Long-term customer retention is one of the surest means of asserting yourself in the online market of the future. Rising competition and the internationalization of online commerce are making it increasingly difficult for many traders and companies to cope with the pressure. Anyone who paves the way now for customer loyalty in the future can save themselves through difficult times and secure sustainable growth.
Sales development in the B2C sector
No question about it, the e-commerce sector is booming. In Germany alone, an average overall growth of 23.5 percent has been recorded since the turn of the millennium. However, starting to appear in 2010, relative increases have been shrinking steadily. Although it was still possible to record growth of around 21.15 percent despite the economic crisis in 2007, ten years later, this figure has fallen by around half to 10.63 percent. (Source: statista.com)
Still, for the year 2018, the statistics company Statista expects a total turnover of 53.6 billion euros (figures that the company published in April of this year). This would correspond to a yet diminished but still respectable growth of 9.61 percent compared to the previous year which saw growth of 10.63 percent.
Put into words, there is still enough potential in e-commerce, only making the most of it for oneself becomes increasingly difficult. Despite rising sales, experts expect saturation in individual market areas by the year 2025. Above all, the higher diversity in supply and more competitors will ultimately lead to smaller absolute numbers in some industries.
Customer loyalty as life insurance
As can be deduced from the numbers, the pressure of competition in e-commerce is already high and will intensify in the coming years. In order to remain successful under these conditions, it is important to win regular customers which function as a kind of life insurance that online traders can rely on in difficult times.
Increasing the focus on customer retention has many advantages. On the one hand, regular customers spend more money on average than occasional buyers and they also usually have larger shopping carts. This is because the former have already had positive experiences with the shop of their choice and are therefore willing to pay higher prices if they can expect the usual quality. In addition, the acquisition of new customers is usually associated with higher expenses than the retention of regular customers.
But even apart from the cost issue, it pays to invest in regular customers, as they give you more independence: people who are convinced of a shop or a service usually tell friends and acquaintances of it. Recommendations on social media also play a decisive role when it comes to getting free advertising for one’s offers. In the end, you also have to put less time and effort into search engine optimization because regular buyers already know where to find your shop and what products can be bought through it.
Tips for getting regular customers
Of course, all of this is easier said than done. Especially in the fleeting Internet age, durability and constancy have become rare qualities. Above all, it takes a lot of staying power, and one should not bury one’s head in the sand before a viable strategy has been tried out. While many roads lead to Rome, the steps below can help you to keep your destination in focus.
First of all, what you need are trust and security. These can be generated through gifts and discounts which ultimately will get you sympathy and loyalty from your customers. Let’s look at these aspects one at a time.
Trust + security = satisfaction
Trust and security are the two most important factors in giving customers a long-term sense of satisfaction. Of course, one can argue that the quality of the products is more crucial for this, but even if you have the best product on offer, that does not mean that customers are willing to buy it from you permanently. Guarantees such as delivery time, costs and the right to return unsatisfactory products show your customers that you are keeping your promises. The smoother the order, payment and delivery processes are, the greater your customers’ confidence in you.
Moreover, through shop certifications, published customer feedback and a good return or complaint management, you increase your customers’ feeling of being on the safe side with you. In general, it is advisable to make extensive product information easily accessible on your website or online shop. This shows that you are well-informed about your offer and gives your customers the opportunity to obtain comprehensive information.
Those who do good will be rewarded. Sounds easy and it is. Show your customers that you are committed to the environment, fair working conditions and sustainability. In short: assume social responsibility. This also increases confidence in you as a seller, as you demonstrate that you are not solely concerned with maximizing your own profits.
Gifts + discounts = joy
Once you have turned visitors into customers, you need to motivate them to buy from you again. The more unobtrusive your after-sales management, the better. Do not bombard your customers with meaningless offers that they do not care about anyway. Instead, you should run a good CRM in order to know the wishes and interests of your customers. Special offers promoted in the form of gifts and discounts increase the likelihood that customers will want to shop with you again.
