The key to e-commerce success: customer loyalty and retention
By Laura Robertson, Head of Retention at Buy it Direct Group
Providing a good customer experience is the key to loyalty and retention.
Whilst it is sometimes overlooked in favour of weighting effort towards driving first order, research suggests that just a 5% increase in customer retention increases profits as much as 95% in some businesses.
Focusing on the end-to-end customer experience, can pay huge dividends in happy customers and business profitability.
In particular, e-commerce businesses can struggle with customer loyalty due to the nature of online sales, which can remove the human interaction and experience of retail involved in the in-store experience.
As a result, e-commerce brands must place greater emphasis on forming relationships in other ways to retain this loyalty. By forming trusted relationships with customers, there will be an increase in repeat sales.
The success rate of selling to customers you already have can be as high as 60-70%, against the success rate of selling to a new customer which stands considerably lower at just 5-20%.
Evidently, retention has the ability to generate recurrent revenue, but how can businesses increase their chances of happy and returning shoppers?
Have open and honest communication with customers
Perhaps a simple approach, but having open and honest communication can be extremely valuable to existing customers when it comes to customer experience.
A common customer complaint is that retailers don’t supply them with correct, or relevant information in a timely manner.
This can be easily fixed using open communication with customers about any questions that they may have pre-purchase and ongoing issues that may affect their experience with the brand after the sale is made.
For example, the recent issues with UK and global supply chains have resulted in delays to the distribution and availability of some products.
To retain customers who may experience disruption to their orders, the retailer should quickly inform the customer of the issue to manage the customer’s expectations, or to help them make alternate arrangements.
If customers do not feel informed and if transparency is not at the core of the experience strategy, retailers will fail to create long-term relationships with customers.
Consider using self-service customer experience techniques
Providing a self-service system during the customer journey empowers the customer and equips them with valuable information, so they feel confident in the brand and the purchase they are making, whether a new or returning customer.
A self-service method allows customers to try and solve the issue themselves via a frequently asked questions resource, for example, before involving a customer experience representative.
One great example is having a knowledge base platform available to customers on the business’s website. This can be a collection of published documents across omnichannel platforms, that can include frequently asked questions and how to guides.
Having this base allows for consistent support and faster resolutions as customers can access it 24/7.
This will ensure customer service operatives are not occupied by simple questions, and in turn will boost sales because customers recognise that the e-commerce provider has quick and accessible information, increasing their satisfaction with the brand.
Using AI can be another great self-service option which a retailer could consider. Conversational chatbots are uniquely designed to imitate human conversations and provide solutions quickly and effectively.
These can be multi-lingual and handle multiple queries at once, making it a much more effective method of customer experience in the first instance.
Use after service care
The service provided after a customer has purchased from the site is arguably more important than the pre-purchase, as this is when customers make their judgements on their experience and their level of satisfaction with an e-commerce brand.
To encourage repeat purchases retailers must consider customer feedback. Customer reviews can be a great source of this information and supplying them with an after-purchase survey or incentivising reviews on social media tracked by a listening campaign are effective options.
Any issues can then be fixed to demonstrating that the business is listening to the needs of its customers. This will once again reflect well on the brand in terms of sales as customers will be likely to return in the future and maybe even refer a friend.
By taking some of these customer focused solutions onboard, ecommerce companies can quickly increase their sales by improving their customer loyalty and retention rates. As a result, this will promote the long-term growth of the brand.
Government restrictions during the Covid pandemic have changed the retail landscape considerably. The removal of the in-store experience in favour of a shift to e-commerce, despite the struggling economy, saw retail sales actually increase by 46.1% in 2020.
This shows just how lucrative the online retail market is and further reminds retailers of the sheer opportunity available to them to look after customers and secure future revenue.
Without improving customer experience, e-commerce brands risk falling behind other businesses that have already recognised the profitability.
