This website uses cookies

Our website, platform and/or any sub domains use cookies to understand how you use our services, and to improve both your experience and our marketing relevance.

[Cyber Week Savings] Unleash the power of managed cloud hosting at 40% OFF for 4 months. GET THE DEAL

Tips to Build Your Customer Loyalty for Your Ecommerce Store

Updated on December 23, 2021

7 Min Read
customer loyalty

Customer acquisition has become a growing challenge in an increasingly overcrowded and competitive industry such as ecommerce. With so many online stores to choose from, customers can easily switch from site to site. 

So how can you keep your customers coming back for more? 

By implementing strategic customer retention approaches that create long-lasting relationships, the brands give them a reason to stay (and come back). 

Loyal customers lead to profitability when they are willing to purchase frequently, leave positive reviews, and recommend your products to others. 

Regardless of the industry of your business, you should always invest time and effort to build customer loyalty.

 

What is Customer Loyalty?

Simply put, customer loyalty defines a positive and lucrative relationship between a customer and a business. Customer loyalty reflects an existing customer’s willingness to repeat purchases and choose one company’s offerings continuously over competitors. 

When customers are loyal to your brand, they do not easily switch to the competitors because of pricing or product availability. It is easier to cross and upsell to them.

Your devoted customers are the most valuable ones. Their first purchase may not be significant. However, their lifetime value is much more significant. Research has shown that 80% of your future profits are generated by 20% of the current customers. 

Loyal customers tend to leave good reviews as well as valuable product feedback. They are also willing to refer your products and tend to be more tolerant of operational issues.

Customer loyalty stems from consistently high-quality products, excellent customer service, positive customer experience, and eventually, customer satisfaction. 

Why is Customer Loyalty Important?

Importance of Customer Loyalty

Regardless of your business’s size and industry, customer loyalty is critical because that small percentage of the returning customers contribute a large portion of the revenue.

Here are some reasons why customer loyalty can grow your business. 

Retaining Existing Customers Cut Down Acquisition Costs

Several studies have proven that it costs approximately five times as much to acquire new customers. A 2% increase in retention rate can generate as much profit as a 10% decrease in operating costs. 

First-time customers are always harder to retain because they do not have much experience with your products or services. Consequently, you have to incur significant marketing and selling expenses.

With existing customers, however, you do not have to spend as much on marketing. Customers who are satisfied with their very first orders are likelier to make repeat transactions. 

Repeat Customers Generate More Revenue

A study by Adobe shows that repeat customers are nine times more likely to convert than first-time customers. The conversion rate for potential customers is anywhere between 5% to 20%. But after the first purchase, existing customers have a 27% chance of returning. After the second purchase, this figure is 45%. And after the third purchase, the number increases to 54%.

Loyal customers also spend more per order than first-time buyers. The top 10% of your customers can pay three times more per order than the rest. And the top 1% can spend five times more each purchase. 

A 5% increase in customer retention can boost business profits by 25% to a whopping 95%!

Loyal customers spread positive word-of-mouth

Delighted customers are willing to write positive reviews and comments about your products and services, that can effectively motivate other shoppers to make a purchase. 

Loyal customers are also likelier to refer your online store to their family and friends. According to Referral SaaSquatch, a new referral customer has a lifetime value that’s 16% higher than a non-referral one. Companies that carry out formalized referral programs can achieve 86% more revenue growth than those who do not. 

In general, customer loyalty benefits your business in every aspect. Loyal customers not only purchase frequently, spend more but also recommend your brand to others. It’s a no-brainer – for better profits and overall success, your business obviously has to foster customer loyalty. 

This also applies to cases where you’re working in an agency and wish to retain clients. Happier clients spread positive word of mouth about your work via reviews, social media mentions, and even recommend you in their professional circles.

The key to making clients happy is to streamline interactions and communication through a process called client reporting. There’s a dedicated article about how client reporting helps identify your client’s business goals,  marketing objectives, and setting key metrics to measure the success of the process.

Five Practices to Build Customer Loyalty for your Online Store

Best Practices To Build Customer Loyalty

Customer loyalty is a hard-earned quality, not given. 

As an online business operating in a competitive and dynamic environment, you need specific strategies to create and enforce customer loyalty over time. 

Exceed customer expectations

The quality of your products and services is a primary determining factor for whether customers come back. 88% of consumers agree that product quality is the most important reason for them to stay loyal to a brand. 

Since online customers cannot hold and see the product directly; it is all the more important to assure them of product quality. Customers can only rely on product images and descriptions. Therefore, you have to make sure that your products’ pictures and descriptions are both appealing and realistic enough. Customers will continue buying from your store if their first purchase is delivered as promised and at least matches up to their expectations. 

Excellent customer service is another top priority – it’s what leads to 75% of customers returning. 51% of customers leave if they are unsatisfied with the service they receive. 

For an ecommerce business, the user experience is just as important. Your site should be well organized and designed to be easy for customers to navigate and find their desired items. Your online store should also be mobile-friendly and integrated with multiple payment and shipping methods. A simple checkout process is also key to a hassle-free shopping experience.

The steps mentioned above are simply foundational blocks for building customer loyalty. In today’s marketplace, to make customers satisfied and loyal to your brand, you have to exceed their expectations

Here’s how you do this. Set and clearly communicate expectations with your customers from the beginning. Then deliver added value to delight customers. Instead of promising something you cannot do, you must perform beyond what your customers expect.

