Factors Influencing Customer Expectations | Hydrogen Blog
Factors Influencing Customer Expectations

Factors Influencing Customer Expectations

Customer expectations change every year, and their standards have been rising. They recognize that their requirements for loyalty are changing, and many consumers feel that their loyalty is harder to maintain than it ever has been. Consumers’ shopping habits have changed, especially during the pandemic, when they increased dependence on e-commerce.

Retailers everywhere are trying to come up with new ways to bring back and retain customers. However, as old strategies prove ineffective, it’s time for retailers to start looking at what factors influence customer expectations in e-commerce and traditional retail. We have compiled major considerations to make as you develop rewards programs for your customers that will help you establish and build a strong, loyal customer base.

Structured System

Many loyalty methods use a rewards system. A structured rewards system keeps customers happy and incentivizes them to keep coming back. Exclusive rewards and priority service are often the most effective ways to create and increase customer loyalty. One study showed that 43.7% of customers reported they were more likely to participate in a rewards program with a tiered structure with special treatment for members at the top. That number rises to nearly 57% when factoring in customers who are much more likely.

Customers like to feel valued, and your rewards program can help. Most consumers are likely to choose a vendor where they are a premium loyalty member than a competitor that offers a lower price.

For example, the Urban Outfitters exclusive loyalty program, UO Rewards, is a tiered system offering increased incentives with advancement to each membership level. Customers earn points and rewards by making purchases, but the rewards program also offers other ways to earn points. Members begin with an initial 75 points and can earn more by downloading the Urban Outfitters app, joining the mailing list, browsing the UO website, and entering giveaways.

As members earn points, they can advance from the basic membership to silver or gold members. The higher tiers offer additional exclusive rewards, incentivizing members to earn more points. Points reset on January 1 every year, so members start over each year and must earn the points again for the rewards.

By incentivizing members to earn more points — primarily by making purchases — Urban Outfitters created an effective structured rewards system that members can enjoy. The top tier of membership is the most difficult to attain but offers the most benefits, rewarding customers who consistently return and buy additional products. Additionally, the intangible reward of reaching the top tier of membership carries weight to many consumers, which is clear based on the loyalty data.

Instant Benefits

Speed is one of the most critical characteristics of incentive programs. Many customers believe they should receive an award within a few days of redeeming it. The number one frustration, shared among 46% of customers, is the long wait for rewards. If a brand wants to stand out among its competitors, it should prioritize making rewards as quickly as possible after redemption.

Free shipping is the most popular membership reward and often incentivizes customers to invest in a premium loyalty program. Other factors consumers highly value include instant discounts and faster shipping, both of which contribute to the quick rewards that consumers want to receive. Incentivizing users to invest in joining a premium loyalty program may look different than enticing them to renew their membership.

It’s important to monitor the different reasons users give for their membership. For example, the top reasons to join Amazon Prime are likely different than the reasons for renewing membership. While many consumers join Amazon Prime for faster, free shipping, other benefits — such as video and music streaming, food delivery, and Prime Day — frequently incentivize consumers to renew their membership.

A Personal Touch

A personalized customer service experience communicates to customers that their feedback and satisfaction are valued. The communication channel with a customer service representative is the most important factor for customer satisfaction, and most consumers expect a voice call to be the most effective channel. Anticipating a customer’s needs, knowing the consumer’s personal information, and targeted offers are often perceived as less important to a positive customer service experience.

Customers are often willing to pay extra for better customer service. They highly value service that they can control and is catered to their preferences. Companies directly benefit from strong, effective customer service, as consumers are more likely to remain loyal to a brand with personalized services.

Improve Customer Retention

Creating and maintaining valuable relationships with customers increases brand loyalty and retention. Customer retention makes and saves a business money — it can cost five to 25 times more to acquire a new customer than retain an old one. Increasing customer retention rates by just five percent can also increase profits by 25%.

One study reported that 52% of retailers believe that customer retention is the most substantial factor for increasing a company’s revenue growth over time. Customer loyalty programs help businesses keep the best customers loyal. These programs help customers develop emotional connections to a brand based on positive experiences and a sense of belonging and understanding. These customers have a 306% higher lifetime value, which explains why customer loyalty and retention are the number one priority for so many companies.

Create Your Loyalty Program Today With Hydrogen

Effective customer loyalty programs are proven to boost retention for companies, making them millions. If you’re ready to incentivize customers to come back to your business with a loyalty card, Hydrogen is a great place to start. Hydrogen offers an embedded, innovative solution that allows you to design your loyalty program without any coding required.

A loyalty card program is one of the best ways to improve customer loyalty. Hydrogen doesn’t require any coding or tech background, and it’s easy to use and learn. Learn more about our products, or sign up for Hydrogen today to begin creating a loyalty program that incentivizes customers to keep them coming back.


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