Three Pitfalls to Avoid in the Quest to Build Customer Loyalty
By Anna Ho, Associate Director of Strategy
“Help us drive customer loyalty.” This is a common ask we get from our design and innovation clients, and it is a business goal that stumps even the most experienced of digital product makers. The problem is, price and quality are no longer enough to set a product apart. Empowered by choice and information, consumers have become increasingly selective, seeking products and services tailored to their needs, preferences, and values. Moreover, consumers are quick to dismiss a brand if they’re not finding what they are looking for. According to a study conducted by Alliance Data’s Analytics and Insights Institute, “76% of consumers only give brands 2-3 chances before they stop shopping them.”
The reality is that customer loyalty, as with any relationship, must be cultivated and maintained. There is no shortcut.
One of the most immediate threats to customer loyalty is the novelty cliff; that moment when the newness of your innovation has worn off and customers have determined what they have to gain from using your digital product. The novelty cliff is easy to spot in the analytics. This is that engagement drop-off you see typically within the first couple of weeks of app/site use, following onboarding.
Sometimes it can feel like you only have one shot to make an impression. Localytics, for example, found that nearly 1 in 4 users abandon a mobile app after first use. In our experience, in only takes a few sessions for a digital customer to discern whether or not your product or service is worth their time.
So then, how can a digital product maker build customer loyalty in the face of such fickleness and quick judgment from customers? When it comes to fostering customer loyalty, we believe in taking a relationship-centered approach to design that is rooted in an insights-driven understanding of customers and how they engage with a product. If you are invested in fostering customer loyalty through your product or service, here are three common pitfalls to be aware of and what you can do to avoid them.
Pitfall #1: Overdone onboarding
Onboarding, like all first impressions, is a critical first step in forming an impactful relationship with customers through your product or service. On a functional level, the onboarding process serves as a brief introduction to your product. The problem is when product designers approach on-boarding as their one and only chance to make an impression on the end-user and capture pertinent user details. This sort of thinking typically leads to a multi-step, info-laden registration and onboarding process that users find to be over-involved, time-consuming, and in some cases, too personal, too soon.
How to avoid this pitfall: Build relationships, not just experiences.
The purpose of onboarding is not just functional. The onboarding process for any new user should be approached as the first step in a larger “getting to know you phase,” aimed at building rapport with users and cultivating a sense of trust. The onboarding experience must be put in context of the holistic customer journey with your product or service. Business and functional requirements need to be counterbalanced with the needs and expectations of a first-time user. How does the experience you provide customers through the onboarding process support your long-term relationship strategy?
Some questions to consider:
- Is your product making a favorable impression from first use?
- What’s just enough information to get to know a customer during onboarding?
- What can your product/service do from the get-go to show customers that the information they shared is being used to personalize their experience?
- Are you allowing your customer to explore and get to know your product or are you forcing them to commit to your product from the get-go?
Pitfall #2: Faulty assumptions
Analytics provide an objective measure of user engagement and are a great tool for understanding trends in behavior over time or engagement with specific features. However, when it comes to understanding the why behind such behavioral patterns, it’s easy for product designers to infer their own assumptions or biases. For example, when examining the high abandonment rate during onboarding, a person might surmise that onboarding has too many click-throughs, an issue they’ve raised since the inception of the design. However, this assumption overlooks the fact that abandonment may actually be attributed to something else entirely, like the content or tone of the onboarding flow – factors unrelated to the interaction.
How to avoid this pitfall: Understand customer behavior in context.
Context is critical. Analytics will tell you what users do, but they won’t tell you why. Ongoing feedback from customers is the most effective way to understand the why behind customer behavior. Be it through focus groups, surveys, or an analysis of customer service calls or reviews, it’s important to gather feedback from customers on how they actually use your product or service and why so that you know what’s driving user behavior, not what you think is impacting user behavior. The combination of qualitative and quantitative user insights helps product teams to have a more complete view of the customer experience and understand how customer needs, behavioral patterns, and experiences evolve over time. Keep in mind that as your customers become better acquainted with your product or service, the way they use it will likely change.
Some questions to consider:
- What are the situational factors that influence when and where your customers typically engage with your digital product/service?
- Where does user drop-off happen and what is driving drop-off?
- What does habitual use of your product look like and what is driving such regular use?
- What does a casual use of your product look like and what triggers this occasional use?
Pitfall #3: Shortsighted incentives.
Popular schemes to boost customer loyalty typically center on loyalty programs or a gamified system of rewards and badges. These schemes can be very effective in extrinsically motivating customers to engage with your digital product or service, but are no assurance of customer loyalty, especially if a better offer comes along. Just think of all the loyalty membership cards you have abandoned in your desk drawer. Rewards can be enticing, but the question is, for how long? Problems emerge when digital product makers set up rewards systems without understanding what drives the behavior of their target customers and how motivations vary over a lifetime of use.
How to avoid this pitfall: Design for motivation.
What motivates a customer to use a product or service at the start of a journey may be entirely different from what motivates them to use a product after three months, six months, a year, etc. The engagement drop-off points you identify through analytics are key indicators of critical stages in the relationship with your product or service. Designing for user motivation, with approaches such as our Motivational UX framework, is key to transforming usable products into engaging experiences with lasting impact. The user experience design of your product should reflect an understanding of the motivators that drive long-term user engagement alongside motivational boosters than drive engagement when users are at risk of dropping off or the novelty of a product as worn off. What are both the intrinsic and extrinsic rewards that keep customers coming back to your digital product or service?
Some questions to consider:
- What motivates customers to engage with your product/service initially? What motivates them to get to know the product and explore?
- What motivates customers to engage with your product/service regularly?
- What motivates customers to keep using your product/service when they feel likely they’ve gotten everything they wanted from your product/service?
- What would motivate your customer to re-engage with your product/service after not using it for a prolonged period of time?
Relationships drive customer loyalty.
If your intent is to garner customer loyalty for your digital product or service, you need to start by asking yourself what you are doing to foster a relationship with your customers? As with any relationship, what steps are you taking to learn about your customer, as well as give them an opportunity to learn about you? Furthermore, once you’ve earned their trust, what will you do to deepen the relationship and show customers that you don’t take their loyalty for granted? A user-centered approach to design may lead to engaging user experiences, but it’s a relationship-centered approach that fosters long-term engagement and loyalty.