Did you know it’s more difficult to acquire a new customer than to retain an existing one? Research shows that it is 5 times more cost-effective to convert a returning customer than a new one. When you increase customer loyalty by just 5%, you can improve sales by up to 75%.
Additionally, brand loyal customers can easily turn into powerful brand advocates. In fact, 60% of brand-loyal customers report talking to friends and family about specific brands. Given that 92% of all consumers value the opinion of loved ones over any form of advertising, it’s easy to see why brand loyalty is vital.
Customer loyalty is more important than ever. Case in point, Apple, one of the most successful brands in history, has an 87% customer retention rate. Despite the controversies, premium price tag, and unpopular design choices, almost all Apple customers come back for more.
So how can ecommerce companies be like Apply and increase customer loyalty successfully?
Focus On Your Customer Experience
94% of customers report staying loyal to brands that provide a good customer experience. There are many aspects of a company’s customer experience, but in the end, they boil down to ease of use. One area where ecommerce often lags is customer service.
Customer service is one of the most important aspects of any online business. Let’s be honest; there’s a fair amount of potential for error in ecommerce. The wrong item could be shipped, an address label could be wrong, or weather could delay an item’s delivery.
Accidents are going to happen, so as the old adage goes; “plan for the worst, hope for the best.” If they don’t already, your confirmation emails and website should make it clear how/when a customer can contact you. Also, make sure to clarify your return policy. Assuming it’s not too restrictive, highlight key points to show customers your willingness to take unsatisfactory items back.
If you tend to do a good job with customer service, make sure you include references to this. Note your history of “hassle-free returns.” According to research from AlixPartners, the number one barrier to online purchasing is that customers can’t see/touch items before buying. Quell this fear by making the return process clear and simple for users to understand.
Create an Emotional Connection
According to Motista, an emotional connection to a brand increases lifetime customer value by 306%. Not only do emotionally connected customers buy more, they recommend services at a much higher rate.
So how do we create an emotional connection with customers? It’s all about proving you “get” your customers.
I know. You’re a company. You sell things. But modern customers, especially Gen Xers and Millennials, consider more than just price in their purchases.
Creating an emotional connection doesn’t have to be some sort of ethereal, spirit-quest mission.
Simply ask yourself: “How does my product create pleasure? In other words – what does it foster? Joyful moments? Togetherness? A sense of accomplishment? Run the full emotional gamut if you must, but above all, focus on the emotional response that comes with the use of your product. Obviously, don’t force it – the connection should seem natural.
The important thing is to tie your brand to a positive emotion to connect with your customers. Use this emotional response in your marketing and make present it as a feature of your product. People want to be happy – show them how your product fits into their happiness, and voila – you’ve created an emotional connection.
Reconsider Your Incentives
Everybody loves a good deal. You know that. Which is why, unless you’re Cartier, you probably offer incentives from time to time. In fact, consistent incentives have been shown in numerous studies to play a key role in customer loyalty. That being said, it’s important to ensure you’re offering something the customer actually wants.
I’ll put it bluntly; people hate paying for shipping. According to research by AlixPartners, shipping costs were one of the most commonly reported reasons for cart abandonment. In fact, shipping costs were 276% more likely to spur abandonment than product prices. This is especially true for holidays, since customers are often buying multiple gifts at once. All that being said, data shows that item price discounts can still be very effective, especially when used strategically. However, if you’re considering either a small discount or free shipping – free shipping is likely your best bet.
Stand “Buy” Me
These ways to increase customer loyalty are powerful and cost-effective ways to grow your business. While the building blocks to increase customer loyalty have changed over the years, this tool is an incredible – and vital – aspect of brand building in the digital age.
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