
2) Use Surveys and Quizzes for Guided Selling
To get to know your customers better, encourage them to complete quizzes that help you personalise their shopping experience. For example, a skincare brand could ask questions about customers’ skin type to provide tailored product recommendations. This approach, known as “zero-party data,” enables more personalised messaging and a relevant customer experience.
3) Deliver Highly Personalised Marketing Content
Use zero-party data, behavioural insights, and purchase history to tailor recommendations and offers for each customer. Personalised, relevant content keeps customers engaged and reminds them of the unique value your brand offers. Personalisation can also include timing. For example, a pet food company could use quiz data to estimate when a customer’s pet food supply might run low, then send a timely restock reminder before they run out.
Enhancing the Customer Experience
To stay top of mind with customers, creating a remarkable experience every time they interact with your brand is vital.
Throughout the buying journey, showcase your unique value propositions, whilst using marketing automation and personalisation to ensure products and content are relevant. “Encouraging customers to leave reviews with user-generated content, such as photos and videos, builds trust and creates social proof,” says Tom. “Reviews that offer specific insights, like how a product fits, can be especially powerful.”
For brands with both online and in-store offerings, a seamless omnichannel strategy is crucial. Integrate tools like endless aisles, in-store kiosks, and omnichannel gift cards to create a unified shopping experience that creates a holistic brand experience.
Finally, a hassle-free returns process can be a game-changer. With return rates as high as 25% in some ecommerce sectors, providing a convenient and customer-friendly returns experience can encourage repeat business. Options like drop-off centres and instant exchanges, as supported by Loop’s platform, allow customers flexibility, which can ultimately retain more revenue and foster loyalty. Although, the best returns are no returns; consider spending the time to optimise your buying and size guides to reduce bracket spending and returns which have a large environmental impact.
Building long-term customer loyalty hinges on creating an exceptional brand experience. By delivering personalised offers, effective loyalty incentives, and a streamlined returns process, your ecommerce business will be well on its way to building a loyal customer base that keeps coming back.
If you need a hand crafting a customer loyalty strategy that sticks, feel free to reach out to the Convert Digital team at any time via hello@convertdigital.com.au. Thank you to Loop Returns who first published this article on their In The Loop Blog.