Evolving E Loyalty Dinner Insights

Recently, GGV Capital and Max Ventures hosted an Evolving E commerce dinner that included 25 e-commerce executives in NYC. The discussion topic was “Loyalty & Engagement post-purchase” and everyone at the dinner runs an internal unit that focuses on the topic. Below are the main takeaways from the dinner. Thanks to everyone who joined us.

1. User Experience drives loyalty. Ease of purchase, prompt customer service, easy re-ordering, an ongoing communication strategy that’s informative and not annoying are qualities beyond the product or service being purchased that makes someone become a super fan.
2. Establishing an emotional connection during the initial purchase matters. Brands are thinking deeply about creating a positive emotional experience for customers during the initial purchase. It usually takes several purchases for a person to turn into a loyal super fan. Repeat customers are earned when brands go above and beyond at the time of initial purchase.
3. User-Generated Content of loyal customers interacting with the product and brand performs much better than any performance marketing campaign. What makes you want to purchase a product? A video of someone having an amazing experience with a brand they love or a Facebook ad? For example, a video of a dog getting super excited about a package that’s being delivered from a company that sells dog treats or seeing a group of people genuinely bonding at a cookout while enjoying a food brand they all adore. It’s aspirational. If potential users see others having a positive experience with your product, they’re much more likely to buy it. The content has to be genuine, but it’s likely the best performing promotional content.
4. Engaging users at a key moment and making them feel like you genuinely care builds loyalty. How do you feel when someone reaches out to you on your birthday or another specific event and acknowledges it? It makes you feel good…that person took the time to think of you. Brands are trying to do the same thing. Examples are monitoring facebook groups and reaching out directly to the individual when something important surfaces, a Peloton instructor congratulating you on your 100th ride even though there are 10k people in the same class, or going above and beyond when a user has a negative experience to make sure they’re happy. Recognizing and acknowledging key moments for an individual consumer builds long-term loyalty.
5. Long-term Loyalty vs Transactional Loyalty: the best analogy is comparing brand marketing to performance marketing. Quite often companies are incentivized to direct resources towards performance marketing channels because it produces immediate results that are easy to measure. However, executing on brand marketing is a much more valuable investment, but it’s more challenging to justify because it’s hard to measure and the immediate ROI is uncertain. Marketers are starting to think about loyalty the same way. Sure, transactional points programs are easy to measure and create lock-in, but there are additional ways to improve long-term loyalty, which drives much greater enterprise value over time. It’s a combination of several things previously mentioned with the understanding that it might be difficult to measure ROI in the short-term and will require a long-term commitment. But, the long-term payoff of a loyal customer is well worth the investment.

Every organization is thinking deeply about loyalty, which is evidenced by the people who hold “loyalty” titles. We believe long-term loyalty is a combination of creating an amazing end to end user experience, making the person feel special & recognized as an individual, and providing access to something that’s valuable to the user.

About the Cohosts:
GGV Capital is a venture firm based in Silicon Valley, Shanghai, and Beijing that has been partnering with leading technology entrepreneurs for the last 17 years. With $3.8B in capital under management across 8 funds, GGV invests in globally minded entrepreneurs in consumer/ecommerce, frontier tech, and enterprise sectors.

Max Ventures is a seed stage focused VC firm that is based in NYC. The firm has a strong consumer tech focus with investments in rapidly growing commerce companies in New York City, San Francisco, and Los Angeles. The partners have a decade of successfully investing early stage companies across the globe. Max Ventures primarily invests in Digital Commerce, Digital Media, Fintech, and Digital Health.