In addition, you can openly encourage your customers to becoming regular customers. Get discounts and exclusive offers that are denied to regular customers. For example, you can offer VIP customers bonus programs or other bonuses. Also, referral marketing, that is, when customers advertise to other customers, is a good way to increase the sense of connectedness between you and your customers.
Sympathy + loyalty = regular customer
The customer is always right. Although this saying is old, it applies equally to both analogue and digital commerce. As an operator of an online shop you should therefore orientate yourself to it. Only those who feel completely comfortable on your website from their first visit can grow into a long-term customer. In addition to all the above points, this naturally also includes the visual appearance of your online presence. An appealing design is just as mandatory as compliance with the latest usability standards, especially for mobile devices. However, these are criteria that already play a role in the acquisition of new customers.
In the long run, you should be careful to keep a good balance between renewing and preserving individual elements of your design. Recognition value is a decisive factor in customer loyalty and you must always give your customers the opportunity to identify with your shop or business.
In this regard, you should also be careful not to gamble away sympathy that you may have built up after the first successful sale. If you follow the previous points and provide good customer service from the beginning, you are on the safe side.
Of course, sympathy is not everything. Ultimately, availability and convenience determine whether purchases are made from you or from your competitors on the Internet. However, those who succeed in building a sense of loyalty among their customers in addition to mere sympathy have struck oil and may abstain from price dumping.
Difference between digital and stationary commerce
Ultimately, online and offline commerce are not that different from each other when it comes to the relationship between sellers and buyers. In addition to the obviousness that the cost-benefit ratio must be right, trust, sympathy and loyalty are the main factors in the acquisition of existing customers in e-commerce, too. Service orientation as well as security and quality guarantees are just as useful online as offline. Especially in the long term, therefore, the same rules must be adhered to in both areas.
In addition, there are also significant differences that mainly affect the organizational part of doing business. Online retailers need to be aware of the up-to-dateness of their online presence so as not to give potential customers the impression of traveling back in time when they look around your shop. Lack of payment options, bad-quality or no photos of the articles offered, inadequate article information or just a dusty design which, on top, is not responsive, can ruin your business on the Internet faster than in the analogue world. After all, the next shop is only a few clicks away.
The e-commerce sector is undergoing constant evolution. After a rapid rise in the 1990s, the growth figures have shrunk steadily over the last ten years. Even if one mustn’t expect a lull for a long time to come, digital commerce has changed our purchasing behavior forever and it is important to plan ahead accordingly.
Investing in long-term customer retention pays off as it creates a cushion of security to support you in difficult times.
At srtgmbh.com we regularly inform you about current trends and events in the world of e-commerce and will gladly advise you on your individual questions. In addition, as a valued SRT customer, you can be assured that we will set up your online store according to the latest security and quality standards. If you would also like to benefit from the services of SRT GmbH, please do not hesitate to contact us by submitting your request via the contact form.
06.08.2018 According to insider reports, US software giant Microsoft plans to offer a leasing service that will allow Windows 10 devices to be used or maintained for a monthly fee in the future. The abbreviation “MMD”, which stands for “Microsoft Managed Desktop”, has been circulating for several days in relevant news articles on the Internet.
The reports are based on knowledge of Microsoft expert Mary Jo Foley [https://www.zdnet.com/article/microsofts-got-a-new-plan-for-managing-windows-10-devices-for-a-monthly- fee /] and are to be treated with caution, since there is no official statement from Microsoft itself let alone confirmation of the reports. Instead, Foley refers to the company’s job advertisements which allegedly hint at the planning of building a new department responsible for the leasing service.
Bringing together of “Device as a Service” and “IT as a Service”
The idea of leasing hardware, the operating system and various Microsoft software is not new. Microsoft itself already offers such services with Microsoft 365, the Windows 10 Enterprise subscription plan and the so-called Surface-as-a-Service package. Moreover, it is also possible for some Microsoft partners to sell hardware and software bundles under the “Modern Workplace as a Service” (MWaaS) banner quite similar to the MMD model for which it could serve as a template.
