Over the past several years, competition in the ecommerce industry has grown exponentially as platforms like Shopify and Bigcommerce continue to make it even easier to start selling online. With these levels of growth, online sales are expected to reach $27 trillion as early as 2020.
Even though these projections are exciting, it also presents a daunting task. In this highly aggressive commerce climate, customers are more aware than ever of how valuable their business is, and in turn have begun to demand increasingly high levels of customer service. These customer expectations are what ultimately inform their level of satisfaction, leaving brands with a difficult question: how can you possibly meet your customers’ needs while staying ahead of the competition?
Answer: Customer Loyalty
While it might seem like a supremely convenient answer, loyalty is the perfect tool for meeting, managing, and exceeding customer expectations with every purchase. But in order to address them with loyalty, we need to understand each of the different types of customer expectations and what they mean in the context of retention and reward marketing.
Understanding Customer Expectations
When you hear the phrase “customer expectations”, you probably begin to think about things like free shipping, good customer service, and mobile-optimized websites. Although these expectations are legitimate, they actually belong to 7 different larger customer expectation categories.
Since customer loyalty is often linked to long-term sales success, it’s the perfect medium for addressing each of these expectations simultaneously – if you know how to use it.
Explicit Customer Expectations
Explicit customer expectations are often based on well-established industry standards and address specific targets that customers expect a product or service to meet.
For many people, loyalty is synonymous with value. Customers understand that by participating in a loyalty program, they can expect to see value clearly and easily. In fact, 41% of shoppers sign up for loyalty programs in pursuit of automatic discounts, while 55% join for discounts of any kind.
These statistics make it clear that value is an explicit customer expectation in the loyalty marketing space. Overall customer satisfaction largely hinges on the immediacy and availability of discounts, which means value needs to be within reach at every step in the customer journey.
While there are definitely multiple ways to make value apparent, there is nothing more effective than welcome points. Offering customers rewards simply for signing up provides an immediate, clear incentive that helps establish your program’s value. Welcome points also accelerate the customer’s path to that first reward, motivating them to make another purchase sooner to continue that positive earning experience.
The Tea Spot is an excellent example of this principle at work. In addition to a number of other ways to earn, customers are promised an added bonus when they create an account – a bonus that gets them significantly closer to redeeming their first reward.
By placing immediate value into your customer’s hands, it’s easier for shoppers to imagine the value of your program. These types of gifts anticipate their need for clear value, and exceed this explicit expectation with tangible rewards up front.
Implicit Customer Expectations
This type of customer expectations are established by other businesses, companies and industries. A good way to think of implicit expectations is with the phrase “compared to the leading brand”; based on the experience delivered by the best brands in any industry, customers begin to anticipate and expect certain behaviours and experiences.
For quite some time, many brands have been focusing the majority of their marketing efforts on acquisition strategies. However, as digital ad costs continue to climb this is no longer feasible. Most brands don’t have the marketing budget to spend $100,000 on one Facebook ad, and as such the interest in retention marketing has been steadily increasing.
This is reiterated by the fact that 57% of brands have pledged to increase their loyalty budget spending this year. With more brands in the National Retail Federation Top 100 jumping on the loyalty bandwagon rewards programs are quickly becoming the industry standard, making them an implicit customer expectation you can’t afford to ignore.
If your competitors have a loyalty program, you need one too – plain and simple. No matter what industry you’re in, customers are now expecting loyalty programs and incentives to improve their customer experience.
Don’t believe loyalty is the new standard? Just look at how many programs are out there in each of these industries:
Thankfully, there’s an equally easy solution. Whether you decide to make or buy a loyalty program, outstanding apps like Smile.io (to be unabashedly promotional) can get you ahead of the curve and back into the competitive marketing game.
Static Performance Customer Expectations
These customer expectations refer to the front-facing elements of your brand that focus on performance customers can see. This can include accessibility, customization, dependability, and so on.
Although it might not be the first thing customers remember you for, your loyalty program should be developed as a fully realized extension of your brand. Treating a rewards program as an afterthought is a severely shortsighted approach, and will ultimately result in a stunted engagement and participation rate.
Recent trends have shown that the key to winning retail customers’ loyalty is relationships. When you forge psychological connections, you can create a bond that is difficult to break and will influence shoppers’ purchase intent for years to come. With this goal in mind, your loyalty program needs to build and push these feelings with every interaction.
The best way to exceed static performance customer expectations with your loyalty program is by paying particular attention to your program’s visibility and presentation. The most successful programs are constructed with an equal emphasis on program performance and branding.
Glow Recipe is a phenomenal example. They’ve taken the time to build a loyalty brand that speaks to the customer’s relationship with their program through unique iconography and a branded rewards currency. These considerations establish a visible, emotional connection with their customers that deepens with every interaction.
You can take this even further by designing additional engaging loyalty content to interact with, like an explainer page or loyalty modal. Making these elements easy to find with on-site ads, tabs, or links in your site’s navigation bar increases your brand’s accessibility and emphasizes your program’s desire to serve and assist the customer throughout their lifetime with you.
With increasing industry competition, consistent branding is more important than ever as it helps you paint a positive picture of your program and, as a result, your brand.
Dynamic Performance Customer Expectations
Dynamic performance expectations relate to how a product or service is expected to evolve over time. These changes could be to customer support, services, or the product itself.
The dynamic performance expectations customers have for your program are very closely related to the implicit expectations we discussed earlier. Loyalty is not a set it and forget it tool, which means your brand needs to be keeping up with the Joneses in order to meet your customers’ evolving needs.
Loyalty programs are no longer all operating with the same “buy 10, get 1 free” mentality that was so prominent in the early 1900s. As more brands begin to diversify the rewards they’re offering and how their program is structured, it’s integral that you follow suit.
