What makes a customer come back for more?
In today’s highly competitive ecommerce market, brand loyalty can be an elusive concept. From fast customer service and convenience, to product quality and brand values, there are many factors that might help to keep customers happy.
But are there really enough ways to make customers buy and buy again?
With this in mind, let’s look outside of the obvious (point schemes) and at a few different tactics for inspiring customer loyalty, alongside the ecommerce brands that effectively utilise them.
Let them try before they buy
With brands like Amazon and ASOS setting the bar, free and fast shipping is now becoming the norm, and an expectation for customers.
But, if it is an expectation, can it truly inspire loyalty? Perhaps to a certain extent, however, ecommerce brands are now recognising the emerging benefits of another key differentiator – the ‘try before you buy’ model.
This strategy is based around managing risk, with brands taking away the uncertainty associated with online shopping and allowing customers to only pay for items they keep.
Recently, it was reported that ASOS’s decision to offer a ‘try before you buy’ service sent sales skyrocketing during a typically competitive Christmas period. The retailer’s UK sales grew 23% to reach beyond £300m in the last four months of 2017. Other brands appear to be taking note too – lingerie brand La Perla has also launched a similar initiative.
So, why is this effective for building loyalty? Essentially, it lets customers know that they are trusted, which in turn helps to create a cycle of confidence in the brand and its service. On a basic level, it also means that customers might be less worried about the financial implications of online shopping, which could spur them on to order on a more regular basis.
Dreams do come true! Check out Klarna on the APP try before you buy
— ASOS (@ASOS) November 14, 2017
Align with consumer values
People are more attracted to brands that share the same values and beliefs as they do. 64% say that this is the main reason they have a relationship with a brand. As a result, customers are more likely to stay loyal too if this is reinforced. For example, if they are reminded of how their custom might benefit a particular cause, or if they’re given rewards that contribute to it.
This is shaping a new kind of loyalty programme. Last year, L’Oréal Paris launched its ‘Worth It’ rewards scheme, which gives customers the opportunity to redeem points for new products or the opportunity to give back.
Customers can choose to donate their points to organisations represented by recipients of L’Oréal’s ‘Women of Worth’ awards, which is an awards event that recognises women for their work in altruistic fields.
By including a charitable element in its loyalty scheme, L’Oréal is yet another beauty brand focusing on cause marketing. The Sephora Stands programme is a similar initiative, designed to create a positive social impact through sales. By promoting philanthropic work (and recognising that customers care about more than just beauty products), these brands are creating stronger and more loyal relationships.
We provide more training and jobs in partnership with @SephoraStands @Sephora We will empower 100,000 women the next few years #Cambodia pic.twitter.com/Zr81NgyB6F
— Nomi Network (@nominetwork) June 8, 2017
Explain the benefits of loyalty
Loyalty schemes are proven to be an effective tool for customer retention. Research suggests that 84% of consumers are more likely to choose a retailer that has a loyalty programme, while 68% of millennials say they wouldn’t be loyal to a brand if it doesn’t have one.
One of main the reasons that customers stop participating in schemes is because they do not offer enough or sufficient rewards (or make customers aware of them). So, it’s not just important for brands to offer customers a good loyalty programme in the first place, but to also effectively promote and communicate its benefits.
One way to do is with a user-friendly explainer page, which helps customers understand how a programme works and encourages them to get involved.
Urban Outfitters’ ‘UO Rewards’ page is a good example, because it puts its loyalty programme in the context of customer’s lives rather than merely outlining the details. Recognising that customers might assume that they can only claim rewards by shopping with the brand, the retailer focuses on other areas such as social sharing and visiting store events.
In return, it explains how they can expect rewards such as further discounts, personalised prizes, and even a birthday gift if they rise to a ‘VIP’ loyalty status. With the majority of loyalty schemes merely involving points to redeem off products, these lifestyle-orientated rewards are likely to appeal to Urban Outfitter’s young customer-base.
The page also effectively promotes the brand’s loyalty app, and includes a number of strong calls-to-action to drive downloads.
While operations can certainly make a difference, there are much more simple factors that can impact whether someone wants to come back. For example, expressing gratitude to customers can make a difference (for first-time buys as well as repeated purchases).
Retailers automatically send confirmation emails, so a simple alternative would be to turn this into more of a thank you than a basic overview of a purchase. This is not remarkably impactful in itself, of course, but it can be a foundation on which to build an overarching email strategy, whereby a brand recognises (and shows gratitude) for loyalty over time.
This could mean additional promo codes, or perhaps an email marking the anniversary of a purchase or newsletter sign-up. In whatever case, it shows customers that they’re valued, which is bound to strengthen a positive association with the brand.
In turn, brands will also feel confident enough to ask for something more, such as feedback or reviews.
Be transparent (and accountable)
Many brands tend to be transparent only after admitting a mistake or wrong-doing. This might be somewhat effective for preventing customers from going elsewhere in the short-term – but it certainly doesn’t inspire loyalty in the long run.
In contrast, being transparent from the get-go is much more likely to increase retention rates. Moreover, Label Insight suggests that 40% of customers say they would switch from their current preferred brand to one that offers more transparency.
This is because transparency helps to generate trust, reassuring customers about what they can expect. Even better if a brand goes the extra mile and surpasses expectations.
Retail brand Everlane famously displays a ‘radical transparency’ philosophy, which involves breaking down its pricing in terms of factors like manufacturing and importing. The idea is that customers can see exactly what they’re paying for. And in contrast to brands with quick supply chains, this indicates quality craftsmanship and clothing that lasts.
By putting transparency at the heart of its marketing strategy, Everlane has managed to create a brand reputation based on openness and honesty, which in turn helps to keep its customers happy and coming back for more.