What is customer loyalty? It can be many things, but overall it is about making the customers keep shopping at your store and perhaps even recommend your store to others. In doing so, you will also increase sales going forward.
In this article, we will give an idea of what attracts the customers and what makes them come back again and again.
Loyalty programs or customer clubs are very tangible and standard methods, which the retail business uses to get their customers to come back. The programs reward the customers for shopping in the right store/web shop by awarding points or giving discounts. For example, the customer may get a free cup of coffee at their next visit or an upgrade of the service the customer normally buys.
Each year, the retail business spends millions on their loyalty programs, but are such initiatives still relevant, and do they work?
A study from EY shows that the majority believe that their loyalty programs are crucial in respect to understanding their customers’ needs and behavior. But at the same time, 84% of the respondents say that their loyalty program does not have the desired effect. (Read more about EY’s study)
But how can the retail business ensure that the customer returns without having to use enormous resources to win them back?
What creates happy and satisfied customer is overall a good purchase experience. It doesn’t have to be exceptional in all aspects, but it must by no means be bad in even one area. This is supported by a study conducted by PwC that shows the consumers’ loyalty is strengthened by the purchase experience, which creates psychological connections and not only points and prizes (Read the summary of PwC’s analysis).
PwC’s analysis shows that it is the total purchase experience that makes the customer return. But what affects the purchase experience? We have compiled 7 areas, we believe, you should be aware of:
The customers must be able to trust the price is correct and competitive, no matter which channel they decide to make their purchase on.
It must be easy and uncomplicated to shop. If the customer has found the product in the store, the product must also be easily found and bought on the web shop and the other way round. At the same time, it has to be easy to return products, no matter what the customer chooses to buy. If the product is sold out at the store, the store staff has to be able to find and order the product if available in other stores or online. And if the product is bought online, the delivery time and price are an important factor. It’s about giving the customers a free and effortless choice and make it easy to shop.
Queues can be a major problem in the stores and if they are particularly long, it can make people leave the store and not want to come back. Raj Parmar, marketing director at Box Technologies, says in a study about queues in stores: "These results demonstrate more clearly than ever how long queues are leading to lost sales and badly affecting profit margins, turning shopping into a seventh hell rather than a seventh heaven."
Other than in the store, waiting time on the web shop can also be an annoyance. If there are too many steps or if it generally takes too long to reach the confirmation of an order, people will leave the shop without having bought what they came for.
We all know, when we leave a store, in which we have been treated well and received a good and effective service. It is a nice feeling, which makes us want to come back. Similarly, bad service makes us not want to return. This may be due to slow service, inattentive and unhelpful staff, but perhaps also an intrusive contact. In order to achieve good customer service, the staff must of course be obliging and friendly, but they must also be able to access to the correct information quickly. Therefore, it is very much about helping the staff to be able to help.
Is there any information that we as a customer need in the store, and are there enough employees available in the store so we can receive the assistance that we need? It is all crucial for our shopping experience in the store. If we’re in doubt about something and cannot find the solution or get help from the staff, there is a great risk that we will leave the store.
The product on the shelf has a pivotal role in the overall purchase experience. If the products often are out of stock and the quality is fluctuating, the impression of the store and the actual purchase is affected. Therefore, it is vital that you as a retailer can quickly form a general view of the products in the store and in stock and thereby familiar with the level of demand.
The store experience is important whether it’s in the physical store or online. If it seems unorganized, hard to know your way around and badly arranged, it can result in customers leaving the store. Whereas, clean, tidy and easily accessible stores make it nice and easy to shop and thereby increase inclination to return.
Thereby, the good purchase experience is determined by many factors and not just point systems and discounts. Customer clubs and loyalty programs are still good methods to get the customers to return, but only as pieces of a greater puzzle – all pieces have to lie correctly in order to create loyalty.