As we all know, customer shopping habits have changed dramatically in the past twenty years. Gone are the days when you would simply see something you like in a shop and then purchase it; there are now so many more stages in the customer decision making process that can be influenced positively or negatively. Technology has acted as a catalyst for this change and it’s become more and more easy to research products, read and post reviews and make the final purchase online. For online shops, this has sparked greater competition and the need to be constantly innovating and creating valuable content. For traditional shops, they come under threat from ‘showrooming’ and are forced to either create an additional online channel, move online completely or come up with new ways to increase customer retention / loyalty. Despite this, only 12% of the average marketing budget is spent on customer retention. Why do brands think it’s not a priority? A 2% increase in customer retention has the same effect as reducing costs by 10%.

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It’s easy to think that customer loyalty doesn’t exist anymore. Some consumers base their purchasing decisions on price alone but this isn’t necessarily the majority. According to 60secondmarketer, 62% of online shoppers are brand loyal but there’s a possibility this 62% are sticking to the larger brands they know and trust. Smaller brands are disadvantaged by a smaller budget but even with limited resources it’s possible to increase your customer retention rate in a short space of time. Starting with the basics, the customer decision making process is a vital element to understanding buyer behaviour.

The traditional model is:

Customer loyalty chart

The problem with the traditional model, however, is that it is a little outdated and in need of a 2016 update. The modifications I would make are as so:

Customer Retention2 (1)

This model might not quite be making it into marketing textbooks in the near future, but the main point is that customers nowadays have higher shopping expectations, seek more approval online and wish to find the best deal available from the most convenient sales channel.

The way to increase your customer retention rate is to tap into these needs and provide a quick, easy, convenient and enjoyable online service. Here are our top 5 ways to increase customer loyalty which don’t involve reducing your prices:

1. Use Product Video

We’ve mentioned so many times why we love Video at DemoUp but today’s key points is that video makes customers less price sensitive because when a video convinces them to purchase the product, it is more convenient to click ‘Add to cart’ than to track down the exact product on a different site. In summary, product videos simultaneously add value and drive conversion rates.

2. Create relevant content

As discussed in our post 5 Ways to use Content Marketing to Drive Traffic to your Ecommerce Shop, content drives traffic and engagement which will lead to customer retention in the long term.

3. Reward repeat customers

Loyalty schemes and personal offers are an effective way to ensure customers stay connected with your brand.

4. Try Relationship Marketing

Place a bigger emphasis on customer consultations and personalisation so that the customer feels valued.

Customer Loyalty

5. Make product quality and customer service a priority

Producing high quality products and offering superior service within the industry is more likely to recieve positive PR exposure and quality standard awards than simply operating profitably. It also leads to a positive brand reputation which is vital.

All of these options are a customer-centric approach which means delivering customer value and creating a culture that puts the customers needs first. With endless choice of internet shops, it’s the brands who have done the customer research that come across well. And once customers have a good experience with a brand that delivers customer value, they become loyal because as humans, we are creatures of habit and familiarity.

Videos in Ecommerce


1. Photo 1 – Pexels
2. Photo 3 – Pixibay
3. Statistics – 60 second marketer

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