How to Increase Customer Loyalty in Retail

How to Increase Customer Loyalty in Retail

There is one common misconception that often leads marketers off. Customer loyalty is more than just satisfaction. A satisfied customer may have positive recollections of shopping at a certain brand, yet won’t be inclined to buy again. Loyalty starts when a customer returns to make another purchase even if other brands offer lower prices or a more convenient location, to name just a few factors. The secret sauce of their decision making? It’s their experience during every ‘moment of truth’, from subscribing to price alerts to checking out their first order.

Today’s retail brands have to recognize this subtle difference in order to grow their business both vertically by selling more to existing customers, and horizontally by expanding their customer base. Luckily, the industry provides a wealth of cases to learn from. Based on best practices of web app development for retailers, the following overview should suggest a few ideas on how to retain customers and ignite their loyalty.

Why bother?

Today, shoppers increasingly differentiate retailers by customer experience as they are looking for superb service both during and after a purchase. They want to feel cared for, and this truly becomes a solid competitive advantage for brands looking to survive in today’s heavily populated retail market.

Gartner believes customer experience will become a major battleground for competing brands in the next two years. Those who fail will likely see customer churn of up to 67% according to Kolsky, let alone the costs related to settling down bad experience issues. And bad experience lives much longer than a positive one, spreading across public review websites and social media. Would you want your house to catch this fire?

Bad experience aside, the cost of retaining a customer is lower than acquiring a new one. This can play out in numerous ways. One of the key advocates of sensible customer experience management, Bruce Temkin pointed out that loyal customers are 5 times more likely to purchase again and 4 times more likely to recommend the brand to others. This can become the source of a natural business growth, with each new referred customer costing less and less.

To build sustainable relationships, brands need to bring together their strategic thinking and technological prowess. These are two essential elements of competitiveness, where the latter means taking the digital channel to a new level of customer service and engagement.

Make customer journeys seamless

To win the heart of a connected consumer, it’s necessary to ensure they will switch from one device to another seamlessly. This requires delivering consistent experience across channels and even across different shopping platforms within one channel. This approach is supported with market statistics: as stated by Aberdeen Group, 89% customers on average stay with the brand due to this brand’s strong omni-channel strategy.

One of the successful examples of this approach is Sleepers in Seattle, a US furniture store. The company successfully merged two ecommerce websites that offered parallel shopping with a shared shopping cart for each customer who could now switch back and forth between the sites and complete their purchase at any of them. Coupled with the opportunity to render and customize any furniture item from the catalog in the online design center, this helped the company to boost sales and stand out in online retail competition.

Study your customers’ individuality

One of the little luxuries that small businesses can afford is knowing each of their customers personally, especially as they mostly operate locally and are tightly connected with their area and community. In this light, their eCommerce websites can become more than web applications but powerful hubs for building and retaining customer relationships.

Integrated with customer data management solutions, be it a CRM system or some custom-made software, online stores will generate valuable insights about customer behavior and purchasing habits. Based on such rich details, small retail brands could both tailor their digital communication to a customer’s persona and come up with truly value-adding offers that will appeal to that customer’s most.

Focus on emotions

Expectations are growing, customers are getting more demanding, and their purchasing – more impulsive. They make their decisions more and more relying on emotions than reason, and earning loyalty is now also about provoking a strong emotional response. In this regard, loyalty and engagement go hand in hand.

For small businesses that are not ready to pay through the nose for dashing advertising campaigns, there is an option to provide their customers with as much freedom as possible, to invite them to become co-makers of the end product. Technologically, this takes us in the field of clever web applications with advanced customization options where customers could choose their preferred product configuration and customize it according to their taste.

Make it a dialog

Supporting two-way communication is crucial for successful engagement. From personalized push notifications to pop-ups that talk directly to the website visitor, his or her browsing experience becomes less detached and more like a conversation. Online shopping platforms that support sign-ups also remember registered users’ names, so why not use it to kick off a personal conversation?

Another important component of the entire loyalty-related campaigning is asking for customers’ feedback. Since satisfaction is a part of loyalty building indeed, tapping into customers’ ups and downs helps to bridge gaps, if any, and prevent the same problems in the future. Satisfaction surveys should be neither annoying nor ‘straight in the face’, still they should conclude every meaningful transaction between a customer and the store.

Make sure you’re always there

Never leave customers out in the cold. The more complex and functionally rich your digital outlets become, the more chances customers will want to get assistance to make the most out of the offering. For this, integrated customer support is indispensable. Make sure to provide versatile support channels, including a call center, email, live chat and the brand’s social pages. Self-service portals also become a number-one option among the new generation of customers, so don’t overlook this opportunity either.

And remember, digital experience is only one side of the coin. Customer experience in general extends beyond it, and if you happen to be a brick-and-click retailer, physical locations should live up and deliver on the same promises that your digital outlets do.

Maria Marinina

How to Increase Customer Loyalty in Retail
Maria Marinina November 12, 2015
  • Anna Carter

    You’re so right about learning the individual behind the customer, as well as opening up two-way dialogue.
    There’s something fake about a company that sends you a copy and paste ‘happy birthday’ text or email. When it’s obviously it’s a balloon and flowers template received by thousands, I ignore it. But my local coffee shops which collects information from regulars, gives you a treat on your birthday and it’s usually the item you order the most.
    As for the two-way conversation, I don’t mind interacting with apps or websites that have pop-up windows, especially when I really need help.

    • Allison

      I dislike those template emails because they feel detached and impersonal. My local investment firm sends personalized messages and even small tokens if you visit close to your birthday. I went there on my birthday once, and my rep told me ‘happy birthday’ before we even started our meeting. They know my name, banking/investment preferences and goals and that attention to detail is why I remain loyal.
      I don’t mind when businesses collect my personal details if it improves the quality of the service they offer. More individualised service increases how much I spend, plus my loyalty to that business.

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