If you ask ‘the Dutch person’, a loyalty program is best described as a discount promotion, a savings system or a certain membership level. A group of 23 e-commerce experts make it clear that it is much more about building a lasting emotional relationship. It’s time for e-commerce to embrace this vision. More attention needs to be paid to developing a well-thought-out loyalty strategy and less to setting up all kinds of separate customer promotions.
The E-commerce Loyalty Insights expert group
This year, the 23 e-commerce experts from 21 different companies were part of the E-commerce Loyalty Insights expert group. This expert group presented their findings on October 10 during the Shopping Today event. The expert group examined the question of how to make customer loyalty a success in e-commerce and why it is important to focus on customer loyalty.
A returning customer feels appreciated
The expert group used the insights from the GfK Consumer Survey 2024. This research shows that consumers participate in a loyalty program if they receive a discount (66%). Or if they can save points for rewards (54%). However, this insight should not be the reason to develop a loyalty strategy. The following picture also emerges from the research.
Dutch consumers indicate that they feel like a regular customer ‘when companies value me as a customer’ (42%). And if the previously visited e-commerce company is the first choice for a new purchase (33%). In addition to the above question, the survey also asked this question: what is the most important reason for you to make a second purchase from an e-commerce company? The most common answer: reliability (30%). When developing a loyalty strategy, it is good news that aspects such as ‘appreciation’ and ‘reliability’ play an important role.
A good loyalty strategy is an engine for growth
As soon as customers return to you with a feeling of appreciation, you take them along on your journey around your services or products in a special way. Such a positive customer attitude also means that you do not have to spend relatively few new marketing euros on seduction techniques to persuade them to make a repeat purchase. Budgets that you can then use for other growth instruments.
In addition, it has been known since then ‘The New Rules of Marketing’, by Frederick Newell from 1997, that loyal customers generate more sales than average customers. A conclusion that was endorsed not so long ago (2021) by Fred Reichheld in ‘Winning on Purpose: The Unbeatable Strategy of Loving Customers’.
Finally: a good loyalty strategy gives you more insight into purchasing behavior and you can record relationships in data. This way you can make better decisions about price, promotion and range. That will also contribute to the growth of your organization.
Good connection to future developments
By paying attention to customer loyalty, you not only increase your turnover, but you also connect with all kinds of developments in online marketing. For example, the growth of AI and Machine Learning will play an increasingly important role in personalizing customer interactions. Advanced data analytics can help companies better understand individual customer preferences. Loyalty strategies fit well with this development.
In addition, customers will increasingly expect a consistent experience across channels. Future systems will increasingly be able to provide these integrations, allowing customer data and interactions to be shared fluidly between online and physical channels. This development also fits well with a loyalty strategy.
You also see that customers increasingly value the ethical and social responsibilities of companies. If this continues, you can reward sustainable and socially responsible choices by customers in a loyalty strategy. You can also include customer loyalty in this development.
Reasons for a loyalty strategy
If you work in e-commerce, there are plenty of reasons to really work on customer loyalty. To sum them up again: you…
- you can connect with the reasons of Dutch consumers to return to you more often
- reduces marketing costs
- increase your data insights
- increases conversion
- can use it to connect to future developments.
If customer loyalty is part of a clear strategy, then loyalty is driven by data. Data, and in particular the insights that data gives you, make it possible to make customer experiences more personal and relevant. – Mandy Plugge, CRM Manager Digital Blend and chairman of the expert group
Start with loyalty strategy
An important question is of course: how do you start with a loyalty strategy? Where do you start? The expert group E-commerce Loyalty Insights provides their bluepaper (the research report) indicates that loyalty starts with a good customer experience with the very first transaction. In this way you collect transactional data for initial relationship building.
A next step can be to create segmentations and run relevant campaigns based on them. Furthermore, it is good to formulate KPIs based on the number of leads, the number of transactions or, for example, the Average Order Value (AOV).
Have you set up all of the above? Then you can make loyalty part of an omnichannel strategy. If you are at this level, you probably run loyalty programs for almost the entire customer journey and you aim for the highest possible Customer Lifetime Value (CLV). And if you are really a front-runner in customer loyalty, then you move predictive modelling in.
Get started with the Loyalty Maturity Model
The difference between a marketer who is thinking about using an omnichannel strategy and a marketer who is still concerned about the check-out process is big. Organizations differ in terms of maturity when it comes to developing and deploying a loyalty strategy.
The expert group recognizes these differences and has therefore developed a maturity model. The 23 experts have used and tested this model, creating a nice benchmark. If you want to know what level your customer loyalty is at and what the growth opportunities are for your own e-commerce company, you can use this model yourself.
It is good and important that e-commerce entrepreneurs, managers and marketers work on customer loyalty. It is good for turnover and it is important for the relationship with customers.
Source: www.frankwatching.com
