From supermarket club cards to airline frequent flyer programs, big businesses know the value of loyalty. Getting customers to stick by you is just as important for small online merchants—perhaps even more so.
You may not have the budget for a fancy membership program, but building a base of repeat customers is key to growth in good times and survival in bad. Online analytics provider SumAll (www.sumall.com) studied the most stable e-commerce companies in its network and found that 25% to 40% of their total revenues came from returning customers. Even more important, they found businesses with 40% repeat customers generated nearly 50% more revenue than similar businesses with only 10% repeat custom.
Here are seven tips to help foster loyalty among your customers and begin turning a disparate group of shoppers into a brand-boosting community.
1) ENCOURAGE THE BIG SPENDERS. As many an unscrupulous brick-and-mortar retailer has discovered, fleecing a new customer is the definition of a short-term gain. But assuming you're not an online rip-off merchant, encouraging first-time buyers to put more items in their shopping carts has two benefits. Most obviously it's extra money in your pocket, but SumAll's survey also suggests the more a customer spends on their first purchase, the more likely they are to return. Try allocating some of your marketing budget to new customer promotions, offering a gift or free shipping on first-time orders over a certain value, for example, to turn the trend to your advantage.
2) TURN ONE PURCHASE INTO TWO—AND MORE. It's blindingly obvious that you can only have loyal, repeat customers if you focus some attention on those who have already bought from your site. Yet too many online merchants ignore this low-hanging fruit, instead chasing more new customers that studies show are up to seven times more expensive to acquire. SumAll's research showed that first-time customers were 27% more likely to make a second purchase but second-time customers were 45% more likely to make a third. The percentages rose higher still once they'd purchased three or four times. It follows that every order you ship is your best chance to make another sale. Encourage customer loyalty by packing an offer in every box that will drive a repeat purchase. As a rule of thumb, allocate 25% of your marketing budget to returning customers. If money is tight, start with the biggest spending new customers—analytics software can help reveal who they are—and focus on securing that vital second sale.
3) CREATE CELEBRITY FANS. Sure, it would be great if Rihanna spontaneously Instagrammed her love for your brand. It would also be a dream to win the lottery. While you're waiting, try scattering a little of your own stardust on your best customers. Social media makes it easy for you to feature your fans (with their permission), perhaps sharing an endorsement from a satisfied customer. It's even more powerful if you can get your users to generate the content themselves, perhaps sending in photos of themselves with your products to win a prize. If you can keep the conversation on-brand but avoid cynical marketing ploys you can build passion—and loyalty—around your brand for a fraction of the cost of a traditional ad campaign. To complete the circle, design your storefront so your social media feed is prominently featured: seeing all those loyal customers should help convert more first time visitors to your site, too.
4) CREDIT YOUR CUSTOMERS. While you're highlighting your customers online, give kudos to any that send in a great customer service suggestion or product idea that you decide to adopt. It shows that you listen and respond to the community, and gives your customers a stake in the brand. If they're not offering up any ideas, prod them with online polls to start a dialog.
5) GIVE AWAY FREE STUFF. It's the oldest trick in the book, but one that can also do little to generate loyalty if done indiscriminately. Target the highest-value visitors to your store and those most actively engaging with your brand elsewhere online. Then send them some free stuff. It needn't cost the Earth: try something with a high perceived value to them and low actual cost to you. Maybe that's the product you make the biggest margin on, or the last of a line you'll soon discontinue. Either way a few surprise freebies, with a personal note of thanks, could lead to more orders from your biggest customers—and new traffic to your store when they brag to their friends.
6) REACH OUT IN PERSON. Even as an online merchant you should not underestimate the power of the personal touch. If you have a low-volume, high-value business, for example, it pays to check in with the customer after you've got their money. Send a personal e-mail to show you care that they're satisfied and are using the product. If you provide an ongoing online service, churn could also be a problem. A personal e-mail after, say, the third service or third month of a subscription, might make all the difference in turning an initial purchase into a long-term commitment. Identify the danger month for customer churn and check in then. If you find the customer is happy, maybe you can secure that coveted endorsement at the same time.
7) BE THERE WHEN CUSTOMERS NEED YOU. It's all too easy to get consumed with the logistics of running an e-commerce business—such as sourcing and shipping—and not pay enough attention to your customers. For online merchants, however, neglecting just one shopper having a bad experience could have outsized repercussions. Unhappy customers are far more likely to mention you online than happy ones—and they're already sitting at their keyboards when frustration sets in. A study from Dimensional Research and ZenDesk found that people who received bad customer service were 50% more likely to post about it on social media and share the experience more than 5 times. When years of hard work can be trashed in seconds, you need to regularly check your customer service channels, and keep an eye on social media, to nip problems in the bud. The great thing about a public complaint is that you can be publicly seen to solve it. Nothing will gain you more loyalty from an existing customer than going the extra mile for them—and you may impress a few new ones, too.
This post first appeared on Alizila at: http://www.alizila.com/e-commerce-tips-7-secrets-customer-loyalty#sthash.cSa3qTXS.dpuf