In this article, Chemi Katz, CEO, Namogoo, discusses the incredible monetary value that loyal customers can have and how the investment in creating one can be carried out. From identifying customer intent to doubling down on personalization technology and more, Chemi has some recommendations that can be implemented ahead of the Christmas shopping sprees.
With lockdowns and social distancing norms still in place, ten years’ worth of growth in ecommerce took place in just the first three months of 2020, according to McKinsey analysisOpens a new window . As ecommerce brands struggle to keep up with this unprecedented demand, keeping existing customers may be just as important as finding new ones.
Why? Historically, the cost of acquiring a new customer has been anywhere from five to 25 times as highOpens a new window as retaining one. Building a base of loyal customers provides a durable foundation for business growth, with a 5% increase in customer retention. This translates to a profit boost upwards of 25%, per Bain & CompanyOpens a new window . That is why customer retention has taken on new urgency in the current climate and why it has long been the holy grail of marketing.
Salesforce forecastedOpens a new window that nearly a third of all retail spending worldwide would take place on digital channels during the holidays. Hence, the ongoing holiday season presents a prime opportunity for brands to cement online customer loyalty. But the holiday shopping season may just be a double-edged sword. McKinsey found that 73% of U.S. consumers have changed stores and brands during the pandemic. This means that for retailers to keep customers’ business, it will require careful planning and effective use of technology to deliver the seamless, personalized customer journeys that keep shoppers in the sales funnel.
So, how can brands turn casual shoppers into loyal customers during this critical stretch? Here are three keys to unlocking a winning ecommerce experience.
Learn More: 4 Ways Retailers Can Bring the Joy of Holiday Shopping To Ecommerce
Identifying Customer Intent
One of the biggest points of distinction between casual shoppers and loyal ones is that loyal customers come to sites with a higher intent to buy, as brands like Kurt Geiger have discoveredOpens a new window . The loyal customer knows what they want – they are not looking to browse, but simply enjoy a frictionless path to purchase.
That means ecommerce brands can ill afford blips in the customer journey. But because of the high value they bring, loyal customers are often the very ones targeted by competitor ads and promotions injected into their browsers – with the intent of diverting them away. This phenomenon, known as Customer Journey Hijacking, affects an estimated 20% of online site visitors.
The sooner brands take action to block such harmful disruptions on consumers’ browsers, the better positioned they will be to keep customers’ business.
Innovations in Personalization Tech
Sales for global beauty brand Fresh have skyrocketed as consumers increasingly invest in skincare products throughout the pandemic. And it is not just returning customers: Some 80% of Fresh’s customers are new. So how do they plan to turn them into loyal shoppers?
The company launched an expanded online loyalty program to engage customers through various steps effectively. These steps included supercharging a customer’s birthday month with a wide array of discounts and supporting a variety of payment options to eliminate friction at the payment stage.
Brands can choose from a diverse range of digital tools that can help them identify and leverage customer intent to personalize the customer journey, improve business results, and inspire customers to return. Enlisting data-driven tools that can identify a customer’s price sensitivity against their purchase propensity can help brands tailor offers to individual consumers. This is especially important in this uncertain period when 86% of consumers say they will be more price-sensitive than they were in 2019.
Learn More: Five New Rules To Reel-In Shoppers This Holiday Season
Completing Every Customer Journey — No Cart Left Behind
The unique business challenges posed by the pandemic and the ensuing economic downturn have compelled businesses to delve deep into conversion metrics. How can ecommerce retailers make sure that no cart is left behind? This is where digital analytics tools come in, alerting brands to speed bumps along the customer journey and making it easier for brands to remove points of friction before they make a serious dent in the bottom line. Fresh, for example, is accelerating page loading, so consumers do not impulsively exit the site. Retailers of all shapes and sizes are ensuring that any potential hiccups that could lead to customers changing their minds – from checkout processes to payment security concerns are handled well in advance of the holiday shopping season.
During this unusual, high-stakes holiday season, the steps retailers take to perfect the online experience will not only influence how they perform in the weeks ahead but well into the future. Serving customers best-in-class experiences tailored to their individual profiles will be the holiday gift that keeps on giving.