Customer loyalty is falling more and more in the e-commerce sector. Here are three valuable tips for designing the UX in such a way that users return to you.
The year is 2022, and it looks like the pandemic is ending after more than two years. But the world is still upside down. Whether it is the uncertain global situation or not, brands are experiencing more of a fall in customer loyalty. This phenomenon is observed even in countries like the US, where consumers are considered loyal. Only 16 percent of citizens are “loyal” to a brand.
Eighty-eight percent of US customers have bought at least once on Amazon and eBay. What do these companies do better than other online stores we purchases? What do these players do better than our local stores, whither we have been loyal for decades?
These companies are working on new standards to improve customer experience to lead the customer loyalty, which local stores cannot live up to. Loyalty will develop as buying on one of the marketplaces is easier.
Data protection makes customer loyalty more difficult.
Data protection standards are also rising. How can a company manage to work customer-centrically if the available customer data is limited, especially in “third-party data”?
Gartner predicts that by 2023, more than 65 percent of global Internet users will consolidate under one global privacy umbrella; it is an excellent indication that change is imminent. Whether companies like this change or not: It goes from “How do they know all this about me?” to “Perfect, they send me exciting products based on the preferences I have willingly offered – what a great service!”
Simultaneously, the use of mobile devices and applications continues to gain momentum. Especially when it comes to making small, recurring purchases, mobile devices are far ahead. A study by Capterra reveals that 79 percent of users in the US already use mobile devices for online purchases.
According to Forrester, 58 percent of all European retail sales will emerge via mobile devices by 2024. Therefore, the focus on mobile must always be assured, no matter how you present your offer or communicate with customers.
3 Ways to Build Customer Loyalty
After working with some of the largest e-commerce and retail companies in Germany, Austria, and Switzerland, I have observed three ways companies can build, maintain and reinforce customer loyalty. You will have already read many buzzwords so I will limit the only essentials and new developments.
1. Look for a seamless omnichannel experience.
Omnichannel experience – the buzzword has been haunting online marketing in Germany. Why do so many companies fail, and what is the omnichannel experience?
For a brand to maximize the positive impact, such as a loyalty program, it must make it as easy as possible for customers to collect and redeem points. The collection and the experience must work on all channels available to customers.
Today, customers expect brands to be able to interact with them. The average customer uses four channels the search for information, the purchase, and the use of services after the purchase. Only if coherent communication across all channels is possible the customer feels connected to the brand and develops loyalty; seamless omnichannel experiences mean this. But how do we achieve this, and above all: Where do we start?
Start with Post Purchase
The post-purchase stage is a good starting point: it gives brands the perfect opportunity to unify, for example, to deliver digital follow-ups after a purchase. Customers who have made an online purchase can be addressed with relevant products to the previously purchased, regardless of channel. Either online (push notifications, e-mails) or offline (print mailings).
Even if customers do not purchase, omnichannel reminders (such as in-app push notifications, shopping cart wishlists, e-mails, or welcome campaigns) can keep customers interested and engaged. So the most important thing for brands is to bring the online and offline experience together.
For example: After the purchase, the send and upload of the receipt bring loyalty points and advantages for both retailers and customers; Therefore, it is a simple solution to a complex problem. It can also lead to better product suggestions and more conversions at the end of the day.
In addition to the classic transactional incentives, several gamified incentives are now to bridge the omnichannel connection. Satoshi Lab, for example, has developed a “move2earn” mobile game that enables retailers to transform the experiences made with a product into an NFT. It brings an emotional dimension to loyalty programs and will undoubtedly play a significant role in the future.
2. Increase the value of the customer relationship through personalized rewards
The most important question companies have asked themselves in recent decades is: How to increase customer value in the life cycle? There are many approaches here, such as complex AI-controlled analyses of whether we should send a reactivation voucher after 90 days or grant individual customers a 20 or 30 percent discount. All these measures have one thing in common: sometimes they help, sometimes they don’t.
So what other approaches are there through loyalty programs?
Using Loyalty programs tools, retailers can massively increase the chances of repeat purchases. In addition, it increases the number of customers. The reason is simple: loyalty programs help with personalization, which ensures more sales with better product recommendations and customer experience.
While a loyalty program in which the accumulated points do not match the redeemable rewards is initially too critical, this can trigger a negative domino effect and lead to customers reorienting themselves. Consequently, it is essential to strategically build up the loyalty program to achieve added value for customers realistically.
A “You may like this” campaign that uses behavioral data performs significantly better than a generic campaign. For example, if a customer has searched for the shoe of a particular brand, more options may include “You may like this” this leads to the question: How do I encourage customers to buy, and how do I manage to increase the value in the customer life cycle?
#Example, Loyalty programs offer an answer. Instead of offering customers a discount of 20 percent and avoiding margin loss, they suggest, for example, the opportunity to achieve the conversion via the “With this purchase, you will reach the next status” encouragement; it is a proven way of influencing, especially in recent years. Dynamic gamification – by e-mail or in the app – can be the key to more engagement here.
3. Collect valuable data through the loyalty program
We have highlighted two points allowing brands to advertise the right products at the right moment. However, personalization should not stop with the product but should generally offer added value for the customer.
Brands have used the past few years to create the technical prerequisites for 360-degree profiles. Customer data platforms and APIs have, and the basic framework is in place. So how can these investments lead to more sales?
The secret behind personalizing content and the associated increase in sales is first- and zero-party data. Loyalty programs that combine valuable data collection with the simultaneous delivery of relevant content will lead to the most long-term and beneficial customer relationships.
First-party data is data you generate based on your customers’ actions, for example, if a customer cancels a purchase from the shopping cart. The term zero-party data describes data that a customer proactively and voluntarily shares with a company.
No matter how you collect this data, zero- and first-party data is immensely important to achieve a better customer experience and improve interaction and purchase rates through personalization.
An easy way to finally fill the 360-degree profiles with valuable customer data is to integrate surveys into the communication strategy (social media, e-mail, in-app). So-called polling is one of the most effective ways to generate zero-party data and inserts a conversational element between the brand and the clientele.
Brands that have defined and implemented exciting and cohesive omnichannel experiences as an elementary part of their strategy have the most excellent chances of ensuring loyalty despite declining brand loyalty trends. Here, it is elementary to consider the customers’ value before looking at one’s advantages.