increasing customer loyalty

6 Ways eCommerce Stores Are Increasing Customer Loyalty

Why is customer loyalty so important?

Convincing a new customer to buy your products or services is a lot harder than persuading those that have prior experience with your brand.

In fact, the Gartner Group found that 20% of loyal customers make up 80% of a businesses’ profits. Another study found that a 5% increase in customer retention increases business profits by 25% to 95%.

While customer acquisition is important to ecommerce stores, it’s more cost-effective to focus on retaining the users that you already have. Research found that getting a new customer is up to five times more expensive than retaining and existing one.

Having said that, how can your ecommerce store boost loyalty? How can you retain your current customers? Here’s what you need to know:

1. Fast & easy multi-channel transactions

Make it easy for brand advocates to order their product through mobile, online or in-store.

Use a chatbot or a sales rep to immediately answer customer inquiries. Create an app that lets customers repurchase the items that they regularly buy.

For instance, Domino’s loyalty program implements a multi-channel transaction plan. Customers can make orders through the app, phone calls, takeout, tweets, Amazon Echo or Google Assistant — and earn loyalty program rewards too.

dominos increasing customer loyalty

Why it works? A lot of customers crave pizza out-of-the-blue. Their multi-channel loyalty program enables customers to make a quick and easy order regardless of the channel that is available to them.

2. Offer a Discount or Promo

Discounts or promos may lead to an unsustainable race to the bottom but you can use it to reward loyalty.

If customers bought a product, then encourage them to make another purchase through a 10% discount or coupon. This gets them in the habit of making repeat purchases and helps establish a long-term business relationship.

Market Wired discovered that giving a discount that’s more than 20% leads to a 54% chance for a second purchase. It’s a reasonable investment for customer loyalty and continuous purchases.

For instance, Etsy thanks customers for their purchase and offers customers $2 off to encourage another transaction.

etsy increasing customer loyalty

This small gesture helps the brand build relationships and encourages its customers to return to the store soon.

Similar to Etsy, you don’t have to give a big discount every time. Experiment with smaller offerings like a $10 off or a 5% off discounts and see the results.

3. Implement a loyalty program

Loyalty programs reward current customers for their purchases – and they’re very effective too.

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A study found that 79% of customers look for loyalty or rewards programs and 74% choose a store based on a strong loyalty or discount program.

Having a loyalty program not only boosts your profit, but it’s also more cost-efficient than customer acquisition.

The most popular loyalty programs have a tiered rewards structure.

For example, Sephora’s rewards program consists of Insider, VIB and Rouge.

The Insider tier gives customers a point for every dollar spent, birthday gifts, seasonal savings, rewards bazaar perks, trial products and one-of-a-kind experiences.

Meanwhile, the VIB tier and Rogue tier let customers get more points for every dollar spent. They also enjoy free standard shipping, early access to products, tier-celebration gifts, full-sized products among many others.

increasing customer loyalty - sephora loyalty program

A tiered rewards structure encourages customers to keep spending so that they can enjoy more perks. It also gets them to remain loyal and stay away from the competition because of the chance to earn points.

4. Place reviews in your eCommerce stores

A good product page can make customers interested—but product reviews seal the deal.

Shoppers rely on reviews from past customers since the product isn’t available in a physical or tangible form. The comments from those who have prior experience with the brand are the basis for their purchase decision.

A study found that 87% of consumers place as much trust in product reviews as they would place in word-of-mouth recommendations. A PowerReviews study also discovered that more than 86 percent of consumers find that reviews are essential to purchase decisions, and 56 percent of shoppers specifically seek out websites with reviews.

increasing customer loyalty with reviews

In short, leverage reviews in each of your product pages.

eCommerce giant Amazon has become widely successful because their product pages have hundreds of reviews and star ratings. Consumers can even rate and arrange reviews based on the “most recent” or the “most helpful”.

increasing customer loyalty - amazon

5. Reward customers for referrals

Customers love to talk about your brand, especially if they have positive experiences while using it. So imagine how many referrals you can get when customers are rewarded for it!

Referrals are one of the best ways you can get more customers.

Research found that 49% of U.S. consumers say friends and family are their top sources of brand awareness. Meanwhile, 65% of social media users learn about brands, products and services through social networks and 70% of users hear about their friends’ and colleagues’ experiences by using those products and services.

Word-of-mouth recommendations are common because people love to spread the word about a brand or product they love. Consumers also trust the recommendations of people within their network, as compared to sponsored ads.

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For example, Uber relied on referral marketing to promote their business in different countries.

uber increasing customer loyalty

Everyone with an Uber account can share their personal invite code to friends and family then get rewarded on their first trip. Additionally, when new drivers complete a set number of trips they can also avail of rewards.

By creating referral programs, you incentivize customers to spread the word about your brand.

6. Web push notifications

Web push notifications let marketers send timely and relevant updates about product promotions, offers, updates and discounts. Since a lot of your customers are not on your store all the time and could be on-the-go, they have become of the most promising channels for customer engagement.

In fact, multiple studies found that web push notifications can boost a store’s customer engagement rate as much as a notification would for a mobile app – that’s almost 88%. Stores using web push notifications got 3X higher click throughs as compared to email promotions and almost 126X ROI. But just like the other marketing channels, your web push campaigns need to be well strategised too.

You can use web push to recover abandoned carts, promote new products, notify customers of ongoing sales, promote your loyalty program or even send them a little nudge when they haven’t been to your store for a very long time. Some brands use push notifications to deliver special offers, location-based promotions, weather based targeting and reminders to inactive users.

For example, here’s how Steiner Sports uses web push notifications to promote their popular products and ongoing sales to hook the customer’s interest and bring them back.

Summary: How to Increase Customer Loyalty For Your eCommerce Store

Customer loyalty is essential for a thriving eCommerce store. The most successful businesses have managed to build a loyal fanbase of customers that are always ready to buy their product.

Having said that, there’s a lot of campaigns you can launch to build loyalty in the long-term.

Create a referral program and loyalty program to motivate and reward your brand advocates. Build an app or enable multi-channel transactions that make it easy for customers to buy your product. Place reviews in your eCommerce store for faster purchase decision. If there’s not many profits during the season, then offer promos or discounts.

Increasing customer loyalty will undoubtedly increase your profitability. A business thrives when there’s lots of people making purchases. Have fun creating customer loyalty campaigns!

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This guest post was written by Monique Danao, who is a writer for CandyBar and ReferralCandy, a software that enables online stores to create customer referral programs to drive more sales. 

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