How to earn loyalty online

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We know its much easier to retain a customer than it is to find a new one.

The costs of acquiring a new customer run to many multiples of the costs of providing great service to an existing customer.

We all know this – but do we really understand it – viscerally understand what this means?

Robert Cialdini, the author of Influence: The psychology of persuasion had six principles that he found guided how people make decisions that guide their behaviour.

These are:

  • Reciprocity
  • Scarcity
  • Authority
  • Consistency
  • Liking
  • Consensus

In a nutshell, when someone does us a favour we feel obliged to reciprocate. We are galvanised into action when we fear we will lose something. We go with the experts’ views. We prefer to be seen as consistent. We want to be liked. And we often go along with the group’s view.

Things are different online – but the principles that affect how we react don’t change all that much.

The thing everyone wants from their customers is loyalty.

And customers are loyal to brands and firms that they trust.

One of the benefits of the connected world we live in is that it is much easier to redress an information imbalance.

For example, on platforms such as Ebay, the availability of seller and buyer scores and feedback mean that it is a better option to be a good Ebay citizen than a bad one.

It takes time to build a reputation, sale by sale, delivery by delivery.

People often pay no attention when something arrives on time in the expected condition.

It’s when things go wrong that the proverbial rubbish hits the fan.

That means an essential part of doing business online is to act in a trustworthy way. The incentive is to be good rather than take advantage of a customer.

In today’s connected world it’s not enough to be good – one has to make things much easier.

We are willing to pay for convenience. That’s why apps that make it easier to do things from order taxis to order food are changing how we move and eat.

That is a trend that will not change. Many of us are willing to pay a little more to park using our mobiles than carry around the exact amount of change.

So, how do we select with whom we should place our business?

Two of Cialdini’s principles stand out.

The first is that we prefer the most authoritative site. We would rather shop on Ebay and Amazon than on some unknown store or search engine.

The second is that of commitment and consistency. Once we have started doing things and engaging with customers in a particular way, we find it hard to change.

The point is that the online world is different – the content we put on our websites has to earn trust with customers, make things easier for them and come across as authoritative.

If they believe us, then they will engage and place business with us – and once that is done they will be committed and consistent in placing new business.

The good thing about the internet is that it makes information available to everyone.

So, when everyone knows whether we have been good or bad, it makes sense to be good for goodness’ sake.

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