Building Customer Loyalty in Online Retailing

Every day, technology continues to surprise us. Today, we can do a multitude of things with its help, from designing a website to buying and selling online. An example of this is online retailing, which is that process in which customers can enter a website and search, select and buy one or several products from the comfort of their home. This provides advantages such as easy access to marketplaces, such as eBay or Amazon, the possibility to quickly expand the business and to be able to reach more customers thanks to analytical tools that allow an understanding of consumer needs, among others.

So, why is it useful to have this data?

As we know, every day, new marketplaces are being created, new companies and ventures are appearing and, above all, competition is increasing. Therefore, being easily distinguishable to customers is important. This allows the business to stand out from the competition, and, in the same way, it can position itself in first place.

Therefore, it is essential that brands know the ways in which buyers build their relationships with them. Thus, they will be able to capture all that big data about customers and, in turn, individualize each interaction and provide what is known as mass personalization; hence, staying in the customer's memory much longer.

Let's remember that our job as companies is to give the customer power over what he wants and needs. By empowering him, we are telling him that he is valuable and that all the expectations he has in the business will be met. Here, I want to emphasize the high cost of being able to attract new customers via online and the relative difficulty of retaining them. However, this is what makes customer loyalty an essential asset for many online marketers.

A loyal customer is one who feels a certain attachment to the product or service offered by some brand. Said attachment is determined by two aspects: The degree of preference and the degree of differentiation of the product. Likewise, this attachment can encourage three different types of reactions.

1. A strong reaction. In which the customer differentiates the product from the competition easily and quickly. In this type of reaction, the attachment to the brand is high.

2. A moderate reaction. This reaction generates little product differentiation but it can help the customer feel attached and, eventually, generate a multiproduct loyalty.

3. A faint reaction. In this one, the customer does not differentiate the product, does not feel attached to what is offered and does not buy as often.

Building customer loyalty long ago ceased to be a choice for businesses; now, this is considered the only way to build a sustainable competitive advantage. It is an imperative strategy that focuses on key customers, generates a high level of satisfaction in every interaction with customers, creates meaningful bonds with customers by anticipating their needs and replying to them before the competition does.

Loyalty can help businesses save costs in at least six fields, including a reduction in marketing costs, while also promoting lower customer loss, increased sales success, increased customer purchases and encouraging customer recommendation.

Let's remember that the reason loyal customers are usually willing to pay more, are more understanding when something goes wrong and are easier to satisfy is because the seller knows their expectations well.

Globally, customer retention and loyalty are related to the growth and sustainable profitability of the business. This is because by increasing customer numbers, profits will increase. Customer loyalty is the result of a superior quality of service and the trust that this entails.

It is a fact that loyal customers tend to visit their favorite websites much more often than all those nonloyal customers. In this way, we can sense that this type of customer will spend more money on products provided by the companies to which they are loyal.

In that case, how can we build loyalty with our customers?

To generate the loyalty that every business seeks, consider the following objectives.

● Provide great customer experience and customer service.

● Invest in your website.

● Add personal touches.

● Offer loyalty programs.

● Tout more than just low prices.

● Ask questions about the needs of your customers. What do they want? Why do they want it? Do not start talking endlessly; remember that when selling you are not looking to do your own stand-up performance or enhance yourself. A balance between these two is required.

● Give reasons to return.

● Collect information and answer any question the customer may have. ● Talk about the promotions available.

● Explain in detail new or improved products or services.

Attracting customers is not enough; you must also make sure that the customers you win are completely satisfied with the services and products you provide to them, which will gradually lead to customer loyalty.

Long-term customer retention in competitive markets requires the supplier to go beyond simple satisfaction and establish ways that strengthen closeness with the customer and, in this way, generate loyalty that will help the business scale in the market. It is essential not to forget that if the business does not focus on going further than what it already offers, it will be left behind and will not be recognized as a relevant brand.

Finally, I would like you to remember that when it comes to online business, the first thing we look for is the customer’s trust. And, although it is a little more difficult due to the typical lack of direct contact with a provider, there are also positive aspects for online response, such as service quality, reliability, and responsiveness.

Sources:

● Al-Adwan, Ahmad & Kokash, Husam & Al Adwan, Ahmad & Alhorani, Alaa & Yaseen, Husam. (2020). Building customer loyalty in online shopping: the role of online trust, online satisfaction and electronic word of mouth. International Journal of Electronic Marketing and Retailing. 11. 278. 10.1504/IJEMR.2020.108132.

● Bowen, J. T., & Chen, S. L. (2001). The relationship between customer loyalty and customer satisfaction. International journal of contemporary hospitality management. ● Duffy, D. L. (1998). Customer loyalty strategies. Journal of consumer marketing. ● Eroglu, S. A., Machleit, K. A., & Davis, L. M. (2001). Atmospheric qualities of online retailing: A conceptual model and implications. Journal of Business research, 54(2), 177-184.

● Gefen, D. (2002). Customer loyalty in e-commerce. Journal of the association for information systems, 3(1), 2.

● Griffin, J. (1995). Customer loyalty. Jossey-Bass.

● How to build customer loyalty as ecommerce takes over .

● Nguyen, D. H., de Leeuw, S., & Dullaert, W. E. (2018). Consumer behaviour and order fulfilment in online retailing: A systematic review. International Journal of Management Reviews, 20(2), 255-276.

● Rafiq, M., Fulford, H., & Lu, X. (2013). Building customer loyalty in online retailing: The role of relationship quality. Journal of Marketing Management, 29(3-4), 494-517. ● Singh, H. (2006). The importance of customer satisfaction in relation to customer loyalty and retention. Academy of Marketing Science, 60(193-225), 46.