Fostering Customer Loyalty in eCommerce
Loyal customers are the most valuable customers. Find out trade secrets for creating loyalty and membership programmes for eCommerce brands.
“Customer satisfaction is worthless. Customer loyalty is priceless.”
- Jeff Gitomer, Customer Loyalty Expert
As an eCommerce team leader, you’re well aware of the value of loyal customers already— but fostering real customer loyalty is something of a secret sauce. It starts with understanding your customer and what makes them loyal to certain brands.
According to Accenture, the number one factor that customers said inspires their loyalty to a brand is trustworthiness and respect of privacy. “Being there when I need them but otherwise leaving me alone,” was the second-most important factor, while “acknowledging my loyalty and importance to them” came in third.
What’s more — 1 in 3 customers are likely to spend more on products when they’re loyal to a brand.
Here are some tried and tested solutions, with advice for implementation.
Customer loyalty programs
Well-executed loyalty programs are an amazing way to encourage customer devotion. But not all programs succeed. In fact, 54% of loyalty program customers are inactive.
So what makes a loyalty program successful? One loyalty census found that customers look for three key qualities: ease of use, attractive discounts, and simplicity.
Sephora’s Beauty Insider program is one of the best examples of a successfully implemented eCommerce customer loyalty program, touted for its focus on customer experience, desired rewards, and longevity. The basic program is free of charge, firstly, and rewards members every time they spend with the company. Members are also granted exclusive access to sales. Higher tiers of the program gain even more benefits. Oh, and the company also throws in generous rewards at every turn.
Allegra Stanley, Sephora’s vice president and general manager of loyalty, says that customers are the core of Beauty Insider -- as well as everything else the company does:
“We are driven by what our customers love and want more of. So it’s not about what their loyalty demonstrates to us, but what we can deliver to our clients that creates the most meaningful and connected experience with our brands.”
Many make the mistake of confusing loyalty programs with membership programs — but they’re very different animals. Whereas a loyalty program does what it says on the tin, and rewards your customers (with points, rewards, gifts) for their continued devotion to your brand, a membership program gives your customers the chance to feel more ownership of your organization.
Along with benefits and rewards they may receive from their membership status, members are also generally on board with the brand mission. According to brand membership expert Eric D. Schoner, “Membership uses the individual’s need to be part of something bigger, to leave a legacy, to develop a loyalty that far surpasses anything a simple ‘loyalty program’ can achieve.”
Paid membership programs are, indeed, on the rise. And why not? According to Retail Prophet magazine, they “turn transient loyalty into something deeper, more committed and more monogamous,” taking the relationship between the brand and the customer “from being transactional to being transformational.”
Amazon’s Prime membership program is a perfect example of a well-executed membership program. The company closed 2019 with 112 million Prime members — and these members spend 250 percent more each year with the company than non-members.
Customer Intelligence Research Partners Co-Founder Michael Levin suggests that giving customers the choice between paying monthly and yearly made a big difference in the company’s membership numbers. However, he points out that growing interest in and acceptance of e-commerce memberships also represents a shift in cultural attitudes (read: increased trust and confidence) towards shopping online.
Ensure agents know who is a loyal customer
It’s integral that your customer service agents are also well versed on how to identify your most loyal customers, so they can make them feel like VIPs during every interaction. Let’s take a look at the signs of a loyal customer:
- They never bring up price in their engagements with your company
- They advocate for you on social media
- They leave you positive reviews
Alternatively, use a more quantifiable approach to measuring customer loyalty with the Recency, Frequency, Monetary (RFM) value method. This identifies your best customers are the ones who have purchased from you most recently (within 30 days), purchased the most frequently, and have spent the most amount of time with you.
Creating customer satisfaction is pretty easy. Building customer loyalty takes much more work. Loyalty and membership programs require a huge investment in terms of time and effort -- and sometimes cash too.
But the reward: customers who keep coming back and spending more, love your brand, and shout about it from the rooftops, makes it all so very worthwhile. Get to know which customers are loyal, and get thinking about how you can reward them for their devotion to your brand. If you can build yourself a successful loyalty or membership program full of brand advocates, you’ll be set to win the eCommerce game.
Want to learn more about how you can future-proof your eCommerce brand, while boosting customer happiness and lowering your bottom line? Download the Director’s Guide to Customer-Obsessed Support Teams in eCommerce here.
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