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Emotional Loyalty: A Blueprint for Sustainable eCommerce Business Growth

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By Published On: March 26, 20240 Comments

Yotpo's Apeksha Rao delves deep into the strategy you need to build a lasting relationship with your customers.

Standing out in a saturated market

It’s hardly news that the eCommerce and retail landscape today is more saturated than ever. So amid such fierce competition, what should brands be doing to stand out, cut through the noise and stay top-of-mind for customers?

The answer lies in thinking beyond creating stellar products or ramping up marketing efforts, and shifting the focus towards building customer loyalty. Not customer loyalty as you know it: where loyalty is a transactional relationship at best, but ‘emotional loyalty’ built by appealing to your customer’s core values and beliefs and showing them you really understand them with timely, thoughtful, and personalised interactions. 

The need to rethink ‘loyalty’

It’s important to note that simply having a loyalty program does not guarantee brand loyalty by any measure. Take, for instance, traditional, spend-based loyalty programs. As they only reward customers for purchases made, they fail to build any sort of brand advocacy leading to higher risk of churn. Secondly, offers and discounts have the potential to erode profit margins.

Customers engagement graphs

 

 

 

This is why brands need to think about what else ‘perks’ can look like – Meeting the Founder, donating to charities, early access to new products, free and fast shipping are all ways of making customers feel rewarded.

The big takeaway for brands is that transactional loyalty programs provide immediate, tangible benefits, while experiential programs focus on building emotional connections and long-term customer relationships, which can lead to greater differentiation and profitability for the business. 

Here are 3 benefits that a well-thought out engagement-centric loyalty program offers eCommerce and retail brands.

The ultimate competitive edge

Coming back to the saturated market, customers are spoilt for choice when it comes to shopping online. In such a scenario, creating that emotional connection with customers can elevate a brand from being ‘just another option’ to the preferred choice. Creating emotional loyalty begins with a deep understanding of your customers that goes beyond their purchasing and engagement behaviours to include their values, beliefs, causes they’re passionate about and so on. This information is key to understanding what customers care about and what creates value for them, which can ultimately set a brand apart from competitors with similar offerings. 

Increased top line revenue

Studies have shown that loyal customers tend to spend more. Specifically, emotionally connected customers have a 306% higher lifetime value (LTV), according to a Motista study. And according to research by Forrester, on average, loyalty rewards program members spend $99 more than non-members within a typical three-month period. This is certainly the case for Australian fashion e-tailer Princess Polly, who found that loyalty redeemers were their most valuable customers with higher repeat purchase rates and AOV compared to the average shopper. Their tiered VIP program complete with experiential rewards has driven a massive 15.4x ROI for the brand hugely popular with Millennial and Gen-Z shoppers. This benefit is particularly crucial at a time when brands are grappling with soaring operating costs and shrinking margins. Cultivating a base of emotionally loyal customers ensures a steady stream of revenue, acting as a buffer during economic downturns or market saturation.

Sustainable business growth

Beyond the immediate boost to metrics such as AOV and RPR (witnessed by a number of brands including pet-food brand The Honest Kitchen and clothing brand Ministry of Supply) emotional loyalty is also a marker of long-term business sustainability. Most brands are focused on turning one-time shoppers into frequent shoppers. But the real work lies in turning shoppers into lifelong customers and brand advocates. Because each time a happy customer advocates for a brand and shares their positive experiences with their network, the brand grows its audience without having spent any additional dollars. 

In other words, creating emotional loyalty is an organic, much more sustainable growth strategy that not only conserves resources but also builds an engaged, loyal community around the brand.

How to build emotional loyalty and unlock real brand love

For all the amazing benefits it offers, emotional loyalty is not a switch brands can flick on. It’s built over time through consistent positive experiences, and personalised interactions during key moments in the customer lifecycle. This makes it super critical for brands to get started sooner rather than later. 

To help, we’ve created a must-read eBook that builds on the themes covered in this article. “Unlock real brand love: How to build emotional loyalty with customers” throws out old notions of transactional, spend-based loyalty to offer a framework for crafting engagement-centric loyalty programs. It factors in the varied needs of high, medium, and low purchase frequency industries and showcases a gallery of brands winning customers over with their loyalty programs. 

As a retention marketing platform, Yotpo powers the loyalty program of hundreds of brands including Dermalogica, Twoobs, Two Islands, Inglewood Coffee Roasters, and more. Our team is well-acquainted with the retention challenges faced by eCommerce brands and how loyalty programs can help solve some of them – and all that good insight can be found in our eBook. 

From direct impacts on revenue to fostering sustainable, organic growth – the benefits of building a deep, emotional connection with customers are clear. And brands dedicated to understanding – and applying – the principles of emotional loyalty will be the ones to thrive in the face of fierce competition. Ready to unlock real brand love? Download your copy of the eBook here

Author: Apeksha Rao, Content Marketing Manager APAC, Yotpo

Bio: Writer-turned-B2B Marketer and rugby-league nut Apeksha spends her work week researching and writing about the outcomes eCommerce brands can achieve with Yotpo’s retention-focused solutions.

About the Author: Power Retail

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