Boost Customer Loyalty in 2023 With These 6 Value-Added Services
A tough economy puts customer loyalty to the test. A 2022 UpCity survey found that 50% of respondents were ready to leave brands they loved for less-expensive ones to prepare for a recession.
While you can’t control the economy, you can control your online ecommerce experience — which can make or break your relationship with customers. In a PwC survey, 51% of consumers reported that they would be less loyal to a brand if their online shopping experience wasn’t as good as shopping in person.
This stat is a bit scary, but it also offers a positive takeaway — you can encourage your customer base to stick with you in the long term by creating an unbelievable ecommerce brand experience.
This post will help you start building a memorable online customer experience. Boost customer loyalty by spreading these value-added services throughout their online journey.
- Don’t just focus on one value-added service. Shoppers are more likely to stick with a brand if they experience value across multiple touchpoints in their customer journeys.
- A value-added service is more than a benefit, such as free shipping or better pricing. Value also comes from the experience of taking advantage of that benefit.
- Gather customer feedback to determine whether your value-added services are increasing customer retention.
- A poor post-purchase experience can make customers forget the value you added to the pre-purchase experience. Set up product and shipping protection plans to safeguard the post-purchase experience.
VIP experiences are a feature of many brands’ loyalty rewards programs. Customers sign up and earn rewards points based on spend, then they redeem points for benefits, with VIP benefits requiring the most points.
VIP benefits can include:
- Free returns
- Deeper discounts on products
- Early access to new products
- Exclusive events
In research from 2021, McKinsey found that “top-performing loyalty programs” can increase revenue by 15 to 25% annually. But how do these “top-performing” programs get members to redeem points? Through a combination of benefits and experience.
The experience of pursuing, unlocking, and enjoying those benefits must be frictionless, or customers will lose interest. In a Salesforce survey, 61% of loyalty program members reported they would use their programs more if rewards were applied automatically.
Follow these steps to make sure your VIP experiences aren’t creating friction that damages customer loyalty:
- Partner with a platform like Yotpo to manage your loyalty program, point system, and VIP experiences. Yotpo integrates with most ecommerce platforms and shows customers how many points they have available to redeem at checkout.
- Make your customer loyalty program easy to understand, and join with a dedicated landing page and FAQs section listing VIP benefits.
- Revisit your point redemption data frequently. If point redemptions drop, you may need to add new benefits to boost customer engagement.
- Send an NPS survey to active VIP members to see how loyal they are. Ask a question like, “On a scale of 0 to 10, how likely are you to recommend our business to a friend or colleague based on your VIP experience?”
Pro tip: Segment customers who get close to meeting the criteria for VIP membership, and create a touchpoint reminding them of the benefits that await them. This touchpoint can be an email or SMS notification.
Personalized product recommendations
Personalized experiences and brand loyalty go hand in hand. According to a 2021 McKinsey study, 78% of consumers are more likely to refer family and friends to brands that master personalization.
Tap into the power of personalization by tracking past purchases and recently viewed products in your ecommerce platform — like Shopify — to understand customers’ preferences. Sync this customer data with a marketing automation tool like Klaviyo so you’re able to send automated emails with product recommendations.
Subscription box ecommerce brand Bespoke Post takes personalized product recommendations a step further. Rather than simply using a customer’s online behavior to suggest products, the company flat-out asks the customer if they’ll buy certain items.
Bespoke Post’s tactic is especially useful if you want to expand your product line and want confirmation that certain items will gain traction with your audience.
Pro tip: If you end up stocking a crowd-sourced product, send the “crowd” a special thank-you discount on it when it becomes available. You can also have more confidence using the product in upsell and cross-sell campaigns.
Buy now, pay later (BNPL) option
Known primarily as a customer acquisition tool, buy now, pay later lets buyers pay for an item over time. But it can be a powerful tool for generating customer loyalty, too.
In a 2022 PYMNTS study, 66% of millennials said they have a “positive view” of luxury brands that offer BNPL. The study also found that 58% of them are more likely to return to a store thanks to BNPL availability. But like VIP experiences, the potential of BNPL to boost loyalty falters if using it proves difficult.
Ecommerce brands wishing to offer BNPL need to contract with a third-party provider like Affirm, Afterpay, or Klarna. Eligible products don’t have to be expensive — many can cost less than $100. Consumers need to establish accounts with these providers before taking advantage of BNPL.
Many of these companies charge interest if a customer can’t pay in a certain number of installments. And according to Morning Consult, 22% of BNPL consumers reported a credit score drop after a late or missing BNPL payment in May 2022.
