For businesses that want to build loyalty it can be unwise to compete primarily on price.
As economic uncertainty lingers, it’s tempting to assume that every consumer is shopping for the best deals. Recent PYMNTS research finds that, while nearly half of shoppers are chasing deals, about a third prioritize predictability and reliability over price.
by Rick Sunzeri
That latter group can be persuaded to become loyal if a retailer provides them with the right customer experience. But, as retailers are not mind readers, the best way to create those unique experiences is to have a better understanding of consumers’ preferences and how they differ from the more price-sensitive shoppers.
Price versus Loyalty?
Price is an important consideration for nearly all consumers, even if it’s not the deciding factor. In ClearSale’s 2022 survey of 1,000 online shoppers in each of five countries—the U.S., Mexico, Canada, the U.K., and Australia—price-conscious consumers were found in almost equal proportions at all spending levels. While 76% of consumers who spend $50-$200 per month online said price was an important consideration, so did 72% of those who spend more than $400 per month online.
However, that doesn’t mean price is the only factor, and for businesses that want to build loyalty it can be unwise to compete primarily on price. Customers who are solely focused on finding the best price are unlikely to return to a retailer in the future if a competitor offers a better deal on their next purchase. That tendency makes it nearly impossible to build loyalty and enjoy a high lifetime value (CLTV) with these customers. Competing solely on price can cause retailers to miss opportunities to engage with persuadable shoppers, 63% of whom are motivated by other factors in addition to price.
What matters most to persuadable customers
Ease and convenience mattered most to persuadable customers in the PYMNTS survey, followed closely by price and discounts. Making it easy for customers to find what they need, and making it easy for them to complete their purchases, can help persuade customers to come back for another easy, convenient experience.
Start by reviewing your site search performance. 78% of consumers in the five-country survey said they’re more likely to become regular customers at sites with accurate search results and good filtering options. Your site’s search bar should be easy to find and use, and your filter-setting process should flow smoothly. Adding AI to your site’s search capabilities can enhance your search performance by learning about customers through their on-site behavior and making suggestions tailored to their needs.
Take a look at your checkout process and abandonment rates. Checkout flow online is an element of convenience that can make the difference between a sale and an abandoned cart. In the five-country consumer attitudes survey, 57% said they view alternative payment options like digital wallets and buy now pay later (BNPL) as a convenient way to shop online and 70% of said they prefer to use digital wallets when buying from sites that are new to them.
Make your checkout process as simple as possible while still collecting the data you need to screen the order for fraud, fulfill it, and have evidence in case of a chargeback. Ideally, your checkout should offer digital wallet and BNPL options and minimize the amount of manual data entry the customer must do.
Prevent fraud and false declines. After a customer places an order, there’s one more big ease and convenience hurdle to clear: order approval. False declines of good orders that are mistaken for fraud is a huge problem. While 13% of consumers in the five-country survey reported an online fraud experience in the past 12 months, 25% said they’d had an order declined during that time period.
The overwhelming majority of those shoppers (83%) said they’d never shop again on a site where they experienced credit card fraud. However, 41% said they’d never shop again with a site that declined their order, and 32% would complain about the experience online. Preventing false declines may require secondary review of flagged orders to ensure that simple data entry errors and other resolvable issues don’t result in lost orders.
Cultivate loyalty through consistent positive experiences. The PYMNTS study found that the most loyal consumers prefer to shop with a handful of retailers because they offer reliable and familiar experiences that are easy and convenient. Fast shipping and delivery options, selection, and the ability to easily compare prices were all rated highly by consumers in the consumer attitude survey as reasons to shop online. 75% of those consumers also said a good return policy makes them more likely to buy from an online retailer again. Excellent customer service has a large impact on loyalty as well: 73% of shoppers said one bad customer service experience would cause them to abandon that retailer.
Improving your site’s search experience, checkout process, and fraud screening accuracy can go a long way toward persuading new shoppers to become loyal customers. Providing reliable, positive experiences, from price comparisons through shipping and customer service, can enhance your relationship with newly loyal customers. These experience elements plus reasonable prices can lay the foundation for more durable customer relationships and higher customer lifetime value.
Rick Sunzeri serves as the Director of Enterprise Accounts at ClearSale and is an experienced sales professional with a background in SaaS and complex network solutions. Rick specializes in enterprise-class sales with experience selling business applications to senior business and technology executives. Follow on LinkedIn, Facebook, Instagram, Twitter @ClearSaleUS, or visit https://www.clear.sale.
Photo by Jael Rodriguez on Unsplash
