Five steps to enhance your customer loyalty strategy

Online retailers have experienced unprecedented levels of customer acquisition during the pandemic. ASOS, for example, grew active customers by 3.1 million. This story was repeated across growth retail segments including home and garden, electricals and grocery.

In a nutshell

Customer loyalty is a key battleground as retailers fight to retain their new customers. But market-leading loyalty is more than just discounts; it’s about creating experiences that keep customers engaged, happy and coming back for more.

Take action

Here we outline five ways that retailers can create experiences designed to grow customer loyalty.

Download the Three Pillars of Loyalty report for more

1. Work hard to be simple: Streamlined customer experiences are a major plus point for modern consumers. Research from the brand agency Siegel+Gale found that 55% of shoppers will pay more for simpler experiences.
   
   Simplicity isn’t easy to achieve, however. It takes serious attention to detail, and a thoroughly modern approach to customer engagement.
   
   Online fashion store Sosander, for example, maps out detailed metrics every quarter. This meticulous approach has helped the company grow active customers by 111% in the last year.
   
   
2. Adopt modern methods: Next-generation subscription services are a perfect way to keep customer relationships simple and loyalty high. Lush, Hotel Chocolat and Majestic Wine have all ramped up their subscription channels in recent months.
   
   Mintel retail research, released in October 2020, shows 39% of UK consumers signed up for a subscription or delivery service in the past 12 months.
   
   
3. Win customers’ hearts and minds: Customer data and personalised experiences lie at the heart of successful customer loyalty. To access customer data, retailers must respectfully use it to deliver benefits, such as exclusive products, enhanced discounts or personalised messaging.
   
   According to a 2020 Retail Week-Epsilon survey more than two-thirds of customers are happy to exchange personal information for a more tailored service or special offers.
   
   Dedicated loyalty schemes are a self-funding first-party data asset. In an increasingly regulated environment these programmes create the consent needed to conduct powerful conversations with shoppers.
   
   
4. Embrace first-party data: In a post-GDPR and post-third-party cookie world, retailers need to stay on top of the regulatory environment and expand their first-party data sets. 
   
   First-party data gives retailers an improved customer view and makes performance measurement easier. Loyalty programmes are perfect for collecting this data and creating powerful actionable insights.
   
   
5. Beware the personalisation gap: recent IMRG research suggests retailers are failing to hit the mark when it comes to creating personalised customer experiences. Just 7% of respondents believe retailers do an excellent job in this area, while 29% said they felt retailers didn’t know them at all. When the bar is set this low it’s easy to differentiate your brand.

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The bottom line

Post-pandemic, online retail brands will need to pivot from customer acquisition to retention to capitalise on the increase in online shopping and drive customer lifetime value. Enhanced customer loyalty is a highly effective way to achieve this.