While it’s ultimately up to the third party to manage any misunderstandings, customers are likely to blame your brand for dropping the ball. Protect your customer relationships by being upfront about BNPL provider requirements on your product pages.
Take the portable blender brand BlendJet. Right next to where the company shows its participation in Afterpay’s BNPL program, it includes a link to a pop-up where customers can read the fine print.
The company also has an FAQs section devoted to its BNPL option, including a note about the required number of payments to avoid interest.
Pro tip: Consider mentioning BNPL availability in cart abandonment emails, especially if you sell luxury products. While there are many reasons for abandonment, BNPL can specifically target customers who abandon because of high upfront costs. See if the BNPL addition boosts the number of returning customers.
Prepaid subscriptions are ideal for retaining customers. But they boost loyalty by buying you time to understand customers’ needs and communication preferences. Use that information to tailor their ecommerce experiences and win them over.
Recurly’s research backs this idea. In a 2022 study, the company learned that 51% of consumers “feel more loyal” to subscription brands over non-subscription ones, while 42% spend more money with them.
Here’s how prepaid subscriptions work. They usually span three, six, or 12 months. Customers choose a duration and pay upfront to receive a product once a month for three, six, or 12 months.
La Colombe Coffee Roasters offers an extra 10% off to customers who commit to a three-month plan.
First, make sure your brand is able to offer subscriptions. If you sell products that customers consume and replace frequently, like makeup, coffee, or shaving razors, subscriptions might be a good fit.
Then try out these best practices to encourage sign-ups and renewals:
- Use a platform like Ordergroove to manage the subscription experience. It integrates with your ecommerce platform to allow a seamless, branded subscription enrollment experience.
- Give subscribers the ability to skip shipments for a month or two if necessary. A customer might pay upfront for a 12-month subscription, but if they go on vacation, they don’t want to leave a shipment sitting outside their front door.
- Finally, make it easy for customers to add products to scheduled subscription shipments. You create friction if customers have to complete a separate transaction to purchase an add-on rather than add it to their subscription box.
Pro tip: If a customer repeatedly purchases the same product, send an email or SMS pointing them to your prepaid subscription option.
Package theft and in-transit damage are major consumer pain points. Online shoppers expect brands to have safeguards in place against them. According to C+R Research’s 2022 Package Theft Statistics Report, 14% of customers had experienced product theft by September of that year. And 45% of consumers think retailers don’t do enough to prevent it.
Obviously, theft is not the brand’s fault. But when customers experience it, they expect brands to empathize with them. In a 2022 Qualtrics study, 62% of consumers said businesses need to “care more about them,” and treat them better. And if you do, 60% said they’d buy more from you.
This is why the service experience is so important. Shipping protection plan providers like Extend let customers start a service request online with only their email address and process 98% of requests in 90 seconds. This type of hassle-free experience turns a negative experience into a positive one.
Online satellite phone retailer Apollo uses Extend Shipping Protection as an engagement tool, knowing that customers who add one to their shopping carts will have a quality experience. The company nestles the plan right next to its shipping calculator.
Pro tip: Many customers don’t realize how valuable shipping protection plans are until they need them. Depending on your costs, you could offer to waive shipping on certain items if a customer buys a shipping protection plan. Your margins might shrink slightly in the short term, but that may end up being the cost of loyalty. Besides that, you’ll be able to cut costs in the event of a shipping accident like theft, damage, or loss.
A new sofa may arrive on time and undamaged, but that still doesn’t protect it from accidental, in-home mishaps. Product protection plans can give customers a line of defense against accidental damage like stains and fabric tears. And if you make it simple for a customer to arrange a repair or replacement, you’ve laid the groundwork for a loyal customer base.
Extend’s research shows that customers with product protection plans have a 4.5% higher repeat purchase rate than customers who don’t. And much of the repeat business comes from a seamless claims experience.
When Extend approves a replacement product, they send customers back to your online store to select it. There you can delight them with other value-added services like free shipping.
Apollo complements its shipping protection plans with product protection. If a customer adds an item to their shopping cart and heads to checkout without adding a plan, a pop-up appears showing the plans’ value propositions.
Pro tip: With Extend, it’s possible to add a protection plan after a customer completes a transaction. In the purchase confirmation email, include a link to purchase a plan after going over its benefits. As a business owner, you get a share of the revenue from each plan sale.
Boost customer loyalty by partnering with Extend
With Extend’s shipping and product protection plans, you can rest assured that your customers’ post-purchase experiences will set your brand apart and build loyalty. Besides creating happy customers, these plans help increase average order values — without adding to the workloads of your customer support agents.
Want to learn more about Extend’s shipping and product protection plans? Click here to arrange a demo of each.