“Customer satisfaction is worthless. Customer loyalty is priceless.”
– Jeffrey Gitomer
It has never been easier for new businesses to launch and become competitive in a shorter time than today. Businesses can set up eCommerce platforms, source products, and easily make and accept payments. This has led to more competition across various sectors, especially eCommerce. For instance, in the fiscal year 2022 in India, 14,000 new startups were recognised by the Department for Promotion of Industry and Internal Trade (DPIIT).
As newer businesses launch, it becomes a buyer’s market, where customer loyalty is a challenge; consumers can switch from one brand to the next within seconds. It is no longer just enough to offer superior-quality or competitively-priced products to consumers. Delivering a hassle-free, high-trust, seamless online user experience is just as important.
This blog explores how the integration of a superior, seamless payments solution translates to higher customer loyalty.
Why is customer loyalty important?
Customer loyalty indicates a positive relationship between a customer and a business. Some metrics that can help a business measure this include:
- Repeat purchases
- Customer lifetime value (CLV), which indicates the total revenue generated by a business from a customer
- A customer’s Net Promoter Score, i.e. the likelihood of a customer recommending a business and its products to others
- Customer churn rate, i.e. the rate at which a customer stops purchasing products or services from a business – the lower the churn rate, the higher the customer loyalty.
- Upsell ratio is calculated as the number of customers who have bought multiple products and services divided by the total number of customers. A higher upsell ratio signifies higher customer loyalty, indicating how many customers buy more than one product or service.
Customer loyalty is crucial for business success because the cost of acquiring new customers is high. Businesses must increase ad spending or invest in organic social media content to reach new customers. Moreover, the probability of selling to a loyal, existing customer is about 60-70%, as opposed to 5-20% for new customers.
Further, repeat customers generate higher revenue and provide positive recommendations to friends and family. Hence, businesses can cut customer acquisition costs and drive revenues and profitability.
Businesses offering a poor payment experience may be adding fuel to an already volatile consumer market. Consumers shifting to a competitor is an unfortunate outcome, even if your products and services are competitively priced and bring quality to the table. On the other hand, businesses that proactively ensure a hassle-free payment experience have a greater chance of cementing customer loyalty.
Current challenges with payment solutions
Here’s a snapshot of common and basic challenges faced by consumers during the payment process:
Not an inclusive experience
Several businesses offer limited payment options. For instance, they may accept credit cards and payments only from specific banks. They may not provide credit options or accept UPI payments. These limitations cause customers to abandon their carts and shop from a competitor offering all payment options seamlessly integrated into a single platform.
Poor experience with recurring payments
Consumers of subscription businesses face a challenge due to new Reserve Bank of India (RBI) guidelines. They are unable to leave instructions for the automatic processing of recurring payments. They will likely switch to service providers offering a superior recurring payment option.
Not a seamless user experience
Too many failed payment sessions that keep timing out can drive customers from one website to another. Worst yet, consumers must input personal financial information each time they transact. These trust-reducing factors contribute to a poor payment experience, which can prove extremely frustrating for consumers.
Lack of trust
Human psychology plays a role in a consumer’s purchasing decisions. For instance, if an eCommerce platform’s payment page lacks the look and feel of a professional business, it can dissuade a customer from even attempting to make a payment.
These factors collectively contribute to lowering consumer trust and, in turn, customer loyalty.
Key to an effective payments solution
Early investments in an effective payment solution can help businesses boost customer loyalty. Integrating an inclusive, innovative payment gateway allows businesses to solve many payment issues in one strike.
- Superior payment gateways offer multiple payment modes, giving consumers the power of choice – from credit cards to net banking and UPI.
- Businesses can collect instant payments from a larger funnel of customers and fuel better cash flows.
- Subscription businesses can completely smooth over recurring payment processes through features like UPI autopay. This solution is secure and seamless for consumers while ensuring cash flows for businesses.
- Businesses can also generate unique payment links for customers who prefer to shop within social media platforms or messaging apps. Rather than visiting a business’s website or app, they can directly transact via the payment link.
- Ensuring secure payments is a top priority of a superior payment gateway. Customers who feel that their financial information is secure are more likely to make repeat purchases, boosting customer loyalty metrics.
- To target every customer, businesses must have an inclusive payment opportunity. Using an innovative payment solution, customers can access credit at the point of sale via options such as Equated Monthly Installments (EMIs) and Buy Now, Pay Later. These options nudge customers to make purchases of larger ticket sizes, thus increasing the CLV, a key customer loyalty metric.
A secure, inclusive digital payment experience boosts the likelihood that a customer will return to make more purchases. As customer loyalty increases, businesses can boost their revenues. The best way to power a hassle-free, efficient, secure payment experience is to partner with an innovative payments technology specialist.
Plural Gateway is a comprehensive payment solution that offers multiple payment modes. Our innovative product enables subscription businesses to collect payments via UPI autopay easily. Businesses can also serve unique payment links to customers directly on the channel of their choice.
Additionally, our gateway offers multiple payment options, a Buy Now, Pay Later option, and Brand EMI options. It ensures a hassle-free integration experience and round-the-clock tech support for partner businesses. To learn more about our gateway, or to get started, reach out to us.
Plural by Pine Labs has received an in-principle authorization from the Reserve Bank of India (RBI) to operate as a Payment Aggregator.
Amrita Konaiagari is a Marketing Manager at Plural by Pine Labs and Editor of the Plural blog. She has over 10 years of marketing experience across Media & Tech industries and holds a Master’s degree in Communication and Journalism. She has a passion for home décor and is most definitely a dog person.