Why It’s Important to Build Customer Loyalty

In today’s competitive e-commerce landscape, you’ll need more than customer acquisition to optimize revenue. Loyal customers take advantage of the convenience of your e-commerce shop and can become the lifeblood of your business. In this article we’ll explain why customer loyalty is so important for e-commerce businesses.

What is customer loyalty?

Customer loyalty is a customer’s propensity to buy a specific brand over its competitors. It’s usually earned by showing customers a quality experience and product, encouraging them to return for future business. Customer loyalty often drives return purchases regardless of availability or price, due to their preference for the specific brand.

Why is customer loyalty important?

Customer loyalty markets your brand in the best way possible, boosts revenue, and helps you test and improve new products. Here is a full list of reasons why customer loyalty is important for e-commerce businesses:

Higher revenue

Return customers mean more sales. These loyal customers create a base level of sales that you can count on, which is a foundational building block of any successful business. Once these customers feel comfortable with your brand, they also become candidates to buy additional products, increasing their average cart value.

Brand ambassadors

Loyal customers often act as unofficial ambassadors of your brand, as they speak highly of it to their friends, family, or social media following. These word-of-mouth advertisements are one of the best forms of marketing possible, as they come from a trusted source close to new potential customers. This brand promotion may come in the form of positive reviews as well, as return customers may be more likely to leave one for a product that they know and trust.

Reduced customer acquisition spend

You’ve undoubtedly seen Mark Cuban’s eyes pop out of his head on Shark Tank when he hears about a high customer acquisition cost, and that’s because spending large amounts on drawing in new customers is unsustainable. Loyal customers cost almost nothing and bring in consistent business. This independence from high marketing costs promotes reliable survival income in tough economic times, as repeat customers might be affected less than new customers who are tightening purse strings.

Feedback and product improvement

Feedback is an essential tool for developing and improving products. While feedback is valuable from new customers, feedback from loyal customers gives you an assessment from your current and highest spending clientele. Appealing to the customers that helped you build your business will help you maintain customer loyalty, and their feedback will give you direction into improving products to make them more useful and appealing to customers. The customer feedback from loyal customers helps you understand how your current clientele feel about what you’re doing, and how they think you could do it better.

A loyal customer base has additional benefits as well, like being less likely to churn than new customers, improving the effectiveness of your ads, and keeping shoppers away from your competitors. Prioritize customer loyalty, and you’ll see the positive results over time. Learn more about e-commerce best practices on our website.