Improving customer loyalty: Five tips for the eCommerce sector
Acquiring new customers is expensive — this is why nurturing existing customers and investing sufficient resources in customer loyalty is all the more important. This can be achieved in many ways — from tried-and-tested discount and cashback promotions to the use of innovative technologies such as artificial intelligence.
This is why customer loyalty is so important
Customer loyalty is one of the most important tools for increasing company sales in the long term. Satisfied customers not only buy more often, they also buy more, react less sensitively to price changes, are more tolerant in the event of problems, and share their experiences with acquaintances, family, and with the public on the Internet. This means that strong customer loyalty also promotes acquisition.
Retaining customers is significantly easier and less expensive than acquiring new customers. This is because customers have more confidence in a company with whom they have had a positive experience in the past. At the same time, the company can respond better to the individual wishes and interests of customers if they have previously visited the store and made purchases there several times.
Tip 1: Reward loyal customers
Rewards are a simple and effective means of communicating to customers that you value their loyalty, but also to encourage further purchases. The possibilities range from discounts to test products and giveaways, right through to thank-you cards.
Every customer appreciates a discount. However, not every type of discount is equally suitable for achieving a truly sustainable bond. Permanent discount campaigns that every potential buyer can take advantage of are not advisable. After a while, customers expect a certain price and only buy when there are corresponding discounts. Better suited are for example:
- Vouchers and coupons as a small token of thanks for purchases made. This rewards the customers who have, so to speak, earned it.
- Bonus programs with loyalty points, where customers get a partial return on their spending in the form of bonus points, which can then be collected and redeemed for rewards.
- Instant bonuses. Bonus programs such as Cashback give customers a certain percentage of their spending back immediately after making a purchase instead of loyalty points, which first have to be collected and converted.
But rewards do not have to be financial. Customers are just as happy to receive authentic thank-you and holiday greeting cards with personalized addresses, as well as free giveaways as a surprise with their order.
Tip 2: Create trust – with trust signals and social proof
Trust is important, especially in eCommerce. However, it is often difficult for customers to judge the trustworthiness of an online retailer they are unfamiliar with. That’s why it’s important to place the relevant information on the company’s website and in the online store. These are known as Trust Signals and Social Proof.
Typical trust signals are seals of approval from well-known independent testing authorities that give customers a sense of security. These include the TÜV seal and the Trusted Shops seal. You should make these seals clearly visible on the homepage, on subpages and in the store, because not every website visit starts on the homepage.
Authentic customer reviews are just as confidence-inspiring. A study conducted in Germany regarding the importance of online reviews shows that 74% of all respondents always or frequently read reviews from other shoppers before making a purchase — and they even trust these reviews more than recommendations from friends and acquaintances.
This feedback option is often omitted for fear of negative reviews. This is a mistake, because satisfied customers are more likely to leave reviews than dissatisfied ones. In addition, a bad review is always a chance to prove that you take customer feedback seriously by responding to the reviews. This greatly enhances the credibility of the company and at the same time protects against reputational damage.
Here are a few more examples of Trust Signals and Social Proof:
- Objective test reports about products and services offered
- Information about the number of views and orders of a product
- Information about the number of fans and followers on social networks
- Information about encrypted data transmission
- Prizes and awards received
Tip 3: Personalized content and offers
Personalization is one of the major eCommerce trends. It has been around for years — and continues to gain in importance. Addressing customers on a personal level gives them a positive feeling. This increases sales opportunities enormously. Particularly good results are achieved, for example, by addressing customers personally (in the store, in newsletters, on thank-you cards, etc.) and with personalized product recommendations, such as:
- As a package insert
- In order confirmations
- In the wish lists and shopping carts of the customer profile
- In the product feeds of the store
- As alternative suggestions for sold out items
- In the form of product bundles
The prerequisite for personalization is, of course, data about the customers, the purchases they have made and their wish list entries, as well as their usage behavior when browsing the store. This information provides valuable Customer Insights and enables the development of individual sales strategies. In online stores, this data can be collected, analyzed and processed using special software tools — often even fully automated.
Tip 4: Improving customer service
A customer usually contacts the support service if there is a problem. This is why one must do everything possible to offer the customer immediate professional help and advice, because poor customer service is the final nail in the coffin when it comes to customer loyalty. If, on the other hand, support is well organized, it can mean the difference between losing a current customer or keeping a satisfied one.
Numerous studies show that response time is one of the most important factors in restoring customer satisfaction. This refers to the amount of time that elapses before the customer receives a response to his message. Whether this response was able to resolve the problem or not is not important at this stage.
It is therefore important to respond quickly. However, this does not mean that every company has to offer 24-hour customer support. As a rule, it is perfectly acceptable to inform customers about which channels and at what times a contact person can be reached and how long they can expect to wait for a response. The important thing is to be honest — even if an answer might take a few days.
Here are a few more suggestions:
- FAQ pages and video tutorials offer customers a source of answers to frequently asked questions and thus relieve the burden on customer support, in some cases considerably.
- A large selection of communication channels (for instance phone, email, chat, social media, FAQs, etc.) accommodate customers’ usage habits and thus also provides the service that the respective customer really wants.
- Chatbots can be used as a temporary replacement for personal contacts outside of customer service hours. For example, to answer customer questions, book appointments or document the facts for a personal contact. Thanks to artificial intelligence, the range of services offered by chatbots is expanding and improving rapidly.
- Another effective way to provide customer support is via live chats. The advantage is that chatting is faster than writing emails. It also enables the support staff to provide assistance to several customers at the same time.
Tip 5: Collecting feedback
It is a quite unrealistic to believe that you will never lose any customers — even if you do everything right. But the better the products and services offered, the more likely it is that customers will not turn away from the company. That’s why it is so important to continuously enhance your own performance — true to the motto: There is always room for improvement!
When it comes to pinpointing one’s own weaknesses and shortcomings, engaging with customers is worth its weight in gold. That’s why, whenever possible, you should take the opportunity after every purchase to obtain feedback — for example, on how satisfactory
- the ordering process,
- the payment process,
- delivery by the supplier,
- the product or service,
- as well as communication with the company
were for the customer. In some cases, criticism may sound very negative or even unfair, but it should always be taken seriously. After all, it gives you the opportunity to do something better in the future, to lose fewer customers and to increase sales in the long term.
Particular importance should therefore be attached to the opinions of dissatisfied customers. If a customer decides to delete his customer profile or cancel a newsletter subscription, this is not accidental. You should always kindly ask for a reason and thank the customer directly for his or her input to show that you want to improve your service offering. After all, some customers do come back at some point.