Today ecommerce sales account for 14.1 percent of total retail sales worldwide, and that number keeps increasing. The barriers to entry have never been lower, and acquisition costs continue to rise. However, whether online or offline - acquiring a new customer costs five times more than retaining an existing one. Investing in customer loyalty and retention helps you to build longer-lasting relationships that increase customer lifetime value and ultimately, result in higher revenue. This is why customer loyalty must sit at the heart of ecommerce marketing.
So how can you foster loyalty to boost your customer’s lifetime value? Our friends at LoyaltyLion have put together some tips on optimizing retention at each step of your customer journey.
Turn guest shoppers into loyal members
Members generate between 12 and 18% more revenue per year than guest shoppers. Once a shopper has created an account, you can unlock insights about their individual buying behavior and deliver more personalized communications. This will help you to build longer-lasting relationships whilst also making your email marketing more powerful.
To encourage shoppers to become members, you can incentivize account creation with loyalty points or offer a discount on their first order. However, keep in mind that 78% of shoppers are motivated to create an account if the sign-up process is easy. Ensure they complete the registration with a simple form that only requires basic information.
Focus on your repeat customers
Your future success depends on your existing customers, and they want to be rewarded for their loyalty. Our recent research showed that 79% of shoppers are willing to become loyal to a brand if they can access exclusive benefits or rewards.
Encourage shoppers to become repeat customers by creating a tiered loyalty program structure that offers them the opportunity to unlock more exclusive rewards and perks with each purchase. With increasing rewards and status, customers will experience an ultimate feeling of exclusivity. This approach motivates and incentivizes customers to return and repeat purchase in order to reap greater benefits.
For instance, to encourage repeat purchases and further, you can offer customers in higher tiers experiential rewards such as early access to new collections or exclusive events.
You can even take this approach to another level by including VIP tiers with extra special rewards or creating a subscriber tier that customers have to pay to access.
Encourage loyal customers to become brand advocates
92% of consumers trust recommendations from people they know, and this highly influences their purchasing decisions.
Through your loyalty program, you can easily implement a referral strategy. For instance, you can offer a two-sided incentive: encourage your customers to make a referral by offering them loyalty points. And, to convert the referred friend into a purchase and perhaps even a new member, offer them the opportunity to earn additional points or on their first purchase.
Remember that reviews also act as a trust symbol online. Leverage your user-generated content by awarding your customers with loyalty points each time they leave a review. You can also set up an automated email for those customers who have already left a review and you know are feeling good about your brand, and motivate them to make a referral in return for loyalty points.
Re-engage with your at-risk customers
Your at-risk customers - i.e. those who haven’t returned to repeat purchase in the time frame you expected - might need more encouragement to come back than your repeat customers.
To remind them to return to your store, you can send them personalized loyalty emails about available rewards that they have waiting for them, or remind them of the exclusive benefits that they can access. This will make them feel valued. To surprise and delight them further, you can also offer them bonus points or access to a higher tier on their birthdays.
Consider creating a sense of urgency when communicating with at-risk customers, to bring them back to your store sooner. Consumers are often spurred into action by the idea that they are avoiding losses rather than acquiring gains. For instance, you can use points expiry emails that show a specific time and date for a reward or points promotion to expire. Such activities will give your at-risk customers the motivation they need to return and restart their relationship with your brand.
Your loyal customers are the ones who return to order from you time and time again, and with proven higher average order values and greater purchase frequencies, they are your most valuable assets. By building a better understanding of what drives loyalty at every stage of the customer journey, you can drive retention to secure sustainable growth for your business.
About LoyaltyLion
LoyaltyLion is a data-driven loyalty and engagement platform that powers ecommerce growth. Unlock real insights to build a better understanding of what drives longer-lasting customer relationships, and use those insights to connect and accelerate your existing marketing efforts. Proven to increase retention and spend, LoyaltyLion is trusted by thousands of fast-growth ecommerce merchants worldwide.
Drop us a line if you'd like to find out more info@bluehorizonsmarketing.co.uk
