Understanding and leveraging customer data to provide a curated service is the key to ecommerce success.
One study found that 53% of customers would give up personal data for a personalised shopping experience.
This starts by diving into what makes your target customer tick – the types of products they like, their average spend and previous purchases.
When merchants use this information well, more customers will come to trust your brand, enjoy engaging with your brand, purchase from you more and tell others about you (brand advocacy).
Beyond purchasing behaviour and demographics, channeling your customers into a loyalty program allows you to categorise them into three distinct customer segments:
- Loyal: Customers who purchase from you often and have a high customer lifetime value (CLV)
- At-risk: Those who have shopped with you before but haven’t made a purchase within an expected timeframe – this could be weeks or months depending on your business
- Lapsed: If they haven't made a purchase in a certain number of days, weeks or months, they qualify as lapsed
In this post, we’ll look at the ways to leverage loyalty data. In other words, you’ll learn to target customers with appropriate content at the right time to improve the customer lifetime value of your store visitors.
Quite simply, loyal customers are your best and most ideal customer type.
They typically spend more and are worth up to ten times the value of their first purchase. They’ll also tell others about their positive experience with you through referrals and online reviews. This is especially significant since customers acquired through referrals tend to spend 200% more than the average customer.
Once you have identified your loyal customer base, you can encourage these customers to repurchase in a variety of ways.
First, you can nudge them to refer friends to earn points. This proves that you’re willing to reward them even if they don’t purchase.
Meanwhile, you’ll acquire new customers with 16-45% more loyalty as a result. You can also offer a free gift on their birthday to show that you value them not just as a buyer, but as a person.
Wildish, an outdoors and adventure apparel company, have orchestrated a brilliant referral strategy. They offer referred friends 20% off their first purchase, plus a chance for the existing customer to earn 500 “coins” (loyalty points) if the referred friend spends over $20 (an amount that’s both reasonable and achievable).
At-risk customers might have purchased from you in the past, but it’s been a while since they’ve returned.
Your job is to draw them back and remind them why they bought from your store in the first place.
To start, try sending loyalty emails between purchases to keep your brand top-of-mind. Let your email recipients know how many loyalty points they have accumulated and have ready to spend.
You can also tailor these emails based on product interests or past browsing and shopping behaviour — you can find all this info within Google Analytics.
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Beauty Bakerie sends a loyalty email to their customers when their points are about to expire, nudging those customers to return and re-spend:
Alternatively, you can surprise and delight these customers by helping them scale the ranks of your loyalty program. By moving at-risk customers up a tier, you can offer them more exclusive access to your experiential rewards and product offers.
Gym Direct does this well by pushing customers on an upward trajectory to unlock more benefits. This way, customers want to return to your brand and re-engage with the new perks they’ve unlocked. These perks can include tutorials, free gifts or access to an exclusive community.
If someone hasn’t purchased from you in a while, it doesn’t mean they are lost causes. They might just need a pull in the right direction.
Re-engage lapsed customers by showing them why you’re set apart from competing stores.
Make them feel like they’re discovering you for the first time. One way to do this is by notifying them via email of the recent changes you’ve made to your loyalty program.
Annmarie Skin Care uses loyalty emails to remind customers of their focus on environmental initiatives, connecting to these shoppers on an emotional level that goes beyond the product.
Customers are reminded why shopping with Annmarie Skin Care was important to them in the first place — this means they’re more likely to return to purchase:
Alternatively, surprise these lapsed customers into returning by offering access to one-off double points events (as long as they’re a member of your loyalty program).
For example, Nashua Nutrition has run one-day-only double points events to encourage loyalty members to earn more loyalty points by spending within a certain timeframe:
It boils down to data
Ultimately, retaining your existing customer base through data analysis and creating a personalised shopping experience is key to long-term ecommerce success.
This all starts by monitoring your shoppers in Google Analytics, optimising your product pages and understanding your customer segments to retarget with ease and design loyalty programs that convert.
To learn more strategies for improving your customer lifetime value and customer retention, check out the LoyaltyLion Academy.
This is a guest post by the team at LoyaltyLion, a data-driven loyalty and engagement platform trusted by thousands of ecommerce brands worldwide. Merchants use LoyaltyLion when they want a fully customised loyalty program that is proven to increase customer engagement, retention and spend. Stores using LoyaltyLion typically generate at least $15 for every $1 they spend on the platform.