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Maintaining Post-Pandemic Customer Loyalty

What was true for customer experience before the pandemic remains true after the pandemic: maintaining customer loyalty is one of the greatest challenges for any small business. Particularly in the digital marketplace, which has seen an estimated 39 percent year over year increase already in Q1 of 2021.

There’s little doubt that brick and mortar is already making a comeback. A recent poll from PYMNTS found that 45 percent of consumers viewed shopping locally to be critical to reinvesting in their local economy. But eCommerce is here to stay. As even formerly hesitant consumers continue to adapt comfortably to online shopping, the need for small businesses to differentiate themselves from their competitors and maintain customer loyalty is a critical one. But are small businesses doing enough?

Loyalty Programs and Consumer Adoption

Recent data suggests an estimated 57 percent of consumers actually desire locally-based loyalty programs; yet at the same time, 25 percent have indicated a lack of inherent value in them. The gap is even greater in online commerce. A 2020 poll from McKinsey found that 73 percent of American consumers were alternating their shopping habits, with 65 percent expecting they’ll continue to do so after the pandemic.

Part of the issue may be that online businesses fail to meet consumer expectations when offering loyalty programs. Incentivizing loyalty might seem like an ideal way to maintain your current customer volume. But customers are becoming increasingly more discerning towards whom they choose to do business with. And if neither your product line nor your service meets increasing consumer standards, no amount of incentivization will be likely to maintain their attention.

Measuring the Customer Experience

A one time conversion doesn’t equal a long term convert. And it’s not just low prices that drive sales. In fact, it’s the opposite. A recent survey from Capgemini found that 81 percent of consumers are willing to pay more for a superior online customer experience. While personalization may be critical to providing a memorable customer experience, what metrics actually result in long term returns?

  • Average Order Value. An average order value (AOV) can be one of the trickier metrics to define for many online businesses, since seasonality and optimal time frames can have a tremendous influence. Amazon sellers may seem to have an advantage due to built-in metrics (in Amazon’s case, anywhere from 30 to 120 days), but off Amazon businesses can also utilize AOV based on their own custom windows. To calculate AOV, simply divide your revenue by the number of orders in any given time period. New businesses should try to estimate their AOV no earlier than a 90 day time frame. To increase your AOV, consider both seasonal and off season promotions, including product bundling—which can be an ideal strategy for liquidating overstock while exposing newer, unproven product lines.

  • Repeat Purchase Rates. If you think investing in your digital experience won’t bring return customers, think again. As recently as 2010, an estimated 88 percent of consumers refused to return to a site due to poor user experience. And with over 68 percent of online traffic coming from mobile in 2020, a fast loading site is crucial to maintaining loyalty. A climbing repeat rate is synonymous with customer retention. To calculate your repeat purchase rate, divide the customers who have purchased multiple times over any given time frame by the total number of customers. A good rule of thumb would be between 60 to 90 days, with a minor leeway for holiday overlapping.

  • Customer Lifetime Value. Even more than AOV, Customer Lifetime Value (CLTV) can be a frustrating metric for newer businesses. That’s because it’s defined by the average value of a customer over your entire lifecycle. And a dip in either repeat purchase rates as well as AOV can affect it. To calculate CLTV, multiply AOV by the number of purchases in a given time frame. Multiply the result by the average lifespan of your customer relationships, and subtract acquisition costs. If you’re seeing a significant dip in your CLTV, look for factors why. Is your product recognizable? Is your niche too crowded? Is your service consistent? Are you seeing any significant ROI from digital advertising? If so, in what areas?

Consumer behavior in 2020 will be the new normal. And providing a seamless digital experience will continue to be fundamental to your business in a post-pandemic world, no matter what your size. You might have a best seller on your hands, but ensuring it meets increased customer expectations may be trickier than you expected. The only thing you can expect is that maximizing their experience means maximizing their attention—and their loyalty.


Color More Lines provides white glove, global account management of your eCommerce platforms so mission-driven companies can focus on new product development, branding and growth strategies. Find out more atColor More Lines.

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