One of the key metrics in an eCommerce business, like one you can set up through Shopify, is the lifetime value of a customer. Simply put, the lifetime value of a customer is the measure of how much revenue a single customer will create over a lifetime of interacting with your business.
Let’s take a simple example of shaving razors (check out Harry’s for a great online store example). If a customer buys razors for $5 each month from a single brand for 5 years before switching to a different brand, then the lifetime value of the customer is: $5 x 12 months x 5 years = $300.
A huge part of this value comes from customer loyalty which includes the customer coming back to reorder, order other products, as well as referring others to your store.
Why is customer loyalty important?
Today, there are more online stores than ever before. This means that customers are bombarded with product options and businesses are competing on similar prices. For online stores, this means that the cost of acquiring a new customer is constantly on the rise, and is typically higher than that of retaining a customer.
Think of it this way: an existing customer has already trusted your business enough to give you their money and their shopping preferences. That’s a big part of the battle already won. Now, it’s just a matter of maintaining that trust, making the customer feel valuable, and continuing to create a great experience.
Customer loyalty is important throughout the end-to-end customer journey — from online user experience to delivered products. Today we’ll discuss four things that you can enhance through your Shopify store to build customer loyalty:
- Customer service
- Active follow-ups
According to a Harvard Business Review customer loyalty report, one of the main reasons for customers to stop doing business with a company is poor or inadequate customer service.
Customer service no longer means focusing on your rep team to build their skills and confidence, it means personalizing your service and reducing customer effort.
How much do customers value reduced effort?
96% of customers who had to put in a lot of effort to get the answers they wanted from customer support are likely to be disloyal.
Only 9% of customer who had to put in very little effort are likely to be disloyal.
One of the main ways to reduce effort for a customer is to reduce the number of rep transfers and contacts to resolve an issue. But this doesn’t mean you have to reinvent your support team.
Using customer service ticket management apps like Help Scout and shared inboxes like FrontApp can help your support team pool their expertise and assign customer requests to the the rep available first or most qualified. These apps have built-in features for making internal notes for a customer email and the ability for various team members to assign and take-over the ticket.
Another way to reduce effort for your customers is integrating a live chat option on your store. Apps like Tidio provide customers a quick and easy way to get in touch with your customer service team without having to call in or wait for an email response.
But don’t stop there. Go beyond the expectations by taking an active approach to customer service rather than a passive/reactionary approach. Reach out to customers proactively about anything that may affect their experience – from a sale on products they’ve bought before to something simple like a potential error on your system that may have affected them. Don’t limit your reach to just emails.
Use social networks like Facebook to address customer needs and questions, and announce updates about your store.
Active personalized follow-ups means engaging your customers beyond their online orders. This shows that you don’t care only about the sale, but care about the ongoing customer relationship and making your customers a part of your business journey.
Reach out to your customers to poll them about what they want or where you can improve to better their experience. A personalized email with just one question (taking ten minutes to complete a survey can be more time than they can spare) focussed on a key metric you’re trying to improve both reduces effort for the customer to reply with and gives you insight about what is lacking.
Inform your customers about how you’ve taken their feedback and implemented it, along with updates about your store and any sales that are going on.
MailChimp is a free app that connects Shopify customer information to your MailChimp service. MailChimp allows you to create rich emails for customers, track email engagement including click and open rates, and personalize mass emails.
Customers are more likely to open and read personalized emails than generic mass mailings that easily become part of spam and noise.
Personalizing a customer’s experience with your store can greatly increase their engagement and make your brand memorable. Personalization goes a long way in making your customers feel valuable and not just a sale number.
A great customer journey starts with easily being able to find your site, seamlessly going through the product details and ordering process, and getting a “WOW” factor when the product is delivered through the packaging and presentation.
Similar to how packaging is the last thing a customer will remember before they start using the product, on your online store, the order confirmation page is the last thing they will see before their order is delivered. So it is crucial to build a WOW factor at the last step of your store as well as provide some call-to-action.
We wrote about how to optimize your social sharing, and getting your customers sharing on social networks is made easy by the Happy Ending app, which allows you to customize the purchase confirmation page for your store. Instead of the standard (somewhat boring) ‘thank you’ page, this enhances the experience your customer has at the end of the purchase.
Give your customers an easy way to share (or flaunt!) their purchase on social sites, the ability to sign up for newsletters, a personalized message, and much more to make their online experience more memorable and generate more audience for your store.
Creating incentives for your customers to come back to reorder or try other products, and to refer your store to their friends can be simple and rewarding for both your business and your customers.
Offering a loyalty program and membership discounts lets your customers know that you value their repeat business. Loyalty programs and membership signups are also a great way to get to know your customers better, which can help you provide more personalized and specific suggestions to them.
A great way to help in the referral process is by giving discounts to both your customers and the friends they refer. Implementing apps like ReferralCandy gives your customers an easy way to share a discount code with their friends that also provides a kickback to the customer when their friends make a purchase.
This helps your customers not only create value for their friends but also for themselves to purchase again.
Shopify provides an easy-to-set-up online store for you to start selling your products online. Shopify not only provides a simple backend which allows you to customize the online store and upload products without any coding, but is also optimized for a seamless user experience from landing on your online store to checking out.
You can further enhance this experience and build customer loyalty by:
- enhancing customer support by reducing the number of touch-points a customer needs to have before a resolution
- following up with your customers to maintain the relationship after the products have been delivered
- personalizing your customer’s shopping session experience and making social sharing easy, and
- giving incentives to customers for repeat business and referrals.
Remember, more customer loyalty means a higher lifetime value of the customer. This value is often one of the key numbers that determines how successful your online store would be in the long run.
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