Today, nearly half (48%) of all customers are choosing to shop with large brands because they trust them. This is because these stores have high brand appeal and a dependable reputation. While it’s no surprise that trust is the essence of having a longer-lasting relationships day-to-day, it’s easy to overlook the part it plays in ecommerce success.
Our recent research showed that customers need to trust a brand in order for them to be loyal to it long-term. In other words, through developing a trustworthy relationship, you can increase repeat purchase and customer lifetime value whilst enhancing your brand reputation. This will respectively result in better word-of-mouth, customer acquisition, and revenue.
So how can you use loyalty to foster trust in a digital world?
1️⃣ Make them feel important
Reciprocity is one of the most critical elements in building brand trust. You need to show that you understand and care about your customers on an individual basis.
A loyalty program gives your customers the opportunity to engage with your brand more and, ultimately, build stronger relationships.
For example, rewarding your customers not only for their purchase but also for their birthdays or on-site interactions will make them feel special. As an example, Annmarie, a natural skincare brand, created a campaign called “Members Day” that shows their gratitude to their customers and builds a reciprocal relationship.
Hint: You can also create a better view of your customers by looking at the actions they take to earn points. If your customers follow you on social media to earn points, they probably want to hear from you while browsing their news feeds.
2️⃣ Leverage loyalty data
79% of customers have concerns about how brands use their data. However, our latest research showed that for 80% of customers, feeling that they can trust a brand to use their data in a helpful way is important to securing their loyalty. Data exchange is a give-and-take relationship. If your customers trust you enough to give their data, you need to use it responsibly and deliver a personalized experience. For example, you can make them feel important by surprising them with personalized campaigns or promotions.
Start by using their loyalty data to segment your customers so you can target them in the right way.
With loyalty data, you can identify your:
- Most loyal customers
- At-risk customers
- Churned customers
To see how you can target these segments in different ways, let’s get up close and personal with how Lively tailors their approach for different audiences:
👉 Your most loyal customers are the ones who have the highest lifetime value and engage with you often.
To show gratitude and keep maintain strong relationships with their customers, Lively ran a campaign that offered double points to customers on their next purchase. This personalization tactic led to a 37% increase in repeat purchase by loyalty program members.
👉 Your at-risk customers might need more encouragement than your loyal customers.
For their at-risk customers, Lively sends personalized loyalty emails about their points balance. This keeps these at-risk customers engaged between purchases and give them a reason to return to the store.
3️⃣ Trustworthy is “trust worthwhile”
Our research showed that 76% of customers are loyal to a brand if they can trust it enough to refer it to a friend. Once you’ve shown that you’re worth trusting by using your customers’ data responsibly, you need to make it easy as possible for your customers to refer others.
This is important for ecommerce stores as referred customers are four times more likely to purchase from you than a guest visitor since they are predisposed to trust your brand. Consequently, referred customers spend 200% more than customers acquired through other means.
To encourage their customers to refer others, Beauty Bakerie, offers 500 points to their customers if share their brand with a friend. And, to strengthen the relationship with the new customer from the outset, Beauty Bakerie also offers a $20 discount to referred customers to use on their first purchase. As a result, Beauty Bakerie gained approximately 70k visits from referrals and have generated additional revenue.
To sum up 🚀
For ecommerce merchants, building trust with your existing and potential customers has become more important than ever. 81% of consumers state that trust is an imperative element when they are deciding to make a purchase. This shows that building trust is essential to both increase customer acquisition and your existing customers’ lifetime value.
With a loyalty program you can identify and segment your customers; unlock insights to build a better understanding of what they are looking for; make them feel valued; engage more with the brand and encourage them to return to your store more regularly.
This article originally appeared in the LoyaltyLion blog and has been published here with permission.