As an online retailer, I’m guessing you spend a lot of time – and money – on converting new customers to your e-store, right? But what happens after they’ve made their first purchase? You fire some discount codes and reward points at them and *fingers crossed* you have a loyal customer? On average, it costs between five to 25 times more to get a new customer than it does to retain an existing one according to Harvard Business Review.
Well, that approach doesn’t cut it for me anymore. I think it’s time for online shopping merchants to get a bit more creative when it comes to customer rewards. To make me come back for more, I want more than just percentage discounts here and there.
I want less friction and a personal touch.
Airlines and credit card companies have been removing friction for their customers for years and I keep asking myself why so few e-commerce players are doing the same. Regardless of your loyalty status, you won’t get any discount on your airplane tickets. Instead, they will remove the friction of having to stand in the check-in line and stress about how long it’s going to take to clear security. By removing these uncertainties, you can spend an extra hour at home, and get access to a lounge where you can sit and work or relax quietly before taking off.
While airplane companies have nailed frictionless experiences for loyal customers, I get endless popups like “10% off your first purchase” and retargeting ads from online retailers. But what is the actual value of being a loyal customer online these days?
In today’s world, customers have little incentive to be loyal. Your product, or a product similar to yours, is only one tab away and at a lower price. The cost of switching is essentially zero.
Build a habit around your product
Could shopping be a habit? Nir Eyal, Behavioral Design Consultant and an expert on building habit-forming products, is a firm believer that you at least can create a habit around your store and your products. He argues that sales and monetization are a result of engagement, and that we can learn what makes the customer come back and use a product again.
So how do you engage with your user base? The short answer is: with content and community. Depending on your product there are different ways you can create content, but the key point is to keep it relevant and valuable for your customers. Figure out what engages them.
For example, we see that people who use a shopping app buy more often than those on the web. This is simply because in an app you can build richer content, and get closer to your users in a more engaging way. For instance, some fashion shopping apps create style guides or a constant stream of new looks for inspiration.
Jonathan Wall, Chief Digital Officer at Missguided, summarizes it quite well:
“I see mobile web very much as acquiring the customer and mobile app is about engaging your customer.”
What could be more engaging than having a community built around your brand? There are several ways to do this well. One good example is Adidas Runners club, which is a free running community with daily events on topics ranging from running, to strength to nutrition. It gathers people around the brand and further engages with the Adidas community. The key is to think about who your users are (in this case running enthusiasts) and how you can connect with them on a personal level.
Successfully building content and engaging with your community will not only get people to form habits around your product, but it will also place you top-of-mind with the consumer when it’s time for a purchase. And as we’ve argued before, experience is the new loyalty.
How do you get started?
Of course, it might be difficult to create a strong community as giants like Adidas have, but who knows; if you start thinking outside the box now, maybe you’ll get there someday. Here’s how to get started:
Start by mapping out the points of friction:
- Shipping. How long does it take? How easy is it for the customer to track?
- Sizing. How can you make it easy for customers to choose the right fit?
- Returns. What if customers don’t like their purchase? How do you make returns friction-free?
- That little extra. Are your customers getting treated with something fun?
Then on to the solutions:
- Free shipping which includes tracking.
- Sizing tools – what size is the model wearing? AI technology.
- Pre-printed returns labels, home pick-up or return in-store?
- Give them unexpected treats that will surprise them and make them happy. And don’t forget to reassure them they’ll be taken care of if anything unexpected happens.
To sum it up: It’s about making customers come back for more because they want to. Not because they feel tempted by a discount code they got in an email.
Remove friction with Klarna
At Klarna, we recently conducted research focusing on customer loyalty, in which 29% of US shoppers stated that shopping isn’t as fun as it used to be. The results showed that today’s shoppers want an experience that engages them on both an emotional and a transactional level.
The solution to reaching that personal and friction-free level seems to be in the checkout.
- 28% of shoppers say that a long checkout process online is one of the top drivers of disloyalty
- 27% say flexible payments would make them more likely to buy more with a brand
- 35% say flexible payment options would make them more likely to shop again
Having Klarna in your checkout gives your customers three options:
- Pay in 30 days
To put it simply: You give your consumers the opportunity to try it before they buy it, for no extra fee.You as a merchant receive payment upfront, leaving all the risk to Klarna.
This option allows customers to split their purchase into four equal payments. And guess what – it doesn’t cost them anything extra.
This is for larger purchases that customers want to pay for over a longer time period. Klarna’s flexible financing options range from 3-36 month plans.