With the introduction of the new complete leasing service of Windows 10 devices Microsoft would merely complete the step that had already been announced at the release of Windows 10 and has since been successively tested with the aforementioned leasing offers. Ultimately, Microsoft would therefore merge the formerly distinct areas “device as a service” and “IT as a service”. The current and, as announced several times, last version of the most widely used operating system will then only be offered as a service instead of as a one-time license. A service that would then be maintained automatically and would have to be paid for monthly.
Consequences for MSPs and private users uncertain
The question of whether all end users would be affected or whether the leasing offer applies to corporate customers only remains open. It is conceivable that, initially, the service will be possible for the latter exclusively since they have an increased interest in saving work and time through the remote support service. After all, Windows updates have long been a thorn in the side of many IT employees, as they repeatedly cause compatibility issues.
In addition, it is unclear whether Microsoft will continue to allow individual partners to provide their own remote support, then under the MMD instead of the MWaaS banner. Not only private end users but also so-called MSPs (“Managed Service Providers”) are therefore likely to await Microsoft’s official response with some suspense.
03 Aug. 2018 Google has announced that it has released a new update to the core algorithm of its search engine. As is common practice, the company remains taciturn as far as the specific content of the update is concerned. It’s the same approach they took when they announced the other two core updates in March and April of this year. Again, the company notified the public only through Twitter.
What is a core update?
Google releases updates on an almost daily basis and usually they serve a multitude of purposes. Sometimes it’s about addressing concrete security issues, other times it’s all about experimenting. Often, the latter kind are not even noticed by most observers. In addition, official sources tend to be a little more informative when it comes to these updates, even though you might have to tear the information out of them.
Be that as it may, so-called core updates, that is updates that are aimed at the inner life of Google’s search engine algorithm, are different. These are changes or optimizations that specifically affect the ranking of websites. Consequently, it is not surprising that Google does not announce the exact changes because, ultimately, this would make the update redundant.
How to respond to core updates?
Usually, the effects of the changes will only become apparent a few days after the update has been rolled out. In the so-called SERPs (the search result lists of a search engine), minor changes in the following days should therefore not be overstated. Although core updates are likely to adjust the weighting of individual ranking-relevant factors, it might be premature to make changes to the SEO strategy just yet. Especially, if that strategy has worked well for you so far.
Google has been preaching for years that the company’s goal is to increase the volume of high-quality content and ensure its accessibility. The continuous updates are targeted at interpreting the search behavior of Internet users as correctly as possible. For this reason, anyone who already plays according to Google’s rules of the game does not have to make any major changes, let alone rethink their strategy.
Stay on the ball
For search engine optimizers, core updates are both annoying and a blessing – after all, they keep them busy at all times and push them to stay ahead of the game. Searching for the screws on which Google has turned is tedious and sometimes frustrating. But if you look at the updates of the past few years, you will be able to derive a few points that Google focuses on time and again: the intention of the user, the quality of the content, a clean architecture and compliance with the aforementioned Google game rules.
In turn, it can be deduced that the optimization of one’s own website or online shop should be geared less to the search engine than to the expectations of Internet users. In order to turn visitors into customers, they must feel well cared for. This requires easy navigation of the site as well as answering any questions that may arise in regard to your offer, the order process or other issues.
Internalizing Google’s objective
Google says it does not aim to reward some websites and punish others with its core updates. There are other updates that do that. Of course, not every domain can stay in the first result list, let alone retain first place, permanently. After each update, there will be pages that rise up in the ranking and those that slide down. This does not necessarily mean that the operators of the latter have made mistakes or need to redevelop their entire SEO strategy.
Sliding down can simply mean that Google has reduced the weight of one or more ranking factors in favor of others that have not been covered quite as rigorously by you in the past. Under certain circumstances, search queries no longer match up with the linked content one hundred percent, which of course results in slightly reduced traffic to your page in the short term. However, in the long run, that can change again.
Only those who pay constant attention to a proper site structure and, with a bit of luck, provide the right content at the right time, stay permanently at the top. That means a lot of work, but no-one ever claimed that search engine optimization is a no-brainer.
