The digital competition is rising and business marketers are well aware of the challenges that are lined up ahead for them. Right from trying to acquire their ideal customers at optimized budgets to retaining them, every aspect related sales, growth and gaining customer loyalty is becoming harder by the day. In this post, we’re going to take a look at why and how eCommerce businesses should focus on gaining customer loyalty.

The growth of eCommerce

With the increase in digital platforms and advancements in technology, the eCommerce industry has been fast growing since 2011. The market doesn’t just comprise of the big players any more, but also others who have made it into the industry with their offerings using platforms like Etsy and Shopify.

ecomm market growth

The numbers only show that no matter how unique you think the product you’re selling is, there is an 80% chance that there is another business who is selling a similar one – and maybe at a cost that is far more attractive than yours.

According to Statista, there has also been a rise in the amounts that online shoppers are willing to spend year after year – with the US and UK consumers topping the charts.

online shoppers spend

Here’s another in-depth look into the B2C eCommerce sales in the United States from 2011 to 2016 – in billion US dollars. The growth of online sales has been significant enough for business across various niches identify the opportunity and take themselves online.

sales 2011-16

The rising customer acquisition challenge

The numbers above are indicative enough of the fact that acquiring customers in the eCommerce industry is no longer a breeze. Businesses need to understand who exactly their target audience is, where they can be found, what exactly are they looking for and what message can they be reached out with.

Is a good deal enough to draw the customer’s attention? Is an upsell campaign the offer that will make you stand apart? Is there a way you can add the customer in an endless loop of purchasing only from your store?

According to MarketingSherpa, the cost per customer – by trend, for eCommerce businesses is as high as $100. Yes, those on a tight marketing budgets or thinking of scaling, might find the number discomforting!

ecomm acquisition

The need for customer retention

It is a given that no eCommerce business can have an endless budget to acquire only new customers. Not just will they run into losses, but also lose eventual sales as these are shoppers that might make a purchase once and then never come back to the same store.

According to a post on Kissmetrics, acquiring a new customer is 7x more expensive than implementing tactics to retain an existing one. This only goes to say how customer retention is the key to grow sustainably in the eCommerce market competition.

Shopify conducted a research on acquisition vs retention for eCommerce businesses. The results reinforce the importance of customer loyalty.

Here’s an example they used – in the graph shown below, each store has 100 customers marking $10 purchases per month. The grey store is retaining 5% of these customers each month and the one in pink is retaining about 10%. The store represented by pink grows rapidly because retention is less challenging than direct acquisition.

ecomm retention

“On an average, loyal customers are worth up to 10 times as much as their first purchase.”
(White House Office of Consumer Affairs)  

How to win customer loyalty in a competitive market?

While there are a number of marketers who agree on the importance of customer retention over acquisition, there are those who admit not being able to implement a concrete retention strategy to boost customer loyalty.

Here’s taking a look at some ways that the successful eCommerce businesses use to retain a higher percentage of their customers year after year:

Share a common vision and mission

The consumer market today isn’t just about finding a great price or a deal on a product that interests them. They want to know what is the thinking behind the product, what its creators and sellers think and what values do they associate with.

According to the CeB, consumers across the world stated that they were more loyal to the beliefs and values companies followed, than the brand itself.

So take a look at the causes and concerns that your target market most associates with. Identify areas that your business can significantly contribute to – genuinely, and don’t forget to share the same with them.

The idea is to be able to connect with your customers on a personal level, than a sales oriented superficial one.

For example, TOMS shoes created a “One for One movement” to win their customer’s loyalty. The movement focuses on giving a pair of shoes to a needy person in the world, for each purchase that is made from their store. (You can view and participate in it here.)

toms mission campaign

Focus on personalizing your communication

Continuing on our point above, it is important to ensure that your customers feel important. And the only way to do so, is to place establishing relations with them higher in your priority list than sales. The first step to which is, personalizing all your communication with them.

No online shopper wants a list of features and an attractive price thrown into their face. They really do want to know more about the product – how it was made, what it can help them with and how many other customers like them are happy with the product.

benefits of personalization

eCommerce giants like Amazon, focus on smart personalization to ensure their customers keep coming back to them for more – no matter how many other stores in their industry open up. A few tactics that the store has been using over the years include:

  • Localisation of the store to make it easier for customers to find products in currencies they don’t need to convert
  • Displaying popular ranges of products that customers from a visitor’s demographics have shown interest in
  • Including social proof for each of the products to reassure their customers – new and existing, of the quality they assure
  • Creating contextual up-sell and cross sell campaigns for their customers to increase the value of purchases they make
  • Personalizing product recommendations based on previous interaction of existing and returning online shoppers
  • Smart personalization with dynamic emails based on a customer’s previous purchase to recommend products that will add more value to him
  • Focusing on getting feedback from their customers on the purchased products to ensure quality and service

Leverage the power of machine learning to personalize your online store and get more sales, with Wigzo.

Run loyalty or reward programs

If you want a customer to come back to your store after every purchase, you need to ensure that he picks you over the rest every time he is looking for a product. And the only way to do so, is to keep him engaged with your business in such a way that he feels he is getting the most value from you.

loyalty program aims

This is where loyalty programs come in. These programs offer rewards to customers who frequently make purchases from the business. The rewards can then be used by the customer in further purchases on products from the same store, giving him a better deal than what is already offered.

For example, Cargo Cosmetics has created a ‘Cargo Insider’ program for their customers. The loyalty program is pretty simple – you automatically enter it when you create an account for yourself. Thereafter, you receive 1 mile for every dollar spent on their store.

cargo loyalty program

Ensure impeccable support and service

Most online shoppers are skeptical about making purchases from stores that don’t seem like they offer good support or post-sale services. The thoughts that run through their minds include – what if the product doesn’t work? What if the product is damaged? Will I easily get a refund for my purchase? Will there be someone to assist me if I need help?

According to a customer experience report by Rightnow, the number one reason for customers to stop engaging with a business is poor customer service. Online shoppers are no longer just looking for great deals, but also the post-sale services that they can leverage from.

Apart from that, when you offer great post-sale services, you are guaranteed to generate great online ratings and reviews. The better your social proof is, the more willing is your target audience to engage with your business.

But it is also important to note here, that 90% of online consumers expect a brand to offer a self-service portal as well, along with social and customer center services.

global customer service

Over to you

It is important that eCommerce stores don’t just focus on getting sales, but establishing strong relationships with their customers. The stronger the relationship, the more likely they are to continue doing business with you and even recommend your products to their customers, helping you leverage word-of-mouth marketing.

Boost your customer lifetime value with smart personalization.
Try Wigzo for free.