As technology is developing day by day, there are many new business models that are appearing, one of which is eCommerce. It can not be denied that eCommerce is a potential market attracting many consumers. Statistics from GrandViewResearch showed that in 2020, the eCommerce market size value was 10.36 trillion USD. Therefore, many companies are entering the eCommerce industry. In this article, let’s find out with FADO Go about strategies that can help increase customer loyalty.
What is customer loyalty?
Before thriving into the main topic, it is important to understand the basic definition of customer loyalty.
Customer loyalty refers to the relationship between companies and their customers, reflected in repetitive shopping behaviors and attitudes. Customers will often choose to buy from a specific brand instead of purchasing similar products from competitors. Customer loyalty starts with customer satisfaction with what they experience and willingness to return to the brand to experience it again.
Why is customer loyalty important?
In fact, 65% of a company’s revenue comes from the repeat business of existing customers. In addition, it is 5 to 25 times more expensive to acquire a new customer than to keep an existing one. That is why with a 5% increase in customer retention, brands can increase business profits by 25% — 95%. (Hoovers). Customers who are loyal to a brand are likely to make purchases regardless of the price. Instead of trying to acquire new customers, companies should focus on their loyalty by coming up with an effective customer care program.
Learn more: The Differences between Traditional vs Blockchain loyalty
As companies realize the importance of customer loyalty, they are seeking new ways to improve customer loyalty. These strategies below can help you build a loyal customer base.
1. Focusing on promotional activities
Establishing appropriate consumer incentive and loyalty programs is an effective strategy to raise customer loyalty. The company may occasionally deploy suitable incentive programs depending on the type of customer. Customers who receive unexpected gifts will feel more recognized and positive about the brand. Besides that, creating mini games also helps increase interaction and makes customers feel they are more valued.
Here are some tips to implement promotional activities:
- Make the loyalty program visible on the Website, social networks to increase the ability to reach and interact with customers more effectively.
- Programs should be easy to understand so that customers are not confused when assessing the appropriateness.
- Regularly remind customers via email, sms, or social networks by sharing useful knowledge, important announcements or messages of interest.
2. Prioritizing customer service
Every interaction a customer has with staff and company will be noted, and they will use this data to assess the quality of service. According to the “Global State of Customer Service” report from Microsoft, 90% of consumers across the globe consider customer service as an important factor deciding their choice of brands. A study about the different customer segments along with consumer shopping habits, behavior, favorites, feedback will strengthen the customer service. Apart from that, customers often expect immediate solutions to their troubles. Almost half of consumers expect a response within half an hour on social media. They are interested in companies which act quickly to solve their issues.
As a result, companies need to provide excellent customer service by developing more focused solutions for specific customer needs.
3. Rewarding customers
One of the best strategies to make customers stay loyal is to reward them for their loyalty. A loyalty program with exclusive offers, discounts and gifts is the best option. Moreover, loyalty programs will also encourage customers to purchase more products in order to receive rewards. There are different loyalty programs:
- Points-based loyalty program: The most basic and well- known loyalty program model in which customers can collect points after purchasing or completing certain tasks. Then, these points can be redeemed for discounts, free products, or other perks.
- Tier system loyalty program: Similar to the point- based model, but the quality and quantity of rewards increase depending on the tiers.
- Value- based loyalty program: Customers are rewarded through value-based programs by making donations to important activities. The company return more money the more its customers spend.
4. Setting up an omnichannel approach
Omnichannel communication is necessary in driving customer loyalty in eCommerce. Omnichannel strategies raise loyalty by offering personalization, enhancing customer loyalty programs, and collecting data insights from every channel for further analytics. Plus, a company can take advantage of omnichannel to keep customers updated.
A study conducted by Meta and GroupM in 2021 points out that about half of US consumers agree that “brands that reach them through social media with relevant information can earn their loyalty over time.”
5. Optimizing referral program
Customers usually prefer recommendations from friends and family rather than other sources of information. A customer’s recommendations are worth much more than the value of their purchases. That is why it is essential to develop a program where customers can earn rewards for referring the brand to others.
Having people to make referrals will not only boost sales but also build a strong community base. Additionally, referral programs require a small investment but with great results which help attract customers.
Lastly, eCommerce is a promising industry which offers many opportunities but also brings difficult challenges. By understanding their customers, businesses can have effective strategies to increase customer loyalty.
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About FADO Go
A Blockchain-based platform that facilitates cross-border shopping easier by connecting consumers, brands, KOLs, and logistics providers on a decentralized network. Shoppers can enjoy the global online shopping experience and earn with cryptocurrency (FADO Token).
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