Why Is Customer Loyalty So Important in 2022?
Customer Loyalty is currency. Loyal customers are more likely to buy from you again and encourage others to do the same. In fact, on average, 65% of a business’s sales are from repeat customers. Loyal customers also drive word-of-mouth publicity, and this is great for business. Most consumers tend to trust the words of other consumers. That is why retaining loyal customers is critical. Acquiring a new customer is 5x more costly than keeping an existing one! On the other hand, a 5% increase in customer retention increases profits by 25% to 95%.
Engaged customers are loyal and easier to retain. Payments play a big role in creating an engaging customer experience. A clunky payments process can be frustrating and strain your relationships. But, adding a personal touch to your payments helps you engage with your customers and earn customer loyalty.
How Do Payments Help You Build a Loyal Customer Base?
Hassle-free payments can make a big difference to the customer experience – from checkout to debt collection. An optimized payment system helps you gain richer insights based on data and allows you to make informed decisions. Knowing what your customers prefer helps you to respond promptly to their needs. AI-based payment systems let you offer self-service options to customers and give them more control over their payments and spending.
How To Design a Payment Experience That Boosts Customer Loyalty?
Smooth and secure checkout
A smooth and secure checkout lies at the heart of your payment experience. You have to guide your customers through the entire shopping journey in an intuitive and personalized manner – from discovery to payment. There should be minimal friction during the checkout process. You have to allay their fears about fraud and offer top-notch user support when they face issues with their payments. Use analytics and AI to understand how your customers engage with your brand, what they like and prefer. Knowing your customers will help you offer personalized offers and prompt support. Use payment tokenization. Tokenization enables faster payments and keeps card data secure. It reduces payment declines and makes the checkout experience smoother. It improves CX and brand engagement, thus driving loyalty and repeat sales. You can use tokenization for in-store, in-app, or online payments.
Flexibility and Choice
Give flexibility and choice to your customers by offering multiple payment methods and self-service options to manage subscriptions. Popular payment methods vary by country in Europe. Hence, offering the right mix is crucial. Ensure you cover the most popular ones. Here is a list of the preferred payment methods in Europe in 2021. Subscriptions can be a great source of recurring revenue. Offer self-service options to your customers to help them manage their subscriptions with ease. A self-service portal allows them to modify or cancel their subscription when they want or connect with customer support teams. You can use data from this self-service portal to see how your customers are engaging with your brand.
Reduce Friction
Reduce friction in your payments to improve customer experience. Payment failures are a cause of much friction. Use an automated payment system to minimize payment failures and streamline the entire process – from billing to debt collection. Enable easy authentication so that payments are approved smoothly. PSD2 norms in Europe require Strong Customer Authentication (SCA) to keep payments secure from fraud. Merchants have to use 3D Secure 2 to apply SCA. 3D Secure is a security protocol that is in use in Europe. But, SCA can also lead to payment declines, in some cases, falsely. Using 3D Secure dynamically can help you to reduce such declines. Delegated authentication is also an option if you have the resources and use the latest 3D Secure v2.3.
AI-based fraud prevention
Fraud can damage your brand image and take away loyal customers. AI-based fraud prevention tools are a must to track and thwart fraud in real-time. These risk management tools use AI and machine learning to identify patterns in user behavior and report any suspicious activity, helping to stop fraud before it happens. A payment gateway that complies with PCI DSS norms is one of the best defenses against online fraud. A global payment service provider like Novalnet can help you set up 3D Secure and design a PCI DSS-compliant payment gateway.
Design for mobile
The boom in mobile commerce is for real and here to stay. Over 50% of e-commerce sales in Europe in 2020 took place on mobile. Optimizing payments for mobile will help you build better user experiences for your customers and engage with them better. Invest in mobile commerce tools like apps to leverage the rise of in-app shopping and m-commerce growth trends. You can create personalized checkout flows for mobile, based on customers’ location and preferred payment methods. This way, your customers can quickly complete their checkout within minutes. Mobile is one of the most preferred communication channels by consumers. You can better engage with your users through mobile. You can keep in touch with them through personalized notifications and proactive user support to smooth out any friction.
How Can Novalnet Help?
We are a global PSP with deep experience in processing payments for the European industry. Many of Europe’s leading brands trust us to handle their payments. We can help you accept payments seamlessly in 125+ currencies in 150+ country-specific payment methods. Our instant plug-ins get you up and running within minutes and with minimal coding. With our AI-based risk management solutions and advanced analytics, you can securely process payments in a PCI DSS-compliant environment.
Reach out to us to know more about how we can help.
Jose Augustine is the Chief Business Development Officer at Novalnet with extensive experience in European payment industry and a knowledge powerhouse.