How to Use the Return Process to Improve Customer Loyalty 
December 13, 2022
by Rebecca Fox

The return process can be a great opportunity to improve customer loyalty by delivering a positive customer experience. By making returns easy and convenient for customers, you can keep them coming back while boosting your bottom line.

Customer Expectations in Returns

The explosion of fast-fashion eCommerce with effective return services has increased customer expectations when it comes to online returns.

In recent years, businesses such as Amazon, ASOS, and Zappos have set an exceptionally high standard when it comes to choice, delivery times, and easy returns.

Customers want a quick, easy, and flexible return process. 92% of customers say they’ll buy again if the return process is easy, which is why it’s important to optimize your returns in order to improve customer loyalty and retention.

How to Measure eCommerce Customer Loyalty and Retention

Loyal customers are one of the most valuable assets your eCommerce store can have. The average amount spent per purchase by loyal customers is 67% higher than by new customers.

Keep your customers coming back to your business by focusing on their post-purchase experience. Retaining existing customers is much more cost-effective than looking for new ones.

What is Customer Loyalty?

Customer loyalty is what prompts people to buy over and over again from the same store, even when cheaper or more up-to-date alternatives are available.

Each time customers make a repeat purchase, they are more likely to feel confident that your business will deliver what it promises, leading to increased customer loyalty and increased lifetime value (LTV).

How do you measure customer loyalty? Loyalty is, after all, an emotion, a sense of belonging.

While customer loyalty isn’t directly measurable, tracking your customer retention rate is a good indicator of customer loyalty.

What is Customer Retention Rate?

Customer retention rate is the percentage of customers who continue to do business with your store after a specific timeframe (month, year, etc). Tracking this metric can help you understand what keeps customers loyal to your store, and identify opportunities to improve your customer experience.

To calculate your customer retention rate, subtract the number of new customers you acquired within the timeframe from the total number of customers you have at the end of the timeframe. Divide that number by the number of customers you started the timeframe with, and multiply by 100 to get the percentage.

Keeping track of your customer retention rate is a good place to start when it comes to measuring your customer loyalty and improving it.   

How to Optimize Your Returns to Improve Customer Loyalty

The ideal return experience keeps customers coming back to your store over and over again instead of looking for new stores to buy from. 

According to the Pareto principle, 20% of repeat customers generate up to 80% of your profits. This is why optimizing your returns process is essential for improving customer loyalty and increasing LTV.

Here are some ways you can improve your returns to boost customer loyalty.

Create a Return Policy That’s Easy to Understand

Make sure your store has a clearly-defined return policy so that customers know exactly what to expect before buying from you.

Your eCommerce return policy can have a big impact on customers’ purchasing decisions. 61% of customers check the return policy before buying, and customers are less likely to click ‘buy’ if they aren’t sure they’ll be able to return the items.

In your return policy, define clearly what you will and won’t accept as a return. How long do customers have to return items? Do customers have to pay for return shipping? What kind of return resolutions do you offer (refunds, exchanges, store credit, etc)?

Make sure your return policy is clearly displayed on your website and is easy to understand, with no confusing jargon. An easy-to-understand return policy builds customer loyalty by ensuring customers know what to expect before making a purchase.

Provide Flexible Returns Options

Providing easy and flexible return options will help improve customer loyalty and ensure that customers will buy from you again.

Complicated return methods can be frustrating for customers, so making the returns process as hassle-free as possible is important.

Keep in mind that not everyone has easy access to packing materials or a printer to print out shipping labels, so you may want to send customers pre-printed return labels with their order or partner with a third-party location for non-packaged items to be dropped off.

Different customers will want to return their items in different ways, so give your customers a choice of return methods. Most customers ship back their returned items, while a smaller percentage prefer to drop them off at a physical location, such as a drop-off point or brick-and-mortar store.

Offering flexible return options to your customers will increase customer loyalty and retention by making it easy for them to return items. Customers will be more likely to choose to buy from you regularly if they know they can easily return items if necessary.

Process Returns Quickly

Processing returns quickly will make your customers trust you more, increasing the likelihood that they will buy from you again in the future.

52% of customers say they would spend more if they knew they would receive a refund quickly. This plays out with customers spending an average of 23% more when offered faster refunds.

If the returns process is too long and complicated, customers may give up and keep the unwanted items, and simply not buy from your store again. 

Communicate clearly to your customers that they will receive a refund quickly – efficient handling of returns will improve customer loyalty.

Encourage Exchanges Over Refunds

By enabling customers to exchange their purchased products, you can keep the money they have already spent with your store while providing them with the product they need. This benefits your customers without impacting your profits. 

Incentivize your customers to ask for an exchange. Some ways to incentivize customers to request an exchange instead of a refund include offering coupons, discounts, or free shipping exclusively on exchanges.

Make exchanges easy for your customers to keep them coming back to your store instead of getting a refund and taking their business elsewhere. A hassle-free exchange process can turn a potential customer loss into a lifelong loyal customer.

Automate Your Returns

The most effective thing you can do to improve your returns experience and build eCommerce customer loyalty and retention is to use an automated returns management system like ReturnGO.

Automating your returns speeds up the returns process and enables you to resolve return requests in no time. 

Using a self-service return portal and a powerful setup of automation rules, eligibility conditions, and seamless integrations, you can process returns efficiently, accurately, and securely. 

Having an automated returns process makes it easier for customers to return products, making them more likely to buy again.

Improve Customer Loyalty Through Returns

Use the returns process as an opportunity to improve customer loyalty. Encourage customers to stay loyal to your store by making it easy to return products. 

Make returns easy by providing a flexible, fast, automated returns experience that will make your customers stay loyal to your eCommerce store, make repeat purchases, and recommend your store to family and friends.

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