E-commerce tips: How fairness leads to customer loyalty
Customer loyalty is considered one of the most important outcomes for e-commerce businesses. How can you turn visitors into loyal customers?
Loyal customers are your most valuable asset
From 40% to 75% of a company’s revenue comes from the repeat business of existing customers
77% of consumers say they’ve remained loyal to a specific brand for 10 years or more
Companies that offer positive customer experiences receive three times more word-of-mouth marketing than companies that offer dull experiences
57% of consumers spend more with companies they’re loyal to
Honestly, loyal customers are not only great shoppers who just buy your products on your online shop, they’re also your biggest advocates.
This is why managers and e-commerce business owners should work hard to build loyalty by investing in customer experience improvements, user-friendly support, quality web design, and e-commerce site features (note: you can use free extensions to improve your Woocommerce site).
All these factors affect customer loyalty, but many people pretty much ignore fairness. Fairness is the simple transactional trait that’s affected loyalty for thousands of years.
You can create and highlight fairness in your online store instead of using tricks.
What is fairness?
Definition of fairness: the quality of treating people equally or in a way that is right or reasonable. Cambridge Dictionary
Unfortunately, fairness is a subjective concept. It is difficult to determine which way is right or reasonable because where one person sees fairness, another sees injustice.
Anyway, it is possible to implement fairness in the e-commerce business.
Fairness comes in three key forms: distributive, procedural, and interactional.
Distributive fairness means customers feel their final shopping outcomes are fair compared with their inputs. Usually, these inputs could be the amount of money they spend or the amount of effort they put into purchasing.
How does it work? The most common example is pre-order. This is fair in a distributive sense because the customer who invested the most time gets access to the product first. We know that many marketers from the video game market and book writers use distributive fairness.
Procedural fairness is fairness in decision-making processes and procedures. A raffle for a gift, for example, is procedurally fair because it relies on the fairness of randomization. But a randomized raffle seems unfair in a distributive sense. Two people put the same effort into entering the raffle, but only one gets the gift. In practice, when procedural fairness is quite clear, customers are typically satisfied with outcomes even if they aren’t what they hoped for. In this case, customers should have strong confidence in the fairness of the raffle, otherwise, they will be unsatisfied.
Interactional fairness is fairness in interpersonal situations. It is related to the treatment of customers. It means everyone who interacts with customer service at the online store gets the same treatment regardless of their location, economic status, race, or gender.
On the other hand, we understand that in some cases online shops can’t provide equal services. A customer will pay more for shipping service if he lives so far away.
How fairness leads to customer loyalty
In practice, fairness leads to customer loyalty, especially in online retail. But the path from fairness to loyalty involves several stages. One of the most important stages is trustworthiness.
Many online business owners know that trustworthiness is the most influential factor driving loyalty. The most trusted brands are often the most successful ones. Trust is a vital factor in e-commerce success and fairness is crucial to trust. So, delivering online fairness creates the foundation on which trust can be built.
As we know there are three forms of fairness: distributive, procedural, and interactional.
Distributive fairness has the fewest effect on trustworthiness in e-commerce. People do not need to queue to buy something on an e-commerce site. If a user sees an out-of-stock product, the user can order this product or find another site in a few clicks. In other words, online shoppers do not need to put much effort into purchasing. But you should remember that using out-of-stock products for SEO is a bad idea. It is a bad user experience and visitors will feel frustrated and cheated.
The next form of fairness in terms of the effect of trust is procedural fairness. Customers are more likely to trust a brand that treats them well and has ethical and clear procedures than one that just “sell” products. This is why an e-commerce business owner should clearly define the terms of shipping, guarantee, money refund, discounts, special benefits, etc. Keep your procedures and business processes as simple as possible.
Interactional fairness has a greater influence on trustworthiness in an e-commerce business. This is likely because interactional fairness is the most explicit form of fairness in most online contexts. An e-commerce site should look professional and presentable. It is good to have a physical address, and phone number. Also, customer service representatives shouldn’t be rude and disrespectful. On the other hand, some big e-commerce sites and marketplaces do not always follow these tips, but they are big brands.
The most controversial point is the professional website design. Online business owners and managers should pay more attention to enhancing interactional fairness by creating solid anchors of fairness. From these interactional fairness anchors, trust will be established and it will lead to customer loyalty.
Building customer loyalty is not much difficult if UI/UX designers and digital marketers recognize the role of fairness in e-commerce sites design. These anchors are UI design elements, icons, marketing messages, colors, web design style, and many others.
In fact, it is a challenging task to deliver fairness because business owners or managers often have no clue how customers behave on their sites. Some of these people have unfair advantages over others. People with fast internet can access pages faster than others. For many seniors, people with low-tech skills or disabilities typically take longer to transact and navigate the purchasing process.
If you make many things right, the effect of online fairness will boost loyalty and sales.
Note: A similar effect to the one described above occurs, where unfairness damages trust, which discourages loyalty. Block bots. Don’t use fake customer reviews. Use clear terms of service. Be fair.
Loyal customers are at the heart of any business. They generate revenue. They are your best marketing tool and your advertising. A fairer online shopping experience makes an online store more ethical and boosts loyalty. Anyway, people deserve a fairer online shopping experience.
When was the last time your company considered its approach to online fairness? Do it now. Make the audit of fairness of your site. Choose the fairness that suits your business.