Loyal customers who return again and again is a dream that every entrepreneur has had at some point in their journey. Whether it’s having worshippers queue up outside Apple’s retail church, or receiving fan mail raving about how much they think your product is like Starbucks, there’s no better feeling than when your customers keep coming back.
Both brands mentioned above have deeply loyal and satisfied customer bases that they have built and nurtured over the course of decades. What are they doing right, and what is their secret?
What is a return customer?
A return customer is different from a “repeat customer”. A return customer will have made a purchase and interacted with your company once before and has come back to do so (at least once more) again. A repeat customer is one that has returned to your business time and time again, hence why repeat customers are also referred to as “loyal customers”.
A customer can be called a “return customer” after the second time they make a purchase, put in an order to continue their subscription, or are closed by Sales. They’re called “repeat customers” if those things happen more than twice.
Here are five ways that encourage return customers:
1. Actively foster loyalty
Yes, sometimes it’s OK to bribe people. Rewarding users for their repeat purchases and actively seeking their loyalty is acceptable and nurtures repeat customers. According to a study by SumAll, customers who shop once have a 27% chance of making a second purchase, while someone who has purchased a fourth time has a 59% chance of coming back. Offers like “45% off on your second purchase” help bring a value minded user back to your site.
A dedicated loyalty program that rewards every single purchase on an incremental basis is a great way to foster stickiness and create loyalty amongst users, as proven by credit card and airline loyalty programs worldwide.
2. Don’t let them forget you
“Brand recall” is a term that advertisers love. It refers to the consumer’s ability to recognize and associate your products with your brand when they see your message.
A great way to boost brand recall and repeat visits (other than advertising) is product packaging. Fun packaging makes your products stand out, come alive, and in some cases, becomes the very reason why your users come back to you for more. Clothing brand Johnny Cupcakes and their quirky packaging is a case in point.
Taking actions that actively engage users with your brand helps you retain a high recall value and an equally high repeat visit rate. These include reaching out to users to ask about their shopping experience, soliciting their opinions on what can be improved in your service or product, and getting them involved in market research.
3. Offer buyers the luxury of choice
In the days of Henry Ford, customers could order the Model-T Ford in any color—as long as it was black. Unfortunately for today’s marketers, we live in a fiercely competitive world where every customer makes a huge difference to how far ahead (or behind) you are of the competition snapping at your heels. The best brands recognize this and create products with distinct variations to suit different tastes. A Ray Ban fan will almost never touch an Oakley, even though both brands are owned by Luxottica.
Although you might tend to think that keeping your products simple leads to increased customer loyalty, a Harvard Business Review study has found that brands that simplify decision making for the customer by enabling them to weigh all options forged the deepest bonds with their customers. Amazon is a business that does this well.
“Freedom of choice” is no longer limited to product colors or variants. You need to look at creative and practical ways in which you can offer real choice to your users. This extends to key areas like shipping and payment methods.
For example, all e-commerce players offer credit card, bank card, and PayPal as payment options. But to be really ahead of the pack, you have to support all innovative systems as they’re being adopted. If you’re an online retailer, you can be in the hallowed company of Expedia, Amazon, and Asos by allowing shoppers to pay with bitcoins. And if you have a physical store, you might want to join 200,000 other retailers who accept Apple Pay, barely a month after it launched.
4. Redefine customer care
Good, consistent service is critical for retaining customers. Don’t believe me? As much as it’s intuitive to think price is the main reason for customer churn (the phenomena of customers disassociating with a business), the truth is, overall poor quality of customer service is the biggest cause. A customer is also 4 times more likely to defect to a competitor if the problem is service-related, as compared to price or product related.
Also, if you happen to have stepped on a customer’s toes, a dissatisfied customer will tell 9-15 people about their negative experiences—that can result in dire consequences for your business. Even in a negative economy, customer experience ranks high on the priority list for consumers, with 60% of them willing to pay more for a better consumer experience.
One of the key expenses that traditional retail incurs is the unavoidable need for sales staff on the shop floor—something that online retailers and service providers blissfully forget about. For such companies, your customer care staff is often the only human face of your organization. The trouble is that customer care is not cheap.
Ranging from about 35 cents per call for a completely automated service to about $7.50 per call for a live human on the other end of the line, customer care can be a pretty expensive affair.
However, this is one expense that is worth every cent. There’s nothing more frustrating for a customer to call your “customer care” number and be put on hold for eternity. Take a page from Zappos’ customer care playbook. Do away with automated customer care over the phone and get real people at the other end of the line. If your user needs to be on hold for a couple of minutes, fill in their wait time with useful information, interesting trivia, or even a joke to keep them engaged.
Tap social media to reach out to young customers on their favored platforms. Instead of littering your social media networks with cat memes and product updates (which can get horribly boring), use them to showcase stellar customer service, which can be made easy with tools like Zendesk. Brands like Tesco, Vodafone and Nike owe their existence to intense customer focus that spills over into social media as well.
Want to offer a user the experience of speaking to a real person without the added costs? Invest in a live chat tool like Zendesk Chat that offers users the benefit of near-zero wait times and a personalized response to their question, instead of wading through a maze of numbers on the phone.
5. Go the extra mile to make customers feel special
According to the principle of reciprocity, as described by Robert Cialdini in Principles of Influence, when a user feels valued by a brand, she returns the favor by showing special consideration or loyalty towards the brand.
It’s not enough to make a sale to your customer. It’s also important to leave them happy about the entire purchase experience, then follow-up to the purchase and even during subsequent interactions with the brand.
A “thank you” email after a first time purchase shows the user that you value the purchase and look forward to seeing them again. Personalizing your marketing communication is almost a given, with 82% of shoppers stating that they would buy more from brands that personalize the communication that they send out.
Go a step beyond the expected. Include personalized, handwritten (if possible) notes in your packages to provide users a real surprise and that extra warm feeling in their tummies.
A brand can expect loyalty from its users only when it can honestly claim to put the customer first in every interaction. It’s easy to fool a customer with the veneer of sincerity once. But if you want them to keep coming back to you over the years, it’s time to drop the act and get real. Now.
This post was originally published by Zopim. Since joining Zendesk, Zopim has been welcomed into our product family as Zendesk Chat, along with a number of treasured belongings.