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LoyaltyLion’s CEO Charlie Casey On Customer Loyalty Today: What Drives It And How To Keep It

LoyaltyLion CEO Charlie Casey explores customer loyalty today, identifying drivers and strategies for retaining it.

Customer loyalty has always been at the heart of retail. Whether we’re shopping in person or online, we return to the brands we’ve had a positive experience with. So how can loyalty be captured and kept today?

To understand the key motivators of customer loyalty, we asked thousands of shoppers what made them return to a brand. Click here to jump to the key takeaways.

Investing in customer loyalty is one of the most beneficial business decisions you can make. By using it alongside acquisition efforts, you’ll be able to bring shoppers in, build trust and keep them – meaning they’ll ultimately spend more with you over an extended period.

But, today, the face of retail is changing quickly and drastically. New tools and technology are lowering the barriers to starting an ecommerce brand. Ecommerce businesses can tap into the software self-service market to deliver everything from hyper-personalization to customer service chatbots.

In the rest of this post, I’ll be sharing how you can act on the five key drivers of customer loyalty we identified in our research so you can secure the longevity of your business.

If you want to see the results right away, check out the full “Loyalty: Up close and personal” report.

Consumer Research Signature 1

Customer loyalty starts by building trust from the outset

Our research exposed that 80% of customers would be loyal to a brand if they knew their data would be used in a helpful way.

Today, individuals keep their data close to their chests, so you need to show that their information is in safe hands. This begins by maintaining a high standard when it comes to customer experience.

Listen to your customers when they have a problem. Make your on-site experience engaging, yet simplistic. And, give your customers something valuable each time they shop – such as exclusive offers in exchange for a sign-up.

To secure trust, you also need to hold yourself accountable and use your customers’ data responsibly. If you trip up, your marketing could get flagged as spam and customers could unsubscribe – leaving you with a smaller contact base to reach out to at important times.

Building a single customer view is the right way to achieve this. By using your customers’ information to better understand them, and their shopping behaviors, you’ll be able to reach out to them with the right content at the right time. Ultimately, showing them that you’re using their data in ways that benefit them.

Inspire your customers

We also found that 74% of consumers will be loyal if purchases moved them towards a goal or reward.

Everyone likes positive reinforcement; especially when we’re shopping. Expectancy theory states that individuals act in a particular way when motivated by a result. We also accelerate our efforts when we’re nearing a free gift or discount. This is why you need to give your customers something to build towards every time they shop.

Add a competitive element to your site that rewards customers when they reach different levels of engagement. At each stage, the shopper should unlock more exclusive rewards not available at lower levels. This way, you’re always showing that there is something within reach and more exclusive rewards to keep aspiring to.

Shoppers want exclusive attention from the brands they shop with

With the rise of the membership mindset, brought about by Amazon Prime and Sephora’s Beauty Insider community, merchants need to work smarter to make their customers feel special. Especially, because shoppers want exclusivity from the brands they shop from: 79% said they would be loyal to a brand if they could unlock benefits only available to them.  Exclusivity also creates a feeling of status as you’re giving your customers something unavailable to anyone else.

To make customers feel extra-special, first identify your most profitable customers. These are the ones who shop with you often, engage with you on social media and have referred others to your brand.

Then, give these customers a celebrity status with exclusive rewards. This could be free products or discounted shipping.

Today, a one-size-fits-all approach just doesn’t cut it. Customers want to shop with brands that really “know” them: 78% of the customers we asked said they return to brands that give them a personalized shopping experience.

The reason Sephora’s Beauty Insider Community has been such a hit is that its emails brim with personalized features. They include predictive, tailored recommendations based on a shopper’s previous browsing and purchase history. Even their “back in stock” and abandoned cart triggers are full of intelligent recommendations and high-quality, custom-fit editorial content.

Use your customer data to see the previous products your shoppers have bought before and tailored their future shopping experience with that in mind. Maybe they’ve bought from your “new in” collection. Notify them each time new products hit your shelves.

Tools like on-site search, pop-ups, and emails can all include personalization fields, so make sure you make the most of them.

