This post is a guest feature from Fiona Stevens, Head of Marketing on the LoyaltyLion team. This blogpost will look at the three important steps required to make sure that you are truly personalising the customer journey and encouraging loyalty amongst your shoppers.
A few weeks ago, the LoyaltyLion team was lucky enough to co-host a breakfast session with Ometria and a collection of interesting ecommerce merchants. And from what we’ve learned, we’re here to tell you everything we learned about driving loyalty throughout the customer journey.
Step 1: Understand why customer loyalty is so important
According to research undertaken by LoyaltyLion last year, over 53% of a store’s total revenue is generated from just 20% of its customer base. This is true for stores of all sizes, whether you’ve been operating for ten months or ten years, you’re still equally reliant on a loyal few.
Customers who join your loyalty program spend 40% more than shoppers who aren’t a member. They are also 47% more likely to return and repeat purchase. With it costing five times more to acquire a new customer than it does to retain an existing one, it’s clear that these customers are worth your while.
If that isn’t enough to convince you, maybe the fact that a customer’s lifetime value increases with every purchase will be. There is a 27% likelihood of a first-time customer coming back to buy again, but that jumps to 43% between the second and third purchase and even shoots up to 52% by the fourth.
When you look at the numbers, it’s easy to see why retention might be a more effective strategy than focusing solely on new customer acquisition.
Step 2: Identify the biggest opportunities to drive loyalty and retention
According to Emily Assender, Head of Partnerships at Ometria, there are five main opportunities that retailers make the most of to drive loyalty and retention. These are:
- Creating a single customer view from multiple sources: We work in a sea of acronyms from ESP to CRM to POS. But in reality, unless you have a single customer view that pulls all this data together, SOS is the only acronym you’ll be referencing. You need to get all your systems talking to each other to deliver a personalised experience that your customers will love.
- Understanding the importance of offline context: It happens all too often – a customer browses something online and buys it in store, but then receives a cart abandonment email with a special offer. Because of this discount, they are then more likely to return the shop-bought product and buy it online at a discounted rate. Recognising that the customer is the same person online and offline is vital. So make sure your customer loyalty program recognises the customer in both settings to establish both an online and offline context.
- Recognising different levels of personalisation: We don’t all have the tools and time to be experts in personalisation, but it is something that we should all focus on. Particularly when 78% of shoppers are currently dissatisfied with the level of personalisation they currently receive. At the most basic level, we should all be personalising experiences by gender, location, and, even, product and order data. Those who are a little further on can start bringing in lifecycle stage, lifetime value, purchase frequency and order returns. And, if you’re a step ahead you could even start using your loyalty insights to establish who is “at risk” or in need of winning back with additional points and incentives.
- Personalising the content you deliver with your products: Don’t forget that it’s not just the text within an email that makes something personalised. You can add data fields to personalise parts like your banners, hero images, CTAs and subject lines. For example, if you are sending an email to a woman who you know enjoys running, why not put a female jogger in the hero banner rather than a male cyclist?
- Making multichannel a reality: Ecommerce emails are proven to be highly effective, and loyalty emails have open rates up to 14 times higher than the average email. But, if your customers aren’t responding to email don’t be afraid to turn to other channels. From direct mail to pop-ups and push notifications, there are many ways to communicate with customers, so don’t rely on a one size fits all approach.
Step 3: 6 automated campaigns to get you started
As you can see from the diagram below, there are many stages of the customer lifecycle and, as a result, there are many opportunities to introduce automated campaigns.
Because the lifetime value of your customers increase as they move through this lifecycle, ongoing engagement is essential. Next, we’re going to take a high-level view of the best automation campaigns you can launch to keep your loyal customers coming back to your store time and again.
Campaign #1: Welcome campaigns
The aim of a welcome campaign is simple – speak to your new leads and first-time buyers early in their journey, and show them how you’re different from your competition. Most importantly, show them that you know and value them. Simply segmenting a welcome campaign by customer interests can boost campaign conversion from 2% to 8%.
Campaign #2: Cart abandonment
Cart abandonment emails aim to recover abandoned purchases that have been left in the basket, while also increasing average order values as they offer an opportunity to cross or upsell alternative products. The best time to send this campaign ranges from 30 minutes to two hours after they have abandoned their cart. Again, making this multichannel can be extremely effective. Try using push notifications alongside your emails.
Campaign #3: Post-purchase
Post-purchase emails are important to encourage customers to come back and shop with you again. Remember, the customer experience doesn’t stop at the checkout. Based on a brand’s buying cycle, these can be sent between one and 15 days after purchase. But, according to our experience, they perform best if left until after the purchase has been delivered. Give the email context by reminding the customer what they bought and use these details in the rest of the content too.
Campaign #4: Replenishment
Replenishment is becoming an increasingly interesting area in ecommerce as subscription-based products continue to grow in popularity. For many, adding a subscriber tier with unique benefits to your loyalty program is a good way to encourage customers to come back repeatedly. For those without a subscription model, try incorporating loyalty incentives such as double points on specific products to bring customers back to restock.
Campaign #5: Win-back
At LoyaltyLion, we define customers who need winning back as those who haven’t returned to make their next purchase with you in a given time frame. This time frame will vary according to your store and what you sell. Whatever conclusion you come to when defining which of your customers need attracting back, there are two key tactics you can use to win their attention.
The first is to remind them why they shopped with you in the first place. Use your content to reiterate your brand values and show them what you have in common. Secondly, use your loyalty program to surprise and delight. Try moving “at-risk” customers up a tier in your loyalty program, or crediting them with enough points that they unlock a reward immediately. Not only are they more likely to return and repeat purchase, but they will talk to others about the great experience they had with your brand.
Campaign #6: VIP
The crucial step to executing a good VIP campaign is knowing what you VIP customers look like. The highest spending customer you have might also be the one who returns the most products, so look carefully at purchase frequency and average order value over a decent period of time when making that definition.
It’s important to make sure these customers know that you see them as VIPs. Do this by creating a VIP tier that allows customers to unlock exclusive rewards they couldn’t otherwise get. Try making these experiential – for example, early access to new products, entry to unique competitions or access to exclusive content. Anything to make them feel special and like a real VIP.
To truly resonate with your customers, you need to ensure that you have campaigns that feel relevant to shoppers. From your loyalest to a new customer, you should create online experiences that reflect their lifecycle stage. Using automated campaigns empowers you, with minimal heavy-lifting, to make customers feel valued and understood.
LoyaltyLion is a data-driven loyalty and engagement platform trusted by thousands of ecommerce brands worldwide. Merchants use LoyaltyLion when they want a fully customised loyalty program that is proven to increase customer engagement, retention and spend. Stores using LoyaltyLion typically generate at least $15 for every $1 they spend on the platform.