This article was published on October 4, 2021

3 ways to build customer loyalty in 2021

Customer retention is the biggest challenge for ecommerce brands


3 ways to build customer loyalty in 2021

The ecommerce industry has been growing steadily for many years, but since the pandemic, the quantity of online shopping options has exploded. With brick-and-mortar stores around the world having to close their doors, and many people only able to shop from home, brands have been forced to expedite their digital offerings to reach their customers. 

Competition in the online sphere has subsequently grown. Customer retention is more challenging than ever, with hundreds, or even thousands, of other options just one click away. It’s no secret that building a loyal customer base is what’s needed for steady, long-term growth.

But, while things like targeted ads and SEO make marketing online easier, one thing that has proven more difficult is building customer loyalty. How can a brand create a high-touch digital experience?

Here are a few ways brands are building customer loyalty in 2021:

Create personalized customer rewards 

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Today, brands aren’t just competing with a similar store down the street. With the growth of online shopping, brands are competing with products across the country, and even across borders. Success can no longer simply be attributed to putting in the time and effort to develop a high quality product and a great customer experience.

Most consumers do extensive online research before making their purchases, often carrying out comparisons on platforms that offer products from multiple brands.

To some extent, the brands become commodities, when people are just comparison shopping and looking for the best deals,” Mike Ross Kane, Co-Founder and CEO of Hydrogen tells us. Providing white labeled debit card platforms to businesses, the company’s solutions are focused on optimizing customer loyalty. Kane continues:

I think the biggest challenge brands face is that their businesses get cannibalized by a lot of ecommerce platforms, because the customer doesn’t really have a personal connection to them when they’re out there looking for deals. On the flip side, the deal mentality can help a lot of these companies, if they’re able to build loyalty programs.

Customer loyalty programs have been around for a long time. Almost everyone has been on an email list for loyal customers that pushes out periodic product discounts. But, just like hyper-personalization is becoming the dominant trend in attracting customers, some companies are now experimenting with personalized rewards to retain loyal customers. 

Hydrogen offers ecommerce retailers branded loyalty cards that enable customers to receive discounts, cashback, and other personalized rewards based on their spending habits, actions they’ve taken, and their account balance. Companies using these cards also receive data on spending habits, making it easier to offer broader rewards based on individual buyer personas.

Many companies are too focused on their individual brands. I think it’s important to look holistically. A good example would be, if you’re a wellness company, why not partner up with brands that sell complimentary products? This could be a discount on a local gym subscription or deals at a health food store. This approach can be even more effective than simply offering 5% cashback on your product.

Embrace the ratings economy

Everyone knows that loyal customers are not just valuable for their own individual purchases but also in their ability to attract other loyal customers via word of mouth. There’s nothing stronger than a recommendation from a customer, so why keep those recommendations behind the screen? 

Leverage your existing loyal customer base by incentivizing them to share feedback on your products and services. Even if you already have feedback sharing enabled on your website, you may not be taking full advantage of it. 

First, make sure your best customer feedback is front and center and easy to find. In an overcrowded market of similar products, shoppers will be looking to see what others are saying about their experience with your brand. 

Second, make it easy for your loyal customers to share feedback; if it takes more than two clicks to get to a feedback page, it’s unlikely they’ll make the effort. 

Finally, show your appreciation by offering special rewards. For example, offer a 10% discount for new customers when they use your branded loyalty card.  

Sustainability is key

Consumers are much more socially and environmentally conscious than ever before, and they’re more likely to be loyal to brands that share their values. It pays off in both customer retention and ROI: almost 80% of respondents in a 2020 IBM survey said sustainability was important to them, 70% of whom said they are willing to pay socially responsible and ethically committed brands a premium of around 35%.

It’s essential that companies look at the entire supply chain, not just from the production and manufacturing phase, but also how their products are packaged. For example, many ecommerce brands are switching over to sustainable packaging methods that are either reusable or recyclable.

Many forward-thinking businesses are also finding ways to support customers on their own journeys to living more sustainably. “It’s about incentivizing customers to make better decisions, and not just with your brand, but holistically across all of their purchases,” explains Kane.

For example, more and more ecommerce brands are giving customers the option to choose sustainable delivery options. Budbee is one delivery service that’s teamed up with a number of ecommerce brands. The company has a fleet of completely energy efficient electric vehicles, powered by energy from solar panels mounted on the roof of their terminal. 

As many consumers are willing to pay a premium for brands that have initiatives to reduce their carbon footprint, they will be more likely to remain loyal to brands that partner with sustainable service providers.

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