How ecommerce businesses can build brand loyalty
Tara Daly
·August 7, 2024
Sure, growth is great—but if those new customers don’t come back a second time, you may be missing value from your marketing strategy. To build a profitable business that stands the test of time, customer loyalty is key.
It costs four to five times more to acquire a new customer than to retain an existing one, and with the rising cost of online advertising, building a customer retention strategy is crucial for building a sustainable business.
“Marketing to previous customers is far cheaper than acquiring new customers,” says Tom Ross, UX Lead at Convert Digital, our Australian digital agency partner that specialises in helping ecommerce brands grow. “Being able to leverage what you know about existing customers is key to sustained ecommerce growth and profitability.”
Customer loyalty is getting harder to come by, however. SAP Emarsys’ 2023 Customer Loyalty Index found that brand loyalty had dropped from 79% to 68% over the past year. To ensure that your customers don’t shop around based on price, it’s important to build a dedicated customer loyalty strategy that spotlights the value of your brand and optimises the post-purchase experience for revenue retention.
Tom gave us Convert’s take on how ecommerce businesses can boost brand loyalty and increase their customer lifetime revenue:
Strategies for building customer loyalty
Implement loyalty programmes
“Introducing a loyalty program can incentivise repeat purchases, but they need to give true value to the customer, with loyalty program fatigue plaguing a saturated market of poorly planned and executed rewards programs”, advises Tom. Offering gifts, discounts, or special perks (like free shipping) each time a customer hits a new rewards level will encourage them to continue making repeat purchases. You can also provide reward points for referring new customers, helping you leverage the power of word-of-mouth marketing.
Use surveys and quizzes for guided selling
Get to know your customers better by encouraging them to respond to quizzes that help you understand their needs: For instance, if you’re a skincare company, quiz them about their skin type and problems to offer personalised recommendations that will suit their needs. Collecting customer information from them directly is also known as “zero-party data,” and can help you to build a more informed messaging strategy.
Deliver highly personalised marketing content
Use your customers’ zero-party data, behavioural data, and purchase history to segment them on an individual level and offer tailored recommendations and offers. For instance, if a shopper looked at a pair of trainers, but didn’t purchase them, your shop can send a “still interested in those trainers?” email with a limited-time discount offer. By sending highly relevant content that’s tied to your customers’ unique interests, you’ll be able to re-engage shoppers who might otherwise drop off.
With the right information, you can also time your content to when a customer is most likely to buy. Let’s say you’re a dog food company, and your customer has filled out a quiz that shares how many dogs she has and how large they are. Now you have the data to determine when she’ll be running low on pet food—and can send a perfectly timed reminder encouraging her to restock before she runs out.
Enhancing the customer experience
To stay top of mind with customers, it’s also critical to ensure that they have a remarkable customer experience with your brand every time.
As a merchant, showcase your value proposition throughout the buying journey, leveraging marketing automation and personalisation to ensure that the products and content you serve to your customers are relevant and impactful. “Encouraging customers to leave reviews that include user generated content like photos and videos is crucial to building social proof. Reviews can be powerful in creating trust when offering contextual information, like how a dress fitted, for example,” says Tom.
If your products are on store shelves as well as online, don’t overlook the importance of an omnichannel strategy to grow your revenue and customer retention. Your in-store and online experiences should work hand-in-hand, with tools like endless aisle, in-store kiosks, and omnichannel gift cards helping you convert in-store traffic to ecommerce shoppers.
And don’t forget about the returns process. With the ecommerce return rate running as high as 25% in certain industries, it’s important to deliver a best-in-class returns experience that will encourage shoppers to give your brand a second chance. Offering a variety of return options, including drop-off centres where shoppers can bring their unboxed returns, will help customers choose the most convenient option for them. By facilitating an Instant Exchange on Loop’s platform when a customer requests a return, you’ll be able to retain more revenue per transaction and grow your customer loyalty.
Ultimately, retaining customers for the long-term comes down to building a brand experience that they love. By providing personalised offers, incentives, and a best-in-class returns experience, you’ll be on your way to building a loyal customer base that will stick with you for the long haul.
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