01.08.2018 Apple CEO Tim Cook has announced that the contactless payment service Apple Pay will be introduced later this year in Germany. The technology giant from Cupertino wants to finally enter the local mobile payment market and profit from the boom in near field communication technology.
Google Pay and “Sparkassen App” with head start
Apple joins ranks comparatively late with other providers of contactless payment services – at least in the German market. In the US, the service has already started back in 2014 and many European partners have since introduced Apple Pay in their home countries. In Germany, the introduction got delayed because Apple faced difficulties in finding financial partners. Most of all, the transaction fee that Apple demands for its mobile payment service was met with much resistance by many banking houses. In the meantime, however, the situation has changed as more and more providers have entered the market and have made the field more diverse.
Recently, more than 300 local savings banks (the German Sparkasse) have launched an app that allows Android users to link their bank card to their smartphone which enables paying at various cash systems that have been equipped with the necessary technology. Google has also attracted a lot of attention with its competing Google Pay offer. With the multifunctional app, which combines several services under one roof, you can not only make purchases, but also send small amounts of money to friends or other contacts. The latter service is not yet available to German users, however.
Wide range of applications thanks to NFC technology
To enable contactless payment, “near field communication”, or NFC for short, is used. This kind of short-range wireless communication technology allows only a few centimeters of range to be used for electromagnetic data transmission. This makes NFC much safer for mobile payment than Bluetooth, for example.
But NFC enables much more than just convenient payment – both in analog and digital commerce. The technology can also be used to retrieve tickets for inspection, to connect to Wi-Fi networks or to exchange files between mobile devices. It is also technically possible to operate door locks. For example, through NFC locks can be opened and closed via smartphone. A function already put to use by Mercedes who have effectively turned the cell phone into a car key.
Jumped on the bandwagon too late?
Of course, Apple has long been aware of the many application possibilities of NFC technology. Nevertheless, so far it can only be used for Apple’s in-house mobile payment service. Although NFC chips have already been built into Apple’s phones and smart watches since the iPhone 6, they are blocked for other applications.
That could soon change with the launch of the new iOS 12 operating system which was presented at the WWDC (Worldwide Developers Conference) in San Jose, California, in June. With iOS 12 Apple users will then be allegedly provided the full range of NFC applicability.
The question remains as to why Apple reacts so hesitant. It is quite possible that NFC was simply not considered as that successful. After all, many of the features that could be run using NFC are already implemented on Apple’s own services – but via a Bluetooth connection. On the other hand, it is not uncommon for Apple to block its products for external developers. In doing so, the company hopes to shield its innovative strength from competition and retains control over economic developments.
In any case, with Apple Pay the German mobile payment market will become more diverse in the near future. Meanwhile, the Deutsche Bank has declared to cooperate with Apple and to offer the payment service by the end of 2018. The Commerzbank has also signaled that it is up for talks.
Hanover, 31.07.2018 The US online payment service PayPal increases the fees that merchants must pay from 31 August 2018 for receiving domestic business payments. The company explains the adjustment in an effort to standardize the fees of all PayPal services and thus to meet the “platform idea” of the payment service.
Affected by the increases are mainly small and medium traders. Based on the monthly transaction volume, 2.49 per cent will be charged on volume up to 2,000 euros, 2.19 per cent on up to 5,000 euros, 1.99 per cent on up to 25,000 euros and 1.79 per cent on up to 100,000 euros. On volume exceeding 100,000 euros monthly 1.49 percent revenue share is applied.
Strengthen traders, protect end customers
From a consumer’s point of view, the increased fees could be noticeable in the medium to long term, although personal transactions via PayPal are not affected by the adjustment. But since small and medium-sized traders, in particular, might find themselves in economic distress from higher fees, it cannot be ruled out that costs could be transferred to consumers.
PayPal does not present a valid economic reason for the increase of its fees for traders. In fact, the company conceals a serious disadvantage that end customers and traders could have from the increased revenue share camouflaged as an attempt at standardization. For critics, therefore, it is clear that PayPal is all about maximizing profits which is hard to justify in times of increased customer acquisition and sustained economic growth.
