The last year has changed how customers shop — and importantly, how they think about brand loyalty. Marketing research has found that customers are willing to walk away from a business if they don’t feel like it is making customer service a top priority.
At the same time, the pivot to online shopping has generated a rush of new customers who may have no strong feelings about many online retailers — including your business and your competition.
Customer retention strategies have always been essential, but falling customer confidence and market chaos mean that building customer loyalty is more critical and more challenging than it’s been.
Follow the right strategies to build the loyal customer base you need to keep your business growing.
1. Customers Are Paying Closer Attention to Brands
Marketing research has found that customers have become much less loyal to brands over the past year. One study found that as much as 75% of consumers are willing to try alternative brands right now, switching away from their current preferred brand if they see an opportunity.
Customers are also paying close attention to how brands act right now. They’re both more attentive to how brands treat them and more willing to walk away when they think another brand offers better service.
This means that branding is more important right now, too.
Customer loyalty programs and effective customer service can help any brand convince customers to stick around. Market research and a deep understanding of customer pain points can also help. If you know what customers are having the most trouble with, you’ll better understand what your brand can do to help.
Because customers are more willing to walk away from businesses right now, these practices can provide a crucial competitive advantage.
If your competition lets their customer service slip, you could be in a position to seriously benefit. At the same time, because customers are paying close attention to how brands act, they’re more likely to notice and appreciate good customer service or other moves that prioritize strong customer relationships.
Knowing what keeps customers loyal can also help. Market research shows that product value is often a customer’s top consideration, but factors like customer service, shopping convenience and pricing will also have a real effect on customer loyalty.
2. Repeat Customers Drive Revenue for Most Companies
Most customers don’t return after their first purchase. Those that do come back, however, are often critical for business success. Repeat customers tend to drive the bulk of revenue for most ecommerce retailers. According to marketing data, these customers spend more, add items to their cart more often and convert more quickly than new shoppers or those with a single previous purchase.
This means that you need to attract new customers and build a strong base of return customers to grow.
Investing in customer retention traditionally pays dividends because the customers you retain will spend much more than the average customer you convert. Rewards programs, personalization and effective customer service can all help you convince customers to buy again — helping drive more revenue for your business.
3. Customers Are Looking for Brands They Can Trust
Last year, many brick-and-mortar stores shut down, some temporarily and others for good. At the same time, a massive amount of customers began shopping online or started shopping online more often.
This means that many customers used to shopping at brick and mortar stores are now shopping primarily online. This pivot can be highly disorienting for people who typically shop in person. The variety of brands and storefronts can be challenging to manage. Their preferred brands may also no longer be an option.
This presents a significant opportunity for online retailers. These customers may have fewer strong feelings about the brands they see. They may not associate any companies online with effective customer service, great offerings and strong branding.
Right now, these practices can more easily secure a repeat customer and help your business grow its audience among a new segment of people who weren’t shopping online in the past.
While stores are starting to open back up, many customers who made the switch to ecommerce appear to be sticking with online options. These customers could become dedicated online shoppers. It’s also likely that these customers will stick around — even after shops begin to open — if you can convince them to shop with your brand right now.
Finding ways to keep in touch with your customers and generate more positive customer experiences will help you build an audience from these new shoppers.
4. Customer Habits May Become Long-Lasting
Customer habits formed during times of market disruption tend to stick around. For example, consider the customers who experimented with store-brand food items during the 2008 crash. Even after their incomes returned to normal, they continued buying store-brand goods.
Millennials and younger consumers, in particular, tended to be more willing to switch from name-brand items.
Customers are more willing to experiment right now. They may be more likely to ditch brands that they feel aren’t invested in customer retention. Once the market has reached its new normal, the habits they develop now could last. Securing customer loyalty during times of market instability may help any company to lay the foundation for a strong brand in the future.
5. Customers Listen to Recommendations From Friends
The ecommerce market is on track to continue growing fast. Experts believe that the total value of ecommerce sales, worth more than $4.2 billion in 2020, could be on the way to grow beyond $6.3 billion in 2024.
This means that many consumers will be increasing how frequently they shop online over the next few years. They’re likely to ask for recommendations from friends and family, especially if they’re used to shopping offline.
According to market research, customers tend to trust these recommendations when deciding where they want to shop. Loyal customers are more likely to recommend your brand — meaning that building loyalty now will help you take advantage of this market growth later.
You can prepare for future market growth now by investing in customer loyalty. The more loyal customers you have, the more your company will grow as the ecommerce market expands over the next few years.
Using Customer Retention Strategies to Grow Your Business
Customers are shopping differently. They’re more willing to give new brands a try and may be more likely to move on if they don’t like the service they get. At the same time, there is significant growth in ecommerce.
Brands have some real opportunities right now. Consumers are experimenting with new products and paying more attention to how brands act. Customer loyalty programs and effective communication could make all the difference over the next few months.
Knowing how to identify pain points and minimize inconvenience will help your business secure new audiences. These audiences could become very loyal, especially if your business can prioritize customer service.
About the Author: Eleanor Hecks is editor-in-chief at Designerly Magazine. She was the creative director at a digital marketing agency before becoming a full-time freelance designer. Eleanor lives in Philadelphia with her husband and pup, Bear.