One of the key panel sessions at Ometria’s Lifecycle ’18 conference this week was all about customer loyalty.
Specifically, what makes a loyal customer, and how can ecommerce brands instil loyalty after the very first purchase?
The speakers included Loretta Avanzi, head of retention at personalised gift company, Boomf, Rachael Emily Jones, head of ecommerce at non-alcohol spirit brand, Seedlip, and Frederica Watson, ecommerce manager at online luxury handbag brand, DeMellier.
Despite having very different product offerings and brand identities, the panel agreed that there’s much more to inspiring loyalty than offering discounts.
But what else is involved? Here are some of the most interesting points raised.
How about this for some special brands – @boomf @SeedlipDrinks @DeMellierLondon all talking about how to get that vital second purchase at #Lifecycle18. Proud that @OmetriaData is how they make it happen. pic.twitter.com/3SetU5Kd0R
— Ivan Mazour (@IvanMazour) September 18, 2018
What does loyalty mean?
The traditional idea of a loyal customer is someone who is a repeat product purchaser – a person who shops with a brand on a consistent basis.
However, Rachael Emily Jones from Seedlip suggests that many companies wrongly focus on product loyalty, when they should be considering brand loyalty as a whole.
Loyalty can mean brand loyalists – not just products. This means people that love what a brand stands for, and have – in some way or another – had a great experience with them. Even if they haven’t purchased multiple times.”
Loretta Avanzi from Boomf agreed, suggesting that this is why it’s so important to gain a more holistic view of loyalty – taking into consideration factors other than purchases to determine who is a loyal customer.
She suggests that online reviews can be a good sign, because even if that person has only made one purchase, the fact that they have left a positive review means there’s a greater chance they’ll return – making them a great target for follow-up marketing.
DeMellier’s ecommerce manager, Frederica Watson also suggested that anyone who makes a first purchase has the potential to become a super-fan customer, so the key is making them feel like a VIP from the very beginning, and nurturing that relationship from as early on as possible.
Understanding behaviour through data
The panel wholeheartedly agreed that data is a vital starting point for understanding consumer behaviour, and in turn, loyalty.
Offline data is highly important for a brand like Seedlip, as its product is also sold in partnering stores such as Waitrose and Ocado. Taking this type of data into consideration helps the brand to build an overall picture of its customer – not just those shopping on the Seedlip website.
A test and learn strategy is also key. One example of this is when Seedlip offered a coupon code to any Ocado customers that also previously shopped in the baby aisle. As well as targeting a specific segment, this allowed the brand to test against online data for a more accurate picture of its customer-base – i.e that pregnant women are a valuable target audience.
For a brand like Boomf, which is based around gifting for seasonal events like birthdays and anniversaries, data can be used as a natural retention tool – to remind and tempt consumers back into the buying cycle.
However, Boomf’s Frederica Watson pointed out that for luxury retail brands, while data is just as vital, it can be more difficult to turn it into actionable insight, largely due to the nature of the luxury purchase.
People do not tend to buy a luxury handbag every week, meaning that data needs to be harnessed in more intelligent ways. For Demellier, this means cross-promoting other categories, such as highlighting a cross-body bag after someone has bought a work-bag.
Again, in this sense, loyalty is not based on the need for specific products, but more of an overall sense of what the brand stands for.
The power of feedback
Within the world of ecommerce, we’re constantly being told that reviews matter. The statistic that 84% of people trust online reviews as much as the opinion of friends and family is oft cited.
But interestingly, not all brands believe reviews are right for them. Both Seedlip and DeMellier have no option for customers to leave product reviews on their website, and instead focus on refer-a-friend programs and other feedback options.
This is due to the high-end nature of the brands, with reviews arguably tainting the brand aesthetic. So how do these brands make customers feel like their opinions are valued?
If somebody feels like their reviews matter, they’re more likely to come back. It’s also going to be more difficult for them to go to a competitor.
One strategy DeMellier uses is a private Facebook group, reserved for its best customers. Not only can this be used as a sounding board for the brand – useful for discovering what people like or want in future – it also instils loyalty in customers, by making them feel valued and part of an exclusive club.
For Boomf, user generated content is its biggest form of customer feedback. Unboxing videos in particular have become hugely popular, acting as advocacy as well as a way for others to discover the brand.
The danger of discounts
Much like reviews, the panel agreed that discounting can be a dangerous strategy. As Jones says, “Once you become a discount brand, it’s difficult to come back from that.”
Interestingly, however, she also highlights the importance of looking at it market by market. In the UK, Seedlip has found that content and storytelling gives consumers a bigger incentive to purchase, whereas in the US, discounting tends to result in greater uplift. This is because it is often viewed as an expectation rather than a perk.
For DeMellier, discounting is also avoided, with Frederica Watson agreeing that it tends to cheapen luxury brands. As a result, the brand needs to find subtler ways to offer rewards, as well as to ensure that there’s always a reason for it.
The DeMellier ambassador program is one alternative strategy, as well as discounts tied into wider brand storytelling such as in celebration of its birthday or new collection previews. Frederica also points out the benefits of the tiered discount, which in DeMellier’s case is a gift card included in with an original purchase.
As well as offering a reward, this leads on to a second purchase, and (ideally) the customer becoming even more loyal as a result.
Tips on how to get started with loyalty
The panel finished by discussing the best ways for other ecommerce retailers to kick off their customer loyalty strategies. The consensus across the board was to start small, but think long-term.
In other words, it’s wise to focus on a single campaign (such as a welcome email series) and do it right, using data to test and iterate as time goes on.
Similarly, the panel referred back to the earlier theme of brand loyalty. Frederica emphasised the importance of involving the customer in the brand story from the get-go, and focusing on how to promote this story (rather than just products). In doing so, brands will be able to better understand how they can play a part in the entire consumer journey, long after the initial purchase.