The last couple years of e-commerce have shifted the way many consumers shop. During the last two years, online sales in the United States increased by 55% up to 1.7 trillion dollars. This increased spend and demand has created a saturated market in the e-commerce space. Additionally, brands are making the switch to the DTC model and thus need to focus more on the customer experience. In fact recent reports have shown that 20% of a given brand's customers will make up 80% of their profits.
If you are running an e-commerce brand, now is the time to make the shift towards a customer retention centric approach to business. Attracting new customers will always be a big part of business but as the e-commerce industry becomes a more competitive space, having passionate and loyal customers is quickly becoming a must. So how do you increase customer retention and loyalists that are willing to come back to your brand no matter what? Let’s take a look at the top 5 tips we have found from across the e-commerce industry to increase customer loyalty:
In a recent Salesforce consumer report 92% of consumers said they were more likely to make a repeat purchase if they had a positive customer service interaction. This feels like an obvious answer, but the bar has been raised on what is being required from customers in terms of service. Now that the expectation is free shipping and returns on most products, how can you really impress and delight the customer?
Many brands underutilize email and especially SMS campaigns in the DTC space. In fact, 89% of marketers said the top channel for customer retention is email and although email is becoming a crowded space, it is still one of the top channels to grow a loyal customer base. Some effective ways to stand out are:
To grow your email list add points for customers to willingly give up their email such as pop ups on websites or offers for discounts when they sign up for communications from your brand.
As mentioned above, SMS marketing is becoming an even more powerful tool than email. It is common for users to ignore emails coming to their inbox as there are so many being sent out on a daily basis, but younger generations are less likely to ignore text messages directly to their phone. Using a tool such as Klaviyo allows you to send personalized sequenced text messages to customers. SMS marketing is a newer strategy that not as many brands are focused on, but those that adopt early will have a large advantage vs the competition that is slow to adapt.
It is extremely important to be clear about customer communication through SMS as phone communication is often viewed as more private and personal. Make sure to make it easy to sign up for communication from your brand in this medium but make it clear the customer is opting in and easy opt out features.
Sending marketing messages and advertisements to those that have either interacted with your brand before or are already customers is an easy way to grow your base of repeat customers.
Retargeting happens in 2 different ways - pixel based and list based retargeting.
After establishing the audience these retargeting advertisements will go to, nailing your ad copy/design is key to creating repeat customers. This J Crew advertisement is a good example of using retargeting. Often customers will forget to check out or need a quick reminder so by creating urgency users will feel the need to check out.
Creating a loyalty program creates quick incentives for customers to keep coming back to your brand. Many brands use a point or tiered system to get customers back in the door, but we have seen great success with a hybrid between the two.
A point system is the typical system used where each purchase earns a customer points that they can use in future purchases. A tiered system is where levels are unlocked depending on the amount of purchases a customer makes. The hybrid system that many brands are now using will typically give points and perks for free as long as they are a member of the loyalty program. As the consumer reaches a certain level of purchases, they unlock higher point values for their purchases and additional benefits. Abercrombie and Fitch is a great example of the hybrid system:
Highlight Ethical Programs within your Brand
89% of consumers say they are loyal to brands that share their values. Creating and highlighting programs that show your brands commitment to the values of your target audience can create loyal brand advocates. Some examples of brands that nail this messaging are:
Aligning programs that do good for the world can help customers feel more confident in purchasing your products long term and removes roadblocks from repeat purchases. Consider adding or highlighting the good that your brand does outside of just selling top quality products.
Loyal repeat customers are much cheaper and more valuable in the long run vs acquiring new customers. Brands now need to focus more of their efforts on retaining customers through ethical programs, personalized messaging, retargeting campaigns, loyalty programs, and top tier customer service.
To create loyal customers in the e-commerce space you have to understand your customer and market as a whole. Luz built tools to help you easily understand the journeys your customers are taking, send retargeted advertising to warm leads, and see where you stand against your competitors. See how Luz can help you grow your business with loyal customers at scale.