Since customer behaviors and the loyalty landscape are changing simultaneously, the best way to exceed customer expectations is to involve them in the development process. To do this, you need to create opportunities for customers to tell you what they like and what they don’t like about your loyalty program. Just because you’re not hearing from your customers doesn’t mean they’re happy. In actuality, only 4% of dissatisfied customers actually communicate their dissatisfaction, making a continuous feedback loop abundantly important.
Bench took huge steps in this regard earlier this year by requesting customer feedback through their email marketing campaign. By offering their customers a reward for their thoughts, Bench was able to create a feedback loop that engaged them and involved them in their upcoming program’s decision-making process.
The key to exceeding these customer expectations is to remind yourself that your customers’ needs are alwaysmore important than your needs. Ignoring this pillar of customer centric loyalty puts you in danger of creating dissatisfied customers with grave consequences. Remember, unsatisfied customers tell two times more people about their bad experiences than their good ones. Keep your brand and loyalty program ahead of the curve by ensuring all of your customers are heard.
Technological Customer Expectations
These expectations concern the evolving state of technology being used in the retail or ecommerce category. A faster pace of development translates to higher customer expectations in regards to available features and functionality.
Changing technology and industry trends heavily influence customer expectations. As soon as new technology is made accessible, customers become comfortable with it and begin to expect using them in day-to-day experiences.
This is especially true in regards to mobile commerce. According to mobile trends, m-commerce is expected to bring in around $284 billion dollars annually by 2020. This accounts for 45% of all projected ecommerce sales. This projected growth is a direct result of customers spending more time on mobile devices, and this increasing commitment to mobile will also bring a new set of customer expectations.
Now, it’s no longer enough to have a mobile-optimized website. Customers are demanding engaging and attractive mobile experiences and expect brands to accommodate these desires. If you don’t, you run the risk of becoming irrelevant.
The rapid growth of mobile commerce gives you the opportunity to incorporate your loyalty program into shoppers’ lifestyles by putting it directly in their hands. Starbucks is undoubtedly the master of this domain. By focusing on developing a mobile app that combines their loyalty program with the pre-existing function of their app, they were able to diversify their rewards experience and add value for customers at every touchpoint.
While Starbucks’ program is extremely elaborate, you can achieve the same level of engagement with a simpler mobile experience. Not to toot our own horn, but programs run on Smile.io allow you to offer a similarly simple, branded, and effective mobile loyalty experience for your customers.
No matter how you decide to build it, optimizing your loyalty program for mobile will ensure your rewards experience meets customers’ mobile shopping expectations.
Interpersonal Customer Expectations
Interpersonal customer expectations reflect the relationship between the consumer and a brand. As more of the world moves towards digital experiences, one-to-one interactions are becoming increasingly important to customers.
Relationships are the backbone of customer loyalty. Building positive associations between customers and brands is what pushes companies to pursue loyalty in the first place, and being attentive and reachable makes all the difference. As with dynamic performance customer expectations, brands need to make themselves relatable and personable in order to truly exceed these types of expectations.
If building strong brands communities is the gateway to exceeding interpersonal expectations, social media is the key. Using channels like Facebook, Twitter, and Instagram allow you to build a sense of familiarity with your customers by giving you a voice to speak to your customers and by joining a community of people who also engage with your brand. These interactions create a shared sense of connection that can increase your program’s engagement rate by up to 168%!
Inkbox has done a really good job of this. As a member of the fashion and accessories industry, Inkbox understands that their customers are passionate about expressing themselves on social media. With this in mind, they offer customers the chance to earn rewards for interacting with their brand on Facebook, Twitter, and Instagram. This exchange makes interacting with their media channels exceedingly valuable for customers, while providing the brand with beautiful user-generated content to feature on their homepage.
Rewarding your customers for engaging with your social channels creates an incentive that ensures continuous engagement and community growth. In addition, you can leverage your most active social followers as brand advocates and turn your retention strategy into an acquisition strategy! With these considerations in mind, you form a three-way benefit loop that ensures your brand provides for your customers’ interpersonal needs: you can connect with them, they can connect with you, and they connect with each other.
Situational Customer Expectations
These expectations are directly related to a customer’s experience both pre- and post-purchase. Situational customer expectations measure the customer’s reactions to their experience from beginning to end, and are largely influenced by unexpected benefits and/or consequences of engaging with a product or service.
The impact of situational customer expectations is very simple: every situation needs to be valuable. Expectations in customer service are constantly changing, and one poor experience with a brand can be the difference between solidifying or breaking pre-existing brand loyalty. As brand loyalty becomes harder and harder to retain, your loyalty program becomes the key to making every interaction count.
By combining each of the considerations we already discussed, you guarantee that your loyalty program can stand up to any customer’s situational scrutiny.
Welcome points create value for shoppers at the beginning of their customer journey, promising even more value in the future.
Developing a loyalty brand will help integrate your program into every aspect of your store, creating a unified browsing experience.
Encouraging feedback opens the gateway for customers to contribute to the evolution of your loyalty program, ensuring the program meets their changing needs.
A seamlessly integrated mobile experience acknowledges your customers’ shift to mobile shopping, giving them another reason to choose your brand first.
Using social channels to build community creates personal connections to your brand that can’t be replicated elsewhere.
Meeting Customer Expectations in Every Situation
At the end of the day, the best way to exceed customer expectations with your loyalty program is to make it the foundation of your marketing strategy. Once you understand the impact it can have on your existing and future customers, it becomes abundantly clear that investing time in its continued improvement and maintenance is the best decision you can make. Who knows? You might even exceed your own expectations in the process.