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How to Build Customer Loyalty

The e-commerce revolution has retailers struggling to balance budgeting between new customer acquisition and customer loyalty. Oracle reports* that businesses are nearly twice as likely to invest in customer acquisition marketing first, rather than customer retention and loyalty. But it's worthwhile considering the business benefits when you build customer loyalty.

Gaining new customers may bring the cha-ching to your ears, but it costs retailers 5x more to attract new customers than retaining existing ones*. It’s worth investing in relationships for the long term - the right way. By treating consumers well and making them feel valued, you’ll eventually build customer loyalty to yield a greater ROI and customer lifetime value.

So, how do you turn that initial engagement into a longer-term relationship?

1. Personalise the Journey

First encounters are important. The top reason customers won’t return to your store, comes down to a poor customer experience. It’s why around 80%* of people stop doing business with a merchant. Although shoppers want a quick, easy and efficient journey, many crave a unique experience.

“Over half of consumers agree [that] when a brand provides a personal experience, they’re more likely to purchase again,” said Ben Irons, Microsoft Strategic Sales Director at the Intelligent Reach ‘Discover’ event. “Whether instore or online, it gives a higher chance of loyalty.”

It’s no secret coffee lovers are one of the most loyal consumer groups to exist. From a simple coffee product elevated into a sophisticated experience, capturing that same experience across all of Nespresso’s channels were crucial to their brand. The first phase was to offer three personalised pod subscriptions across its online and offline channels. This variety and versatility stimulated consumers to commit to a monthly plan, guaranteed with a no penalty-fee (if they were to unsubscribe). Strong personalisation and not ‘tieing down’ customers, helped Nespresso boost consumer confidence, subscriptions and customer commitment.

The second phase was to organise and analyse its customer data. Using its insight, Nespresso adapted this information to widen its product range and offer free coffee to direct its attentive, in-store customer service into a personalised omnichannel experience. Subscribed customers can now buy products of their choice, select from free delivery options to suit them, and manage their credit how they want. Whilst acquiring new customers, Nespresso simultaneously gained the tools to navigate a premium, personalised experience to meet their customers’ needs, whilst earning and retaining their loyalty.

2. Be Transparent

That disappointing feeling when you click on “Check Out”, only to be stung by that additional shipping charge is enough to put shoppers off from completing their orders. It’s one of the reasons why a 53% bounce of purchase abandonment exists.

Retailers need to be transparent if they want customer loyalty. Displaying any shipping costs and taxes visibly can make the shopper feel safe and in control of the buying process. Even by going the extra mile and visibly offering flexible delivery options, it demonstrates an understanding of their needs. It can even encourage shoppers to pay the higher charge as they may see it as a well-informed and valuable choice, rather than a mandatory charge. Being clear and concise can gain trust, new customers and retain existing customer loyalty.

3. Give Options

The reassurance of getting deliveries on time is a comforting feeling. But to achieve this, retailers need to develop a variety of strategies to cater to two major consumer types.

For last-minute shoppers: An omnichannel strategy is essential in fulfilling their needs, particularly during the holidays. Amazon pushed boundaries for the second year running, with same-day delivery options on Christmas Eve; a more expensive option for both retailers and customers. Alternatively, by shipping orders from stores, offering instore/pick-up point collection services or even using Local Inventory Ads (LIAs) to point shoppers directly to the store, consumers can purchase and receive their orders quickly - at a cheaper rate for both parties.

And for impatient shoppers: Retailers are constantly racing to deliver products to customers to meet their instantaneous demands. ASOS are just one of many retailers taking advantage of this demand. By offering a Premier Delivery subscription, ASOS provide customers a year of next day deliveries, no matter how small the purchase. The small price combined with the comfort of knowing orders arrive within the next day can tempt new customers into subscribing. It effectively provides the opportunity to convert new customers into loyal customers, whilst encouraging shoppers to purchase more often.

4. Ask Less

It’s great when a customer creates an online account with your store. But asking buyers to sign up when they’re trying to check out can put customers off from completing their purchase, let alone registering with your store. Don’t forget, shoppers are impatient.

Make the check out quick and easy. Minimise the process with address validation integrations and simple payment options like Google Pay or Apple Pay. It’s even better to give shoppers the option to checkout as a guest. By prompting them to sign up after purchasing, retailers can have better chances of gaining a new loyal customer.

To Sum Up

Find out what works. Test the customer journey with real shoppers to really capture those pain points that you can resolve. Making the customer journey as seamless and free from unexpected surprises not only engages new customers, but it gives a long-lasting impression of a positive shopping experience. By nailing that first purchase perfectly, it can entice new customers to return on their next shopping journey and help you build customer loyalty.

It’s important for retailers to smoothly manage the transition from online-to-offline while adding value and personalisation. At Intelligent Reach we understand how improving product visibility helps carry out a personalised customer experience across all channels. We optimise and enrich product data feeds to boost the quality of your Product Listing Ads (PLAs) and LIAs, pushing your products to shoppers looking to buy. It gives the consumer increased control and convenience, helping to provide a smooth and personalised journey. That first encounter triggered by product discovery gives retailers an opportunity to convert new consumers into repeat customers, to potentially develop into a valuable relationship between all parties.

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