Achieving Customer Loyalty: Strategies and Benefits
With total global online sales exceeding $6 trillion in 2023, eCommerce is indeed a highly lucrative business. But at the same time, more than 26.5 million online stores battled to get a slice of the pie. Add to that the fact that the constant development of affordable intuitive platforms – which don’t require deep technological knowledge and are a fantastic first step into the sector – brought a few hundred thousand startups to the table, and you can easily understand why keeping customers loyal is a critical factor for the success and sustainability of any eCommerce business.
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Loyal customers are invaluable as they not only make repeat purchases but also often become brand advocates, recommending the store to others. So let’s dive into our findings, touching on interesting topics like strategies for building loyalty, benefits, challenges, and more importantly, what tools do the most important eCommerce platforms provide to enable these strategies.
Understanding Customer Loyalty in E-commerce
Customer loyalty in online retail refers to the likelihood of a customer to repeatedly purchase from a particular eCommerce website. Customer loyalty is not to be confused with customer satisfaction, which is a measure of how the products or services provided by an online retailer match or surpass customer expectations. Satisfaction is a short-term indicator and can fluctuate with each transaction.
Loyalty on the other hand is about long-term engagement and emotional connection. It is not just about being happy with a single purchase but about consistently choosing the same retailer over others, even when there are alternatives available.
While they are different, both satisfaction and loyalty are crucial and satisfaction often serves as a stepping stone to loyalty – a customer who is consistently satisfied with their purchases is more likely to become loyal.
Strategies to Build Customer Loyalty
The importance of having loyal customers is so big, that many companies have even created special departments that work solely on increasing customer loyalty. The new developments from AI have come as a breath of fresh air, because it makes it easier to gather and interpret large amounts of consumer data – like purchase history, browsing behavior, and customer feedback – understanding individual preferences and patterns. Based on these results, retailers can offer personalized recommendations, tailored promotions, and a curated product selection that resonates with each customer. This not only enhances the customer experience but also increases the likelihood of sales and customer loyalty.
In a highly competitive market, you will find that offering a personalized shopping experience often needs a few more perks added to increase customer loyalty. A great customer service experience could be an answer. Quick and efficient responses to enquiries send a strong message that the company cares for its customers. This could be a strong differentiator, but unfortunately, one of the hardest things to achieve, primarily due to a shortage of highly trained and committed staff who can handle complex queries and provide exceptional service.
The development of the latest GPT models sped up the work in delivering chatbots which start to understand unpredictable human inputs and are able to be linked to the company’s database and generate unique responses, write emails, reminders, and polite replies – anything that requires addressing a human.
However, although they are pretty impressive (Mitsuku for example is able to reply to your question in the most humane way and understands your mood with the language you’re using), there is still a long way to go until AI driven chatbots can reach the effectiveness of a human counterpart. Vodafone is one of the many who replaced most of its customer service staff with a chatbot and the results are rather disappointing.
One of the key advantages is the fact that loyalty brings repeat business. Let’s face it, resting assured that their products sell again and again (and again) is every retailer’s dream. On top of that, it is well documented that once they pass the first-time barrier and helped by the incentives we talked about previously, your loyal customers will spend more, too.
Now, imagine a happy customer, motivated with a free gift, sharing positive experiences with friends and family – this customer often becomes a valuable brand advocate, engaging in word-of-mouth marketing. This organic form of marketing is one of the most effective available. Multiply this tenfolds, and you can easily see why cultivating loyalty among existing customers significantly reduces marketing costs.
At the same time, loyal customers are much more open to providing feedback and are a goldmine of customer insights helping retailers to continuously improve their offerings and create a more satisfying shopping experience.
However, all these don’t come without challenges. In a highly competitive market, where consumers are overwhelmed with words like SALE, OFFER, standing out and building brand loyalty can be particularly daunting. Businesses must find unique ways to differentiate themselves, whether through product quality, innovative products, exceptional customer service, or a distinctive brand identity, to capture and retain customer attention.
At the same time, technology and trends evolve at such a rapid pace that it’s very easy to slip behind. Last year showed us exactly that. Marketplaces with intuitive apps and trendy products like Shein or Temu took over the market in a matter of months. That’s why online retailers have to stay ahead in adopting and implementing the latest e-commerce technologies and always be aware of what their customers want.
Building loyalty with major eCommerce platforms
The major eCommerce platforms offer various tools and features that can help businesses increase customer loyalty, either out of the box, or as third-party extensions and plugins.
The newest developments in AI are working miracles when it comes to customer journey personalization. Adobe Commerce’s AI capabilities allow the platform to deliver timely and relevant content, by personalising site search, product recommendations, and browsing, as well as promotions that match customers’ needs and interests.
Shopware is closely catching up. Their AI Copilot tool brings brand-new features supported by the incredible power of AI, which can help with customer segmentation and send personalized checkout messages.
Magento can be paired with many third-party platforms that use AI to recommend products personalized to every user. Aqurate, for example, is an extremely powerful AI-driven platform which works by observing customers’ behaviour to offer highly distinctive suggestions and create a unique shop for every client, across all the relevant channels.
For delivering personalized messages, third-party platforms like Klaviyo, ActiveCampaign or Omnisend can be easily integrated with all major systems: may it be Magento/Adobe Commerce, Shopware or Shopify. They offer a good range of eCommerce email marketing features, such as abandoned cart reminders and email personalization. These platforms also offer SMS marketing if you want to engage your customers using both email and SMS.
The checkout process is seamless for Magento/Adobe Commerce, and even if out of the box, the system advocates for a 2 step checkout, merchants that prefer the one-step setting can integrate it through various extensions. Shopify worked actively on their checkout process last year and towards the end of the year announced that their checkout process was reduced to one step.
The best extensions for loyalty programs
The eCommerce platforms we work with don’t offer tools for creating loyalty programs out of the box, but this can be easily done by integrating extensions that offer rewards, points or discounts to loyal customers.
The Loyalty Program for Magento 2 from Amasty has amazing reviews. It is a very intuitive extension that can help merchants offer discounts based on cart and customer attributes, create promotions based on purchase history, display program info and purchase stats in customer accounts and motivate store visitors to register and spend more. It also uses 16 additional cart price rules actions to easily create hot deals for different loyalty program levels.
The Loyalty program for Shopware by Kraftware is one of the highest reviewed extensions in the Shopware marketplace. The extension can create a unique loyalty program to reward your customers with exclusive discount campaigns. The extension works great with the Shopware Flowbuilder, so merchants can easily create rules for automating this process.
Shopify developers have taken great interest in creating apps for loyalty programs that give out exclusive points and perks. In total 143 plugins are available for merchants to keep customers coming back for more.
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