How to build loyalty and increase e-commerce Customer Lifetime Value 1/2

A couple of weeks ago, I ordered some bread flour online from a mill here in Netherlands. Since I confirmed and paid the order, I didn't hear anything from them until about a week later when the delivery arrived. Technically, they had ut fulfilled their duties. But boy, did they miss out on a lot of virtually free chances to really impress me. I might buy there again, but only if they provide better and cheaper products than their competitors. Not because I feel any sense of loyalty towards them.

This example might be extreme. At least, most e-commerce businesses send an order confirmation. Many also a shipping notice with a tracking number. But very few do more than that even though marketing automation is dirt cheap.

It seems that most online stores think that when the order is placed, the marketing efforts are done. They don't realize how much you can gain by starting to build a relation with the customer. Since you've read this far, I think you do, so I'll cut right to the chase and tell you how.

Reinforce their choice in the order confirmation e-mail

Do you have a standard "Thank you for your order" e-mail order confirmation? If so, you have untapped potential right there.

What would you rather want? The customer to know that you are grateful or to feel excited about making their purchase with you, safe in the knowledge that you will take care of them and anticipate the delivery?

Start with the subject and header

"Order Confirmation for order 123456" or "Thank you for your order!" are boring. You want to start with sense of celebration and anticipation. This can be done in several ways depending on your general tone of voice (formal, informal etc), if it's a recurring customers and a lot of other factors, but there are a few examples.

• Congratulations on your purchase!
• Welcome to our family!
• Tomorrow you will have your <product>. Are you excited?

Reinforce your USP:s

You might have a section in your webshop about your USP:s, listing things such as free shipping, free returns, delivery within one day etc. If not, you should. Anyway, it is a good idea to repeat them in the order confirmation as well. This shows the customer that you care even after the order has been placed. It shows that you can be trusted and reinforces a feeling of comfort and security

Use normal language

Most order confirmations read like they are designed by robots for robots. Yes, your customers know that the order confirmation was created by a piece of software from a template. But they shouldn't have to feel that. Use normal language. Don't be afraid to be personal. Use pronouns like You, Me, We and form complete sentences

Let the customer know what happens next

Write a brief (or extensive) section about what will happen to the order next. Describe your process. This will let your customer know that you have a process, what to expect, and they will be much more understanding if there are delays on the way. Infographs are great ways to describe the journey.

Keep communicating

When the customer is waiting for an order, it's almost impossible to send too much information. Send updates on every status change. And even more importantly - send updates if the status hasn't changed within the timeframe it should have.

Not all orders arrive on time. I know it. You know it. Your customer knows it. And if told in a proactive way, will almost always understand. Especially if you do it in a way that shows that you own up to the problem and intend to fix it instead of blaming some circumstances:

"Sorry, we messed up! We couldn't get your <product> packed on time for delivery tomorrow. We will do anything we can to ensure that it is packed and ready to be shipped tomorrow so that you can have it on <weekday> instead."

Few customers would be mad for getting a message like that.

Even when there are no delays, keep communicating. Is the order ready to be picked? Let the customer know that the order is on track. And if possible, be personal. Show that your company is based on people and not just a website.

Have you ever ordered Pizza from Dominoes? If not, go do that right now. I mean it. Do it and you'll know what I mean. They even include names. "John just put your pizza in the oven." "Michael will deliver your pizza soon."

You should do the same. Let the customer know who, by first name, is picking and packing your order. If your staff agrees (most will), you can even include their picture.

Communicate within the delivery

If you don't include a letter in your delivery you're doing it wrong. I'm not talking about a sales catalog, discount codes on future purchases or anything else sales related.

I mean something that builds a relationship. Handwritten notes are very powerful. Just something like "I hope you will enjoy your new jeans. Love, John" is enough.

It can also be a letter telling a bit more about the "Why" of the company. The story. Or practical information. How you can help them if the size doesn't fit or they are not happy with the product. And make it hand signed.

Communicate after the delivery

Depending on the type of products you sell, what the purpose is and wether it's a new or returning customer, you should send another e-mail a few days to a week after delivery.

Don't try to achieve too much in the e-mail, but pick one or two things depending on your CRM strategy. Here are some things you can do:

• Let them know which accessory will work perfectly with the product they just bought
• Let them know how to get extended warranty
• Ask them for a product or Trustpilot review
• Ask if they want to subscribe to your newsletter or follow you on social media
• Give a discount on a future purchase
• Just let them know that you are there for them
• Ask them to participate in an NPS survey

Measure customer happiness

There are many ways to measure customer happiness. It matters more that you do it than which way you measure it, but a common, proven way is NPS surveys. I've written a more in-depth article about NPS here.

If you don't know how happy your customers are, what they are happy with and what they are not, you are in the dark. Running an e-commerce business is a big experiment. You have to constantly try to improve everything, but you can't do that if you don't have data.

If it isn't already, customer satisfaction should be one of your most important KPI:s, and probably the most important long term KPI.

More to come

This article, of course, barely scratches the surface. There are many other things, such as how to keep customers active without giving the profit away through discounts, how to reactivate customers that risk becoming inactive, how to personalize newsletters and many other ways to increase customer lifetime value and loyalty.

I'm currently working on a second part. Make sure to follow me if you don't want to miss it.

About the author

I've worked in e-commerce for over 20 years in different consultancy and management roles. I've helped countless of e-commerce business - from startups to international retail chains - start, grow and succeed online.

Starting from the 1st of June, I am available for a new long-term position within E-Commerce in the Amsterdam area or remote.