The Benefits of Customer Loyalty in Modern Ecommerce

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Ecommerce is a competitive marketplace, with brands vying for every dollar possible in order to get consumer attention. It used to be that companies could lead with an acquisition heavy approach to succeed. But now it’s easier than ever to build a brand thanks to companies like Shopify, which means there’s more noise to cut through, and building customer loyalty is becoming table stakes to a thriving business.

What Is Customer Loyalty?

Customer loyalty refers to the ongoing relationship between customer and brand, exemplified by a shopper’s willingness to continually engage with and purchase from that brand thanks to a positive experience.

At Gladly we refer to this movement as the “loyalty economy,” in which customer engagement and customer loyalty are key to consistent, long-term revenue. The more brands embrace this new approach to customer relationships, buoyed by personalization, the more companies will see the benefits of customer loyalty – building lifetime value and sustainable, scalable businesses.

[Read more: 3 Key Reasons Great Service Drives Higher LTV]

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How Customer Service and Customer Loyalty Drive Revenue

Ecommerce brands, especially growing ones, put a lot of pressure on themselves to invest heavily in customer acquisition. Customer service and customer loyalty, by default, often becomes a secondary goal, or a “nice-to-have,” in order to add some diversity to the balance sheet.

But now, brands are starting to understand the long-term benefits that come from having a customer support strategy that creates customer loyalty. Rising customer acquisition costs have become a major concern for retailers according to a CommerceNext report. On top of that, widespread changes to third-party data collection and customer information regulations, as noted by McKinsey, complicate and drive up marketing costs.

Why Is Customer Loyalty Important?

In a report from Qualtrics, the software company found that 94% of customers who described their customer experience as “very good” were likely to purchase more from the company.

By focusing on creating a top-notch customer experience, brands get bookmarked as being an easy, reliable, and positive place to shop – so much so that the shopper might buy more then and there. Brands are finding they can generate more revenue through loyalty and many shoppers prove this by financially contributing to their favorite brands.

How Customer Loyalty Pushes Organic Marketing

A major value-add from customer engagement and customer loyalty comes not just from what the individual shopper buys but how vocal they are about their experience. Whereas traditional paid marketing becomes trickier with the diminished use of third-party data mentioned earlier, loyalty-driven word-of-mouth and organic social marketing add some much-needed assistance.

People are inclined to be outspoken about brands they love. This is valuable especially for growing brands, as word-of-mouth marketing carries a lot of weight coming from trusted sources like friends, family, and influencers. The aforementioned Qualtrics report found that 94% of customers who described their experience as “very good” were likely to recommend the brand to others.

If you’re following along, that means 94% of customers are likely to buy from a brand again and then tell their friends to do the same, all from a good customer service experience – that’s huge.

Find Out the Benefits of Customer Loyalty For Your Brand

The possibilities for a loyalty-powered brand are clear. When companies strive to create lifetime value for individual customers, they’re rewarded with extended value from word-of-mouth support. Then, the goal for these brands is to figure out how to maximize their loyalty potential. The key is creating the best possible experience, giving shoppers a reason to come back again and again and feel like a truly valued customer.

At the heart of the modern customer experience is creating a connection between brands and shoppers that feels organic, not forced. A support platform like Gladly helps facilitate this radically personal approach using a deep knowledge of customers, continuous cross-channel conversations, smart routing, and people matching technology to make customers feel well-served. When support succeeds at making shoppers happy, brands can see the benefits of customer loyalty by winning over a fan for life.

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2022 Customer Expectations Report

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