It’s no secret that retaining existing customers costs a lot less than acquiring new ones. As a result, not only do retailers save on overheads, but studies show that loyal customers spend on average 31% more than new customers. Now we know why we should focus on customer retention, let’s consider how we can do so.
One powerful strategy that has emerged, is the integration of digital credit accounts into e-commerce sites. This not only offers customers a convenient payment option but also paves the way for nurturing a long-term relationship and turning customers into brand advocates.
Traditional loyalty programmes have long been the foundation of customer retention strategies. From reward points to exclusive discounts, these initiatives can produce results but fail to address the biggest barrier to purchase facing consumers - affordability. This is where digital credit accounts come in – with the simplicity of Buy Now Pay Later and the functionality of a credit card account, this payment method gives customers the option to spread payments over manageable instalments.
One incredibly powerful feature of digital credit accounts is that consumers are given a preset credit limit that exceeds the initial purchase cost, immediately encouraging repeat use. This feature fundamentally shifts the buyer experience, turning it into an opportunity for customers to access additional purchasing power, driving a sense of empowerment and financial freedom.
Deko's Newpay digital credit account, for instance, demonstrates this concept by offering customers a substantial credit line of up to £5,000. This ensures that customers are not only able to complete their intended purchase but also secure an approved credit balance for future transactions. This novel approach to purchasing resonates with customers, as it instils confidence that their financial needs will be met, without requiring a reapplication process for each purchase.
The virtual checkout is a crucial component of your customer journey, which when optimised drives positive brand perception and customer experience. Retailers should avoid offering their customers finance through products that are plagued with issues or have poorly designed application forms. This means the streamlined payment experience of digital credit accounts is a core advantage of its proposition, whilst also providing a secondary benefit of reducing cart abandonment rates and therefore increasing overall sales.
Digital credit accounts additionally offer the advantage of giving customers the ability to log in and complete a purchase in a few clicks, without needing to re-enter a host of personal information. The intuitive UX gives customers a better way to manage their payments, with the ability to merge repayment plans from multiple purchases into a single recurring monthly payment. The financial empowerment and control that digital credit accounts give customers, encourages them to return to the retailers that offer this type of payment method, boosting customer lifetime values and again sales as a whole.
Trust is a prerequisite to building loyalty and it’s also particularly important when it comes to payments. For those customers who choose to pay with finance, the option to pay with a digital credit product that is financially regulated can be key to boosting confidence. This is because regulated products are subjected to consumer protection rules that ensure customers are treated fairly.
The integration of digital credit accounts into e-commerce sites marks an important stride toward fostering customer loyalty and retention. By offering a seamless shopping experience and financial flexibility, retailers can create a compelling financial offering that relates to customers on a personal level. As brands invest in nurturing these long-term relationships, they can transform satisfied customers into enthusiastic brand advocates, setting the stage for continued growth and success in the ever-evolving world of e-commerce.
This article has been written by Deko, a single payment platform that unlocks the benefits of credit for every retailer and every basket. Deko is a checkout finance platform that helps merchants drive up basket size, conversions and customer numbers. Its multi-product solution includes Newpay, a digital credit account that allows customers to break down purchases into monthly payments; offering up to a £5,000 credit limit which can be used across multiple purchases.