Customers shop with their hearts, not their heads

Conscious consumerism is set to increase this year. Ethical and environmentally-friendly products have boomed along with social movements, like veganism, becoming mainstream.

More and more, customers are thinking about the source and impact of the products they want before they buy them. In fact, 71% of 16-24-year-olds say that they feel strongly about corporate social responsibility.

Along with this, customers are also choosing brands that complement and enhance their own identities and help them on the way to the best version of themselves.

  • 68% are loyal to a brand if they know it shares the same values as them
  • 66% said they would repeat purchase at a store if they could create an ongoing relationship with it

These thoughtful shoppers want to know that the brands they’re buying from are similar to them – so be blatant. If your identity and stance on big-picture problems are clear, a coherent and appealing brand will follow. Over time, customers will become invested, shop with you more and will tell others about you.

If you’re cruelty-free, advertise it. If you donate to charities, brag about it. If your customers are the heart of your brand, let them know.

Clarity is key

We’ve all been there. You’re one click away from completing your purchase and the site crashes. It finally gets up and running again but you’re back to square one. Your basket hasn’t been saved, you’ve been logged out of your account and those card details you entered are long gone.

What did you do? Keep on persevering. Or give up? If you’re like 68% of customers, a confusing purchasing journey could have made you abandon your shop altogether.

This shows that clarity and simplicity are not only important for encouraging customers to complete a first purchase. They’re also vital for the longevity of your ecommerce brand. If customers give up the first time they engage with you, it’s going to take a lot of convincing to get them to return.

Our research showed that if you provide customers with an experience that’s effortless, they’ll return in a heartbeat. When we asked shoppers what will make them become a member of a loyalty program, 77% said they would want the benefits clearly communicated. For 78%, the sign-up process needed to be simple.

To make your user experience (UX) a breeze, make sure every part of your on and offsite brand experience is easy for your customers to understand and engage with. This includes everything from your check-out to your product pages. Don’t forget two of the most vital UX rules:

  • Your users are from all walks of life: Create a site that’s enjoyable and effortless for all different types of people and all different shopping experiences
  • Keep things simple and consistent: Users shouldn’t have to read instructions or use a map to navigate your site. It’s your job to show them where they need to go

Key takeaways from the research

  • Customers want to feel trust towards the brands they buy from for them to be loyal 
    • 80% of shoppers want to trust that their data will be used in a helpful way
    • 76% of individuals want to trust that if they recommended a brand to a friend that they would have a positive experience
  • Customer loyalty can be secured if you give shoppers something to work towards
    • 74% of shoppers said they would return to a brand if they could work towards a goal or reward
    • 79% of shoppers said they would be loyal to a brand if they can unlock exclusive benefits for purchases and engagements
  • Shoppers want varied perks from the brands they show loyalty towards
    • 79% said that financial incentives would bring them back to a brand
    • 66% said that experience-based rewards (like early access to sales) would draw them back
  • Personalization will increase your customers’ lifetime value (CLTV)
    • 78% of shoppers will return to a brand if they’re individually recognized for their loyalty
    • 65% of customers said personalized offers would bring them back to a brand. Personalized recommendations were important to 61%
  • Consumers today want to be personally and emotionally aligned with the brands they buy from 
    • 68% of shoppers said they would return to a brand if it shares the same values as them
    • 66% said they would join a loyalty program to form ongoing relationships with the brands they like
    • 62% said they would become a member of a loyalty program if the rewards had a positive impact on causes they care about
    • 47% of individuals said they would be loyal to a brand if they could become part of a community of like-minded individuals
  • Shoppers appreciate loyalty programs with a carefree user experience
    • When the benefits are clearly communicated, 77% of shoppers join a loyalty program and 78% would be motivated by an easy sign-up process

Now you know the drivers, level up your loyalty game

The road to customer loyalty may have some bumps to overcome. But, our research shows that by focusing on five key areas, you can build a business that puts the modern-day customer at its heart, and keeps them coming back time and time again.

Get the Loyalty: Up close and personal report for the stats, tactics to put in place to foster loyalty and real-life examples from brands who are getting the formula right.

Customer loyalty meaning research

This article originally appeared in the LoyaltyLion blog and has been published here with permission.

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