It remains to be seen how European politics will react to PayPal’s business behavior. EU regulation, such as befalls credit card companies, has not yet been applied to digital payment services. While it’s arguable that more regulation is the key to success, it’s clear that online payment services like PayPal play a vital role in the ever-growing digital commerce. Obviously, there needs to be some form of control.
Videos often speak to people more directly than pure text. Whether on YouTube or Instagram, privately or commercially employed – they are an indispensable part of everyday life for many Internet users. Especially younger generations see them as a natural form of media usage and a proven source of information. After all, they grew up with the format of the short and visually appealing video. The potential of videos for online marketing should not be underestimated. Especially in e-commerce, video contributions can have a tremendously positive effect on the visitors to a website and influence their purchasing behavior.
One could argue that people shopping online expect two things above all else: cheap prices and an almost unlimited choice of products. But that alone does not guarantee that buyers will be attracted, let alone become regular customers. The latter however is a good that cannot be valued highly enough in e-commerce.
As in analogue retail business, it all comes down to putting customers in a certain mood that ultimately determines how they will remember their shopping experience with you. Mood and atmosphere can also be produced on screen – it only requires an intensive examination of one’s own business philosophy and a medium through which it may be projected.
Videos offer the ideal format for a variety of reasons:
- On the one hand, they fulfill several functions simultaneously. Videos of a maximum length of two minutes are enough to introduce the company or the online shop, let employees and customers have their say, advertise the product range or explain the buying process. The pure information function is thus supplemented by the tutorial function, an ever popular feature on the internet.
- On the other hand, videos are versatile. They can be placed directly on the main page or put to use at selected locations, for example as providers of additional information for individual articles. In addition, they can also be linked to various social media channels. If your video is convincing, the viral effect increases the reach of your website immensely.
- Videos put a face to your company’s or product’s name. Even more so than photographs, they help personalize your appearance on the anonymous Internet. Of course, that does not mean that you should completely abstain from using photos. However, unlike photos or still images, video can be better used to give the visitor a more immersive picture of you and your business.
The integration of videos into the content strategy can also improve the search engine ranking of your own website. For instance, Google attaches less relevance to pure text than to moving images.
Linking product videos directly to the item offered on your website will increase the likelihood that potential customers will locate your store more quickly when they search for specific products on the Internet. The thumbnail of the video in the so-called rich snippet (a comprehensive preview of the content of websites that are listed in the search engine’s results page) gives visitors a good idea of whether the listed entry matches their search.
Overall, videos help increase your conversion rate. Simply put, if an appealing video leads to prospects becoming customers or buyers, then it has already paid off. Ultimately, videos are also a great way to turn one-time shoppers into multiple buyers. Linking to other videos that promote other products will increase your cross-selling potential and increase your revenue. If the first video was well received, there is a high likelihood that visitors will watch more videos, even if the product offered in them does not match the original search.
Even if you follow a clear goal of increasing your conversion rate, videos should not be understood solely as a means to an end. Rather, you should pay attention to a harmonious page design, one in which videos, ideally, act as the icing on the cake. As is so often the case, here too, less is more.
Therefore, think carefully about where and how a video can help visitors on your website. It is advisable to start small and monitor how effectively a particular video impacts visitor numbers. Once you have discovered the right strategy, you need to build up continuity. For example, monthly product highlights or special promotions are well suited for being presented regularly in video format.
Videos are part of your marketing strategy and should therefore be devised in close coordination with other elements. Even a good video does not make up for an unappealing design. On the contrary, they could easily reinforce the discrepancy that gives rise to an overall inharmonious impression of the website.
Videos can give your business or online store the edge on the highly competitive e-commerce market. They fulfill several functions that give customers a positive impression of your website and your business. In addition to increasing the numbers of clicks, they strengthen the information content of your website and arouse the trust of your customers.
It is important to use videos selectively (e.g., for product reviews) and fit them seamlessly into the overall design of your web presence. It helps to understand and use videos as part of a holistic marketing strategy.
If you want to learn more about effective marketing in e-commerce, you will find more information in this post by SRT GmbH.