Content by Ken Burke of MarketLive
In the race to gain customer retention, customer loyalty, and market share, many online merchants leap to the conclusion that they need a formal loyalty program. Perhaps the competition has one, or maybe they simply perceive it as the latest and greatest trend in generating repeat business.
The goal is to get existing customers to put your store on their “A-List” of places to buy. But thinking of loyalty simply in terms of a loyalty program is far too constraining. Loyalty programs have their place, but over-reliance on them can lead to missed opportunities in other aspects of your online business, and they may even reduce your revenues.
New research reveals that you can positively impact your sales by making some simple website improvements that address loyalty from a broad perspective. Here’s a look at how you can go beyond a mere loyalty program and employ other best practice techniques to make your site more relevant to your customers’ interests and needs, building loyalty and customer retention.
These techniques are explored in greater depth in the new research report “Five Keys to Customer Loyalty.” Download your free copy here.
Tailored offers for specific customer segments
What motivates your customers? Chances are they buy for a variety of reasons, and that they go to other websites because they are not finding something they need at yours. Avon addressed this issue through an email that speaks on a number of levels.
The “We’ve missed you” messaging evokes the emotional connection between site and customer and is also an elegant way to say “We value your business.” Free shipping is a tickler that can convert some sales. The two discounts at the bottom appeal to the price-sensitive buyer. The imagery on the page is all about style and a feeling of luxury, which also plays well into the Avon brand image.
A recent survey of 242 retail professionals found that over the 2005 holiday period 33% planned to offer a special repeat buyer discount to help retain them. (Webtrends, 2005)
Email from : Avon
Date : 4/8/05
Subject line : We’ve missed you. Here’s free shipping on any order
Messaging : Includes coupon code, limited time offer expiration
Visuals : Beauty shot + special offers
Retention Strategy : A good re-activation ploy to bring back past customers who have not purchased in a while.
Find out how other leading online merchants are boosting retention and loyalty through the free report “ Five Keys to Customer Loyalty.”
Content and Presentation of Information
Information-motivated buyers expect to have full product details at their fingertips. They want to educate themselves about what they are going to buy, and they do not have confidence in any vendor that doesn’t feed this need. And as the price rises, so does their demand for complete disclosure.
The real victory comes when your customers perceive your site as a source for good products and also as a resource for information about the entire product sector and its uses.
In addition to substantial product information such as product specifications and warranties, HomeDepot.com includes enormous amounts of value-added non-product information. Not only do their product pages have clickable tabs for product description, specifications, and warranty information, but there is also a huge “Know-How” section as well. People go there just to find out how to do something, whether they are buying or not.
Exemplary Customer Service
Great customer service prevents shoppers from wanting to leave. The best way to kill customer loyalty is to provide bad service or a website that performs like a 1997 relic. While it is true that some customers are price shoppers and will put up with a lot to save a couple bucks, plenty of them value customer service more highly and will gladly pay a higher price for good service. This is the kind of shopper you want to keep.
Provide them first of all with an online store that is well designed and easy to shop at, and that performs quickly and reliably. Give them complete customer service information in a dedicated section of your site, and make that section accessible via links on every page. REI puts this information on every product page. In the bottom center the box for “Useful Links” includes links for
- Shipping Charges
- Contact Us
- Delivery Date Finder
- Sizing Info
- Ordering Help / FAQs
- 100% Guarantee
Other customer-pleasing service oriented links like Gift Shop and Expert Advice are located elsewhere on the page.
Further Tools for Retention and Loyalty
Online business basics like sound branding, useful information, and comprehensive customer service can have a profound effect on retention and loyalty by making your site more relevant and appealing to all your customers as a group. Here is a quick look at some of the more advanced tools at your disposal that can support this, and also appeal to the individual shopper.
- Branding: Let your customers get to know and trust you by providing a consistent brand image across all channels.
- Personalization and Segmentation: makes your site, messaging, email, and all related communications more relevant to every individual shopper who comes your way.
- Loyalty Programs: Provide special treatment for those who want it.
- Product Mix: Offer a unique, custom, or exclusive product line or present it in a more attractive way than any of your competition
Today’s Customer in Today’s Online Market
Marketers are expected to spend $17.4 billion in 2006 to get new customers to come to their sites, or to entice previous buyers back again. Those who can retain customers and keep them loyal will spend less in this area and potentially see higher revenue. This can be challenging.
Online customers are by nature very disloyal, and they will only build loyalty with sites that make an emotional connection with them. There are also fewer and fewer new shoppers coming online now, and retailers have to swap amongst a limited pool of customers. Consumers skip from one retailer to another within the same vertical because most websites don’t provide a compelling reason to buy from them other than price. Jaded shoppers look around for the lowest price, so the vendor with the deepest discount on any given day gets the sale.
Can a formalized loyalty program combat this tendency? In many cases, no. Many of your competitors undoubtedly have loyalty programs in place, but most of them are not very imaginative. Most simply peddle discounts, which can actually have an overall negative impact on loyalty. This helps explain why Forrester found that only 24% of online consumers feel more connected to a retailer because of a loyalty program, and that just 34% of online consumers say they buy more because of loyalty programs.
By creating your site to be relevant to their interests and to cater to their personal needs you can improve retention and loyalty without resorting to deeply slashed prices. You can then spend your marketing dollar on expanding your customer base rather than struggling to merely maintain it.