Building Customer Relationships in the E-Commerce World
Change is the only constant. This is certainly true in the world of retail.
We’ve all seen how the pandemic has transformed the way customers shop, to the things they purchase. In response to the massive consumer shift from physical retail to e-commerce, retailers have strengthened their digital strategies, one of them being the Direct to Customer (DTC) approach. As its name suggests, DTC eliminates the need for a “middleman” in retail so that brands can sell their products and services directly to the end-customers. With the DTC model, retailers are able to reduce costs while simultaneously maintaining direct control over their customer relationships.
Given the growing number of people shopping online and the abundance of choices they are constantly bombarded with, it has become more critical than ever for e-commerce businesses to differentiate themselves. The best way for them to do so is by establishing good and lasting relationships with their customer base. How can retailers build relationships with customers in the virtual space? Will an online community still be relevant to businesses in a post-pandemic world?
In our latest Unpacking E-Commerce Logistics series, we sat down with Jay Myers, Co-Founder of Bold Commerce, and Shane Forster, Country Manager DACH of Reviews.io to answer these questions. Here are some of our main takeaways:
Importance of Building Customer Relationships
Whether we like it or not, it is becoming more and more challenging to acquire customers nowadays. On top of the rising cost of digital advertising, there also exist new restrictions on Apple users that can significantly limit marketing efforts. In Shane’s view, many retailers have come to realize that since they are now paying notably more to gain customers, they might as well get the lifetime value out of them.
There is a great importance of building customer relationships considering the array of benefits that it brings with it. Top of the list are increased potential leads and higher customer retention rates. During the discussion, Jay shared that it is five to seven times more likely to sell to existing customers than to new ones. This would mean that the existing customer base is a vital acquisition channel that would lead to higher conversion rates. Therefore, building long-standing relationships with customers presents a more sustainable way of growing a business over time.
How E-Commerce Can Build Relationships with Customers
Competition in the e-commerce market is stiffer than ever, with each e-commerce business trying to leave a mark on every channel. According to Jay, the key to success lies in the multi-step process — “turning attention into interest, and then interest into a sale, and then trust into a relationship.”
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