E-commerce: How to focus on retention and loyalty

TL;DR Being helpful, supportive and creative by throwing in the odd surprise can drive your retention and loyalty strategy forward and move the thinking from ‘how to get new traffic to my website’ to ‘how to increase the lifetime value of my customers’

Competition on the online high street can be fierce with websites jostling to be seen on the first page of search engines.

It can also be expensive to run ongoing pay-per-click and search engine optimisation campaigns even though the long-term result might be a bunch of new customers to your digital store.

The thrill of attracting them is understandable – and science points to why this is – but turning them into regular, paying customers is where the smart money is.

Getting a customer once is nice, but driving retention and loyalty should be the goal. Indeed, it should be THE focus for e-commerce.

Necessity is the mother of retention

Picture the scenario: You’ve worked your socks off and probably spent a decent amount of money to get that bunch of new customers. Now is the time to put in the hard yards and make sure those customers don’t go anywhere else.

Yes, attracting new customers feels wonderful – and there is a good reason why. Scientists have discovered that novelty is associated with the release of dopamine, a feel-good chemical released by the brain.

And while the acquisition of new customers will always be in the sales melting pot – particularly for start-ups or those being forced to change direction – business owners need to ensure that retention is at the top of the priority list.

Some research suggests it costs five times more to acquire a new customer; some says seven times. It just doesn’t make sense to prioritise new over existing.

Throw into the mix the 80/20 rule – that 80% of your revenue will come from 20% of your customers – and you need to ensure the 20% are well looked after, feel special and aren’t about to switch their allegiance to a competitor.

Tactics for retention and loyalty

The competitive world of e-commerce means that you’re leaving a sale to chance by relying solely on the result of a search engine shopper. 

Reduce the need for that product search by keeping one main point in mind: the need to be pro-active.

While this Harvard Business School research is nearly 20 years old, the stats are still pretty conclusive: increasing customer retention by 5% increases profits by up to 95%.

And to do this, you’ve got to ensure that looking after your customers is at the heart of your e-commerce business.

So that means ticking the boxes of:

  • Fantastic customer service
  • Having a clear and fair returns policy
  • Making their online purchase journey as smooth as possible
  • Following up a sale with a clear explanation on next steps, delivery times and how to cancel an order

But online shoppers have come to expect this level of service – and competitors will be offering similar, if not better, terms.

So to keep those customers loyal, you’ve got to go further. Reward them, surprise them, value them. You’ve got to earn their loyalty and be there for them when they need it. Just as you would your best friend.

Build a loyalty programme

The majority of big retailers have been successfully running member rewards schemes for some years but all e-commerce websites can now access and deliver loyalty programmes tailored for them.

Using such tactics as offering discounts based on purchase volume, gaining reward points for submitting reviews and providing refer-a-friend opportunities, businesses can increase customer retention and reduce the temptation to buy elsewhere.

Platforms such as Loyalty Lion also provide analytics and dashboards to help businesses ascertain their most valuable customers.

A clever method of stepping up a gear is by building gamification into your retention strategy. Members of NikePlus – who spend four times more than a regular customer – have been given the chance to discover new designs as part of a virtual treasure hunt to enhance their experience with the brand.

This practice of going beyond a pure offers-for-points approach can lead to a much deeper engagement between business and customer.

Think about what you can offer outside of a straightforward transaction. Consider:

  • Access to VIP events
  • Sneak previews of new product releases
  • Online workshops
  • Exclusive Q&As with your influencers or brand ambassadors
  • Regular surveys to get – and act on – their opinions

The element of surprise

Loyalty schemes also provide the opportunity to make your customers feel special with the odd surprise or two.

Being clear on what members will receive as a result of their loyalty is extremely important, but you should consider going that little bit further.

Picture the smile on their face when you send them a birthday bouquet, hamper or that product they viewed on your website but didn’t ultimately buy. 

Automation should be applied here as well which means you can deliver the delight without much manual legwork.

One other key area around loyalty is being on hand to provide help, support and advice when your customers need it most. Again, just like you would with your best friend.

Content marketing for e-commerce retailers can come into its own here. While how-to guides or support pieces, delivered to an email inbox, might resonate with customers at exactly the right time, consider how your products you offer fit into their wider lives.

Take an online gardening store, for example. Long-term weather forecasts will provide a picture of the type of year gardeners can expect – a rainy spring or very dry summer, for example – so such businesses could consider planting calendars based on this information.

Multiple calendars could be created for different types of gardens and desired outcomes complete with recommendations on what to plant and when. Depending on whether the start of the year is wet or dry, these calendars could take a very different look and move content production from generic to personal, even taking in customer buying habits to make the experience even more personal.

Go one step further and plant bundles could be created and provided via a one-click purchase.

A similar approach could be adopted by a fashion or cosmetics brand. Providing advice on the latest trends and looks to a customer getting ready to celebrate their birthday – data which can be captured from your member database – is a neat way of ensuring they will feel special on their big night out.

Summary

“The gap between what’s expected and what you deliver is where the magic happens,” says well-known content marketing professional Jay Baer.

A combination of technology and creativity needs to be at the heart of your e-commerce retention and loyalty strategy and can be achieved by answering one simple question.

What would you do for your best friend?

Events & Insights

To keep improving you need to continually sharpen the saw. We run events across the UK to share knowledge, encourage peer to peer learning and to help you, our customers to stay one step ahead of those around you.

Here is a sneak peak of some of the events we have coming up next.

Super-charge your site's most important pages
Learn how Gym + Coffee have grown rapidly thanks to their customer-focused approach
In episode 1 of our five-part series we discuss schema, imagery and keyword research
Social commerce is set to boom - find out what you need to do to prepare for the explosion
Business strategist Vince Gunn asks leaders what these terms mean to them, their customers and their organisations
Shopify Plus is the gold standard for e-commerce so what are the key benefits?
Previous
Next

Start your digital transformation today

E-commerce

Ready to start selling online? We specialise in building
e-commerce stores that convert for our clients across the world.

Wordpress

Website needing a refresh? Find out more about our goals focused approach for building websites that convert.

Custom

The web is changing and fast. Maximise efficiency, scalability and profitability with a totally bespoke solution.

Download From Search To Sale