4 Ways to Increase Customer Loyalty on Your Website
Seeing fun holiday marketing campaigns start to run has prompted me to think about how ecommerce brands can capitalise on the new online customers reached during the Q4 sales peak. Whilst getting an immediate return on investment for your holiday campaigns is obviously a solid objective, building long term customer loyalty and increasing the lifetime value of your customers is a more sustainable approach and will be better for your long-term sales and profitability.
As the old adage goes, it’s cheaper to keep a customer than find a new one, so here are a few best practise recommendations to help you turn those holiday shoppers into year-round customers.
What is customer lifetime value?
In the simplest possible terms, customer lifetime value (LTV) is the total worth of a customer to a business throughout the entirety of their relationship. This is a key metric you should know for your business, and increasing it over time should be central to your strategy
How LTV is calculated:
To calculate your current average customer LTV, you use the following formula:
Average spend per customer, per month x 12 months x average tenure (in years) of your customers
For example, based on an average customer spend of £120 per month, where your average customer has been buying from you for three years:
£120 x 12 x 3 = Average LTV £4,320
1. Remove friction from the shopping experience
74% of people are likely to switch brands if they find the purchasing process too difficult (Source: Salesforce) That’s a lot of lost opportunity!
Avoid wasting your marketing spend and ensure customers come back to your website by making it a pain-free experience first time around. “I really want to work hard to spend my money”, said NO online shopper ever, so make sure you offer customers a fuss-free and frictionless shopping experience, starting with some basics:
Your site’s overall layout and navigation and are fundamental. It should be easy for customers to find what they’re looking for in a reasonable amount of time and they should feel happy and positive about their shopping experience. If your products are mostly in the gift category or somewhat whimsical, or your website is a place where shoppers go for ideas, make sure you give them a great browse experience – like notonthehighstreet does.
Make sure that your site navigation makes sense to your shoppers, with logical menus and submenus and intuitive product categorisation. Group similar products together and provide users with a clear path to help them find their way through your site and product offering: if product landing pages are labelled correctly, your user can accurately predict what they’ll find before they click on the link (or to it put another way – it does what it says on the tin). Always a good thing!
Your in-site search function should be in a prominent and obvious position and make sure it accommodates things like misspellings and typos. Synonyms are crucial too. On West Elm, a search for ‘full length mirror’ returns zero results, but a search for ‘floor mirror’ finds 15 products, 13 of which are full length mirrors. Search results should load quickly and users should be able to clearly see their query word in context. And of course there should be filtering and refinement options on the search results page.
The checkout should be simple, clear and keep the customer focused on the task at hand, i.e. completing the purchase. Don’t ask for unnecessary information and do allow customers to go back and forth (if the steps are on different pages) without losing their information. Don’t force customers to register to checkout, but do persuade them by indicating the benefits:
Faster checkout and pre-populated billing and delivery information
Access to order history
Ability to check status of orders
Ability to use services like wish list and save baskets
Top tip: inviting them to register on the thank you page AFTER they’ve completed their order as a guest is non-intrusive and a nice way to finalise the process.
2. Provide excellent customer service
51% of shoppers who have a poor customer experience say they would never use that company again (Source: NewVoiceMedia.com). [Full disclosure: As someone who swears off restaurants on a regular basis due to poor service only to return a month later because they have the best ramen/sushi/breakfast burrito, I take that number with a pinch of salt. But I also firmly believe in the transformative power of stellar customer service].
No matter how well designed and optimised your website is, there may be times when customers require help, have questions they can’t find the answers to, or just want to eliminate a doubt before, or after, placing an order. Offering good pre- and post-sale customer service is one of the key ways to build trust and loyalty in your customers.
You should offer a variety of customer service channels that will suit different needs:
Live chat: Having live chat on your ecommerce site allows you to talk to your customers at the exact point where they need help, and can help move them through the shopping funnel at points where they might otherwise get stuck. If you sell complicated or technical products this may be particularly useful.
Phone: customer service by phone can be frustrating – make sure you have enough capacity to answer calls within a short waiting time (letting customers know where they are in the queue and how long before they can speak to someone helps too).
Email: respond to emails quickly, always within 24 hours.
Social support: social media channels have become hugely important for customer service. Customers expect responses FAST – ideally right away, and definitely within the hour. In fact, a 2015 poll by Twitter even suggested customers would pay more for a product or service after receiving a prompt reply to a query through the channel (Source: Twitter).
Whichever channels you support, offering polite, helpful and empathetic service to your customers can become one of your biggest advertisements. Happy customers become repeat customers, and delighted customers become active advocates for your brand. Appreciate your customers, show them you care, and you will see their loyalty grow.
Don't forget about delivery
Don’t forget that good service means a good order delivery experience too. Choose your logistics partners carefully and make sure they can provide a customer experience that upholds the level of service cultivated by your brand. A poor delivery experience can squander all the goodwill you’ve worked hard to build – and the fact that it’s a third-party delivery or courier service won’t really matter to the customer.
3. Reward customer loyalty
Loyalty programmes are pretty ubiquitous – from department stores, to coffee chains, hotels and airlines, as consumers, we like to be rewarded for our custom. In fact, 59% of British adults think all brands should offer a loyalty programme, and over three quarters (77%) are subscribed to at least one programme (Source: YouGov).
Buy loyalty programmes are not just rewarding for customers – for the brands and businesses, they can:
Increase the number of orders placed by each customer over time
Increase the average order value
Increase overall profits
The key to realising these benefits is to offer customers the kind of loyalty rewards they will actually value and avoid a few pitfalls.
First and foremost, keep it simple. If the programme is so convoluted your customers can’t figure it out, they won’t stick around to try very hard. They’ll just drop out, or shop somewhere else.
Unless your products cost less than a cup of coffee, you should reward the ££ spent, rather than the number of purchases or purchased items.
Consider offering bonus periods, where for a specific time, customers can earn extra points or extra value from the bonus they wish to use.
Offers and rewards have to be relevant to the shopper, and compelling, or they will soon start to drop out of the programme (yes, I’m looking at you M&S, and no, I’m not motivated to come in for some free tenderstem broccoli).
Feelunique’s loyalty programme is a great example of getting it right, giving members:
Personalised product recommendations based on their individual ‘beauty profile’.
The option to choose a favourite brand and get 10% off that brand every time they shop
Special birthday treats
Exclusive access to new lines and sale items before anyone else.
4. Make the most of post-order communication
Finally, how you communicate with your customers after they’ve shopped is a powerful way to build on your relationship and encourage customer loyalty:
10 days or so after the order (allowing enough time for delivery), send your customer a thank you email. Remind them how to make a return if needed and ask them if they were happy with their purchase. Deal with any negative feedback in a constructive and helpful way, so that the customer ends up 100% happy.
Ask them to review their purchase (both the product and the experience) on your website, which will help build up your number of reviews, adding to that all-important ‘social proof’
Offer them an incentive to refer their friends. For example, LK Bennett offers shoppers 20% off their next offer for referring friends (the friend gets £50 off when they shop the site for the first time). A sure-fire way to spread the love.
So there you have it. A few ways to increase customer loyalty. In the highly competitive world of ecommerce, where the cost of acquiring customers is only going up, taking these steps should help you make your customers happy and start to drive up that brand loyalty and increase your customer lifetime value.
Get in touch if you would like to learn how we can help you increase your customer loyalty, audit your website for conversion optimisation opportunities or otherwise support your ecommerce goals.