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Measuring Online Loyalty: Everything You Need to Know

Measuring Online Loyalty: Everything You Need to Know

By continuously meeting customer expectations and keeping your promise to deliver real value, you give your customers what’s needed to develop a long-term relationship with your brand. Taking your promise one step further by exceeding customer expectations will further ensure long-term satisfaction and loyalty. Unfortunately, for many online businesses, maintaining customer loyalty has become an increasingly difficult task.

In last year’s Brand Keys Annual Customer Loyalty Engagement Index, examining customer loyalty and engagement with 635 brands in 72 categories, 36 new brands appeared for the first time, a clear indication that customers are actively pursuing brands that better meet their needs.  According to the report, consumer expectations were up nearly 28% from the previous year. At the same time, brands had only managed to improve their ability to satisfy customer expectations by 7%.

The steady increase in e-commerce has contributed to a slow erosion of customer loyalty. The simple fact is the internet provides customers with an infinite array of options. And while many customers switch to a different online brand due to a poor experience, one study indicates that roughly a quarter of consumers change brands simply for greater variety and novelty.

For these reasons, gathering and acting on customer feedback is the key to maintaining loyal customers in a crowded online marketplace. By actively approaching your customers and giving them the power and ability to improve their own experience, you will (1) have a clearer idea of what your customers desire, (2) understand what additional steps you can take to delight your customers, and (3) make it clear that your business is customer focused.

What You Need to Know: The Key Drivers of Loyalty

By gathering customer feedback to maintain and/or improve loyalty, you are taking a proactive stance to better your company. Soliciting feedback will give you an idea of how customers currently perceive your brand and what steps you should take to ensure long-term retention and loyalty.

As with any customer feedback request, you need to begin by making sure you clearly understand the purpose of your survey and communicate that purpose to your customers. Start with a little research. In this case, because you are measuring customer loyalty, it’s a good idea to find out how consumers define loyalty.

Research shows that American consumers identify quality, service, trust, and value as leading drivers of loyalty. Here is a more detailed breakdown of how they perceive each of these drivers:

  • Quality: When 60% of millennials say they are loyal to brands they buy from, and half will choose quality over price, your business cannot afford to overlook the importance of delivering the best possible product or service. You need to gauge the quality of your products and services in contrast to the quality of your competition.
  • Service: Accenture reports that 53% of US consumers switched providers due to poor service in at least one industry but 80 percent of poor service switching could have been avoided through better resolution. Find out if you are responsive and make sure you online experience is easy to your customers.
  • Trust: Loyalty decreases each time trust between customers and a brand is broken. Accenture reports that one of the quickest ways to lose loyal customers is to promise one thing and deliver something else. According to its findings, 84% have found this to be one the biggest frustrations when shopping online. Simply put, if you want to keep your customers, make sure you are delivering exactly what you said you would. Are you always delivering on your promises?
  • Value:  73% of consumers cite price and value as leading factors in how loyal they are to a brand. Therefore, the prices of your products and services must be in line with your competitors’ prices, and in line with your delivery of the other three drivers. How do you compare?

Understanding your customers’ assumptions about loyalty – what they feel is important – is a vital first step to creating your feedback survey. Their assumptions should serve as the basis for your questions and how you interpret the feedback you receive.

Designing Your Customer Loyalty Survey

There are several objective metrics you can measure to see how well you are delivering on the above four key drivers of loyalty:

  • Overall satisfaction
  • Likelihood to recommend
  • Likelihood to continue purchasing same products/services
  • Likelihood to purchase different products/services
  • Likelihood to increase frequency of purchasing
  • Likelihood to switch to a different provider

Loyalty-related questions can be broken out into three different categories.

  1. Measure Retention:

  • How likely are you to continue to repurchase our product/service?
  • Do you intend to make a repeat purchase in the next month/year?
  1. Measure Advocacy:

  • How likely are you to recommend us to friends/family/colleagues?
  • Overall, how satisfied are you with our product/service?
  1. Measure Future Purchase Intent:

  • How likely are you to purchase a different product or service from us in the future?
  • Do you intend to renew your contract with us?

E-commerce businesses should also consider asking questions to find out about customer perceptions of its online store and, specifically, what they might do to improve the customers’ online experiences:

  • How can we improve our website?
  • If you could change on thing about our website, what would it be?
  • What would make your experience on our site even better?
  • How can we improve the checkout process?

The Key to Loyalty: Deliver a Superior Online Experience Based on Feedback

Ultimately, customer feedback should enable you to design and deliver a distinctive online experience for your customer. And e-commerce businesses that best understand what drives customer loyalty – and build an experience around those drivers – stand a much better chance of pulling ahead of the competition and strengthening their customer loyalty.

Building customer loyalty is vital for online businesses that want to succeed. With so many options available, consumers won’t stay with a business that doesn’t make them feel valued. Requesting – and acting on – customer feedback can help an e-commerce business create a lasting rapport with customers that can last a lifetime.

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