U.S. Chamber: How the pandemic has changed customer loyalty

In many communities, the pandemic sparked a groundswell of support for small businesses. Now that the pandemic seems to be subsiding, however, it’s time to take stock.

There are many customer shopping trends that have changed for good. Curbside pickup, e-commerce, and digital customer experiences are here to stay. It’s unlikely, however, that customer loyalty for small businesses can stay at the high level it reached during the pandemic. That leaves the question: How has customer loyalty changed?

Customer loyalty is “up for grabs”

When the pandemic upended daily life, it also created an environment for consumers to try new shopping behaviors. A McKinsey report found that 75% of consumers tried a new shopping behavior, from e-commerce to curbside pickup to shopping local. Customers were seeking convenience, value, and—especially in the case of Gen Z and millennial shoppers—brands that reflected their values.

This presents an opportunity for business owners seeking to capitalize on customer loyalty. As consumers begin to leave trusted brands for new ones, your business can capture higher market share by responding to these trends.

Go for the emotional connection

Covid fatigue is affecting virtually everyone. Consumers are tired—emotionally, psychologically, and physically—from the toll the pandemic has taken on daily life. As a result, many customers simply want their shopping experience to be convenient, simple, and satisfying.

Rather than rewarding customers for frequent purchases, focus on building a deeper, more emotional connection. This means setting up incentives to retain customers, rather than motivate purchase frequency. “Rewards that make buying things easier—free shipping, same-day delivery, order waiting, volume discounts—will be well-appreciated,” wrote Mastercard. Inevitably, these types of incentives will keep a customer from switching to another brand.

Understand customer’s channel preferences

Online shopping surged during the pandemic, with a nearly 20% increase in online spending since January 2020. E-commerce was the preferred way to maintain social distancing and became the enduring choice for many customers. More than 90% of consumers who tried online shopping became converts, according to McKinsey.

For brands to build and maintain customer loyalty, the digital experience is now of paramount importance. Small businesses must have an easy, intuitive online store. If you’ve already nailed e-commerce, consider expanding into social commerce, which is selling on social media platforms. Mastercard estimated that sales driven by interactions on social media were expected to reach $36 billion in 2021, a 35% increase from 2020.

[Read more: Social Selling: Facebook Creates New Tools for Small Businesses Amid the E-Commerce Explosion]

Personalize the customer experience

Customers expect to be treated with personalized service when they remain loyal to a brand. Personalized messaging is the tip of the iceberg when it comes to driving customer loyalty. Data from your loyalty program, marketing, and customer database can help you craft targeted and relevant rewards, offers, and communications that reinforce loyalty and build trust.

Advanced analytics can help extract data from your customer database and create what are known as “micro-segments,” or smaller target customer groups based on unique traits such as financial status, family relationship, or personality type. When combined with zero-party data, which customers contribute voluntarily in response to surveys, marketers can create hyper-targeted marketing campaigns that make customers feel truly valued.

Be transparent

Finally, customers understand that business owners are facing many challenges, even as the pandemic subsides. Supply chain issues and an unpredictable economy will continue to make it difficult to get “back to normal,” whatever that should look like moving forward. The more transparent you can be with your customers, the more likely it is that they will stick with you.

“Own up to marketing errors, product faults, and corporate missteps. Be up-front about out-of-stock items or extended delivery times and delayed shipments,” wrote MarketSource. “Assure your store policies are well-publicized and understood. Be forthcoming when it comes to your stance on social issues.”

Be transparent with your employees, too. They represent your brand each and every day. When your team members feel loyal to your business, they can pass that feeling on to your customers.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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