Here's the Best Way to Increase the Lifetime Value of Your Customers Don't miss the opportunity to leverage this key aspect of the customer experience to protect your margins, boost customer retention and increase your customer lifetime value.
By Johannes Panzer Edited by Kara McIntyre
Opinions expressed by Entrepreneur contributors are their own.
It's no secret that the customer experience is foundational for converting more shoppers to drive revenue and creating brand loyalty to convert guests into lifelong regular customers. Ecommerce retailers around the world are (or should be) obsessed with creating a simple, frictionless and personalized customer experience — the kind of customer experience people tell their friends about.
Roadblocks to positive customer experience
The road to a differentiated customer experience can be rocky; however, retailers must find new ways to meet customers' increasing expectations and desire for personalized interactions while repairing the trust that has been damaged due to recent supply chain disruptions. Throw inflation, the threat of recession and labor shortages into the mix and cracking the code becomes trickier.
As many work to rebuild relationships and transition guests into known customers, ecommerce vendors must manage various customer-related challenges, from "checkout ghosters" to disgruntled customers dissatisfied with their home delivery performance. For example, did you know 70% of customers abandon their carts before completing a purchase?)
On the last-mile delivery front, a recent study found that 67% of consumers experienced a home delivery problem in the three months surveyed, with 68% of those consumers taking some form of action against the retailer or delivery company. What brand can withstand that level of retribution?
Related: 5 Ways to Provide a Positive Customer Experience in Ecommerce
Home delivery — missed opportunity
Don't make the common mistake of underestimating the power of a positive customer delivery experience to differentiate your brand, drive sales, create lifelong customers — and contain delivery costs. On the flip side, be aware that poor delivery performance can compromise the customer experience and irrevocably damage your brand.
Indeed, a 2022 study found that customers who had experienced delivery issues hadn't ordered from the retailer again (23%), while 16% told family and friends to avoid the retailer — a figure that has the potential to cripple a brand, given the speed with which these experiences can be shared across social media and messaging platforms.
Related: Buyer Personas: What They Are, Why They Matter and How to Best Build One
Moving beyond buyer personas
While every retailer worth their salt recognizes the value of creating buyer personas to inform marketing strategies, many are in the dark about delivery personas. But delivery personas are equally powerful, with the ability to nurture brand loyalty, add incremental revenue and reduce operational costs to increase top- and bottom-line performance.
In plain terms, customer delivery personas incorporate a mix of delivery speed, accuracy, extra services and insight regarding delivery choices (e.g. most eco-friendly) to help retailers create a range of delivery experiences tailored to their customers' individual preferences.
Here are five delivery personas that ecommerce businesses should consider when shaping delivery strategies and helping personalize the customer experience to turn guests into lifelong customers:
- Price-conscious: For these customers, the cost is the be-all and end-all. These individuals are highly price-sensitive and will prioritize delivery fees above all else. They will opt for the slowest shipping method available if it means they can save some money. The time of delivery is also of little importance to them — they're willing to wait days for their package (as long as it arrives within a reasonable timeframe).
- Parcel-centric mindset: These customers' prefer a speedy, hassle-free delivery of their smaller items, such as apparel and accessories, that are typically delivered quickly without needing to be present for a specific delivery time. For example, they're content with their package being left on their doorstep at any point during the day and are typically not concerned with a time-definite delivery. This specific persona also appreciates the convenience of receiving their package quickly without having to wait for a specific delivery time and are satisfied with the fast delivery cycle offered by most ecommerce companies.
- Convenience is key: These customers value precision over speed. They have a specific time window in which they need their items delivered and prioritize convenience over quick delivery. This persona often includes customers purchasing larger items, like appliances or furniture, who need their delivery coordinated with the installation date and other tradesperson availability. For them, a seamless delivery experience is crucial and can significantly impact their overall satisfaction with their purchase.
- Time is money: This group of consumers prioritizes their time above all else and are willing to pay a premium to have their high-value purchases or replacement items delivered ASAP. They want their delivery to fit around their busy schedules and are willing to pay for the convenience of having purchases delivered in a timely and efficient manner — and it doesn't take too many of these types of customers to offset a significant amount of your overall delivery costs.
- Eco-friendly focus: With a strong desire to reduce their carbon footprint, these consumers are on the lookout for companies that prioritize sustainability and environmentally-friendly delivery options. They aren't just interested in the product but are also seeking a commitment to eco-friendly practices from the companies they shop with. These customers are willing to be flexible in terms of delivery time and speed, especially if it aligns with their environmental values. They may even be interested in grouping orders when you have deliveries in their area or may be keen for you to recommend the most sustainable delivery option.
Given that 65% of consumers consider the environment when placing an order — and some customers, especially Gen Z and millennials, are willing to pay more for eco-friendly delivery — the sustainability delivery persona represents an excellent opportunity to lower delivery costs by reducing the number of deliveries, increasing delivery density and allowing for better planning with longer lead times.
Related: How to Increase Customer Lifetime Value And Boost Profits
Using delivery personas to give customers what they want
Offering delivery options at checkout gives customers the choice to select which option best suits their needs for any given purchase— which can translate to a welcome revenue bump. Case in point: A 2021 study suggests that 71% of consumers expect companies to provide personalized interactions — and 75% get frustrated when this doesn't happen.
Personalizing delivery options using delivery personas opens up new opportunities to delight your customers. While low cost and speed are obvious choices, delivery preferences differ depending on what type of product is purchased (e.g. groceries vs. appliances). Offering value-added services like contact-free delivery and sustainable options, or the ability to book a specific date or delivery window, are extremely valuable delivery persona preferences that foster customer loyalty and sustained growth.
Not every persona is relevant for every buyer and there isn't one that takes first place — rather, a combination of them will create an extraordinary customer experience that takes into consideration how fast a delivery can be made, its accuracy and its cost. Don't miss the opportunity to leverage customer delivery personas to protect margins, boost customer retention and increase customer lifetime value.
