If you know how to retain customers and stop dropouts in the Ecommerce ring, you’re talented in customer retention. And, if you know how to put up a great show and maintain existing ones, then you have a knack for setting up customer loyalty programs.
But, we’re here today to shed light on a mind boggling question:
“What’s the difference between Ecommerce customer retention and loyalty?”
Evidently, in the business dictionary, these two terminologies could be used interchangeably, and not many can tell them apart.
However, that doesn’t necessarily point to a retention program that is similar to a loyalty program; there are some meaningful perspectives to each, and we’re going to find out what they are.
What’s Customer Retention?
Customer retention can be described as a brand’s collective marketing activities and programs to incentivize customers to give them repeated business over a certain period. In more straightforward phrasing, a company tried to convince customers to buy from it one more time.
Investing in higher customer retention rates saves the brand from extinction and depleting resources caused by hefty acquiring new leads. It’s easier, more profitable, and it’s a powerful way to stand out.
In today’s Ecommerce atmosphere and the competitions turning the arena into a digital bloodbath battleground, customer retention marketing strategies are protective shields that save brands and stops customers from falling victim to rival’s marketing strategy.
If an Ecommerce business is to grow, it should incorporate retention marketing into its overall marketing strategies; since retention is a low-cost move. Simultaneously, losing customers left, and right doesn’t bode well with brand growth and brand awareness enhancement. So, there’s something to think about.
What’s Customer Loyalty?
Customer loyalty or loyalty program refers to a brand’s focused marshaling efforts to keep an existing line-up of customers happy and engaged. The brand’s marketing team makes a stride to provide an enjoyable, convenient, and fun experience for customers who have been on board with the company and show potential to become permanent buyers.
Customer loyalty strategies come in exceptionally handy when a brand’s on the verge of expansion and growth. As the premise of company growth demands every little resource be spent, loyal customers become extremely valuable and essential in creating a free source of reliable income.
Loyal customers stay by the brand for the longest time and consider their views and beliefs close to the brand statement and mission. They take pride in sticking to the company, cherish its values, and uphold its standards.
Most Ecommerce loyalty programs should support their loyal customers since they are more likely to spend time and money purchasing brand products and fulfilling a pure-profit dream.
That being said, loyal buyers and followers don’t only bring in money; they bring new customers, too, like costless selfless referral marketers. That’s why you should always have an Ecommerce loyalty program that builds connections with the customers.
What’s The Difference Between Customer Loyalty and Retention?
The first difference between a retained customer and a loyal customer lies in their shopping behavior. While a retained customer may buy from your brand, a loyal customer will surely put you on the top of their shopping destination list, boosting your return purchase rate.
Keep in mind that a retained customer might not have found a competitor yet or hasn’t heard of any alternatives.
This could mean that the customer is somewhat satisfied with their user experience and needs more attention and time before becoming loyal to the brand.
Another difference between customer loyalty and retention is that customer loyalty gives us a customer satisfaction meter. It basically depicts the level of content the customers are at and how they interact with the brand; are they satisfied with their connection to your brand’s outbound marketing programs and the total experience or not. If customer satisfaction rises, repeat purchases will go up too.
Another key point dividing loyalty and retention is how customers proceed with advocacy. As we shortly explained in our “customer retention marketing strategy” piece, a loyal fan is more likely to spread the word and bring in new businesses/customers.
Furthermore, a retained client doesn’t necessarily believe in your products/services; hell, they might even be thinking, “I don’t have any other choice.” If you’re THAT brand, well, flash news: you’re at risk of losing the customer. If your solutions/products don’t meet up with retained customer’s expectations, sooner or later, you will lose them – because they’re going to find the real quality, sooner or later.
The chance for cross-selling is another point where customer retention falls short in comparison to customer loyalty. For a loyal buyer, getting their hands on your desired product/service on multiple channels and platforms is just another bragging right. Loyal fans are your business’s most valuable prospect, and you should attend to their needs. So, get creative and design tailor-made marketing campaigns that enhance their experience and blow the brand awareness horn.
Did you know that Markight Customer Data Analysis Platform, helps you identify loyal customers from non-loyal customers? Also by using the RFM segmentation model you can send them a personalized message based on each group of customers’ behavior. If you want to get acquainted with this platform and improve your E-Commerce business retention marketing strategies, fill out the form now so that we can contact you.
The Correlation Between Customer Retention & Loyalty
While it’s vital to realize where to draw the line between customer retention and loyalty, it’s even more crucial to blueprint when they overlap.
It all comes down to the transaction and the revenue customers bring in.
Customer retention highlights the numbers earned through retention marketing and the act of persuading half-satisfied or dissatisfied consumers. So, everything is happening around the transaction.
On the other hand, loyalty marketing narrows down on what happened before the transaction, what makes a customer happy, happier, or unhappy. It tells you what transforms an uncertain customer into a die-hard shopper and a die-hard shopper into a till-death-do-us-apart loyal frequenter.
Thus, if you want more reliable customers and an enhanced user experience, you need to develop a well-thought engaging loyalty program.
So,please note that: “enhanced customer loyalty results in enhanced customer retention.”
The difference between customer retention and customer loyalty shows how far the E-Commerce community has drifted from acquiring new consumers and loves to maintain the existing ones. If you’re still struggling to distinguish these two, we can help you with that. We can also help you develop marketing strategies to transfer retained customers to loyal ones in time.