Engage with customers on social media channels

In the ecommerce space, you have fewer physical interactions with your customers.  Therefore, you should leverage multiple channels to connect with your shoppers so they feel truly involved in your business. 

These days, every business needs an active social media presence. Popular social platforms such as Facebook, Twitter, and Instagram, where people choose to share and connect, help you communicate and engage with your customers at every touchpoint. 

Encourage your customers to follow your pages and share their experiences. Motivate social activities like liking, commenting, and sharing with incentives like giveaways. 

Listen to your followers’ feedback, answer their questions and concerns, and create engaging posts. Interacting with your customers on a frequent basis is an important step towards customer satisfaction and loyalty. 

Create personalized experiences

Personalized shopping experiences make your customers feel special and like a part of your brand. Customers will become more passionate and devoted, and stick to your brand. 

Buyers are willing to pay more to receive personalized offerings. 57% of buyers are ready to give personal information for a personalized experience. 86% of buyers report that personalization influences their buying decisions. 

Some common personalization tactics include welcoming your website visitors by name, using insights about customers’ tastes and preferences to show them tailored product selections or recommendations, and sending them details of products that are likely to be relevant to them. 

Sending customized messages and small gifts on special occasions is also a great idea.

Every message you deliver to your customers should be personalized. From newsletters to thank-you emails, every email sent should be based on what you know about your customers.

In this way, you can convince your customers that you care about their interests. Customers will be more likely to trust you and make repurchases. 

Reward loyal customers

Reward Loyal Customers

Highly-engaged customers generate a much higher lifetime value than others. These customers deserve to be rewarded

For Magento 2 stores, a well-designed reward points system is one of the most effective retention strategies. It is reported that 52% of repeat customers would like to join a loyalty program

A real reward expresses your appreciation for your valuable customers. When you spend a few dollars on your loyal customers, it feels like a sincere “thank you for your purchase”. 

In addition, you should also add a Loyalty Program extension to your Magento 2 site to offer your customers exclusive discounts based on their purchase history. With this program, you can motivate loyal customers to shop more frequently. 

You can integrate the loyalty program into your website, social media pages, and email marketing for comprehensive engagement with your customers. 

An excellent points reward system allows customers to earn points not only from repurchasing, but also from other behaviors such as writing reviews, subscribing to newsletters, following social media pages, and referring your products. 

You should also give your customers points on special days to engage shoppers to commit to your online store. 

Your loyalty program should be developed on a long-term basis. Avoid using it as a quick method to grab sales. You should plan multiple tiers to give exclusive benefits according to customer contributions. 

Besides, your reward system should be transparent and easy to understand. Customers should easily be able to check their transactions and balances. Avoid complicated rules that make it more difficult to persuade buyers to make purchases.. Any frustrations caused by a reward program can erode customer trust and loyalty. 

Empower loyal customers to refer

Nielsen’s report indicates that 77% of online shoppers are influenced by recommendations from family and friends when considering a new product. 

Happy customers are also likely to share positive experiences with the people around them. 

Implementing a referral system helps you acquire new customers, as well as build customer loyalty.

As a store owner, you have to find ways to encourage your devoted customers to share more with their relatives as well as social channels. Rewarding your loyal customers with loyalty points, coupon codes, and gifts is a great idea. Lastly, ensure that you have installed your Magento store with the best tools and resources to entertain the customer with an amazing experience.

Conclusion

Customer loyalty is the most significant determining factor for customers to return. Building customer trust and loyalty is essential for your ecommerce business to gain sustainable success. 

Your loyal customers contribute significant revenue to your business and minimize the expense involved in acquiring new ones. 

Devote attention and effort into satisfying your customers, providing them added value, connecting with them closely, and building special loyalty programs. By frequently and consistently implementing strategic tactics, you can form and maintain bonds with your valued customers.

Share your opinion in the comment section. COMMENT NOW

Share This Article

Customer Review at

“Great speed, features, knowledgebase, dashboard, UX and fast, expert support. Very happy!”

Stefan [Management Consultant]

Abdur Rahman

Abdur Rahman is the Magento whizz at Cloudways. He is growth ambitious, and aims to learn & share information about Ecommerce & Magento Development through practice and experimentation. He loves to travel and explore new ideas whenever he finds time. Get in touch with him at [email protected]

×

Get Our Newsletter
Be the first to get the latest updates and tutorials.

Thankyou for Subscribing Us!

×

Webinar: How to Get 100% Scores on Core Web Vitals

Join Joe Williams & Aleksandar Savkovic on 29th of March, 2021.

Do you like what you read?

Get the Latest Updates

Share Your Feedback

Please insert Content

Thank you for your feedback!

Do you like what you read?

Get the Latest Updates

Share Your Feedback

Please insert Content

Thank you for your feedback!

Unleash The Cloud.
Not Budgets.

For 4 Months +
Up To 30 Free Migrations

Cyber Week

SAVINGS
Time Left In Offer
  • 0

    Days

  • 0

    Hours

  • 0

    Minutes

  • 0

    Seconds

40% OFF

On All Plans

GET THE DEAL NOW