Customer Stickiness and its connection to Customer Loyalty

“I knew you were the one from our first meeting,” whispers the girl, clutching the unboxed make-up supplies at her chest.

Discovering a brand with everything - price, convenience, quality - is rare. This is why customers sometimes stick with a brand for years - because it resembles the feeling of finding the one.

When customers LOVE your brand, they stick by it - no matter what happens and how the context changes. However, there is a step between a one-night stand and finding true love.

In eCommerce, customer stickiness is the step between the first purchase and long-term loyalty.

We’ve compiled the Smart Marketer’s Guide to Customer Stickiness and its role in increasing retention. Read on and discover what Customer Stickiness means, its importance, and how it relates to sustainably growing your business.

What Is Customer Stickiness?

In other words, customer stickiness means your shoppers pick you repeatedly over the competition because they perceive your brand as valuable. Stickiness highlights repeat customers and unveils the reasons behind repeated purchases.

Usually, price, convenience, product quality, and shipping speed drive stickiness and set the foundation for long-term customer loyalty.

The Formula for measuring customer stickiness level is the following:

Let’s say you had 1500 customers in the past 60 days, from which 500 returned for at least one other purchase (the rest being one-time buyers).

In this case, you would divide 500 by 1500 and multiply the result by 100, bringing your average customer stickiness level to 33%.

Disclaimer: don’t confuse customer stickiness with the repeat purchase ratio. The two metrics are related and highly connected but aren’t the same concepts.

This ratio measures the % of your customers who return for another purchase.

It’s a non-abstract metric that you can measure - as opposed to the sickness, which measures the more conceptual behavior of your customers.

The Difference between Customer Stickiness and Loyalty

Before moving further, we must look at the customer stickiness vs. customer loyalty debate. Both terms are related to customer retention and contribute to increased customer lifetime value.

However, there’s a difference between customer stickiness and loyalty - even if it’s more a degree of finesse than a conceptual difference.

As you saw, customer stickiness happens when you constantly deliver on price, convenience, quality, value, or all. However, even if customers keep coming back to you, they don’t have any particular feelings toward your brands.

What you might perceive as loyalty is actually exclusively transactional.

When it comes to customer loyalty, a customer sticks with your brand due to an emotional connection or a special affinity.

Factors like price, convenience, etc., don’t influence customer loyalty since a loyal existing customer isn’t so interested in them.

Look at the difference from the POV of a customer’s motive for returning:

• Customer Stickiness - comes after a rational choice based on valuable transactions and effective customer service. When these factors disappear, the customer no longer returns.

• Customer Loyalty - it’s an emotional choice based on the relationship between you and the customers. As long as the connection is strong, customers remain loyal, even if your processes drop in quality.

Is one more important than the other?

Not necessarily. A sticky customer is a fleeting customer - since there’s no emotional affiliation with your brand whatsoever. As soon as a better option appears, you might see a decrease in stickiness.

For example, let’s say you’re the only retailer delivering cruelty-free cosmetics in the north of Nevada. All shoppers will order from you because they don’t have a choice.

It’s easier to have their order shipped than to drive to a brick-and-mortar store and purchase from your competition. In this case, stickiness is a result of convenience.

However, suppose another retailer introduces the delivery service to Nevada at lower prices. In that case, you might lose some customers because there’s no loyalty involved.

The same can be said about loyalty - it’s not as easy to turn sticky customers into loyal ones if you don’t have any sticky customers, to begin with.

So customer stickiness is a foundation onto which you can lay loyalty programs and roll out engagement experiences that provide meaningful reasons for repeat purchases.

Why Is Customer Stickiness Important?

With so many retention metrics you need to track, you might be tempted to chug away stickiness and direct your attention toward other KPIs.

However, stickiness helps you pinpoint the reason why shoppers repurchase your products. At the same time, an in-depth analysis of customer stickiness highlights the winning strategies for encouraging repeat purchases.

And the benefits don’t stop here. Here are additional arguments for prioritizing customer stickiness (and all it entails):

→ Stickiness influences the Customer Lifetime Value.

At its core, stickiness represents the customers’ habit of returning to your brand when they need restocking on your products. Consequently, with each new purchase, this customer’s lifetime value increases.

With high customer acquisition and Meta losing more and more $ each quarter, stickiness and retention can bring in significant revenue. At the same time, they can increase the value customers bring without eating into your budget.

It goes without saying that when you increase customer stickiness, you automatically increase the lifetime value of your customers and create more robust pillars for your retention strategies.

→ Stickiness leads to customer loyalty.

As mentioned, customer stickiness is the foundation for building your loyalty programs.

If you boost customer stickiness, you have a larger pool of customers that can become loyal customers. In short, it’s a game of numbers.

→ Increased Stickiness means increased value.

The 101 lesson to retain customers is to provide value - no matter what value represents to your shoppers.

Stickiness is the gift that keeps on giving on this front. Suppose you’re working to drive customer stickiness. In that case, you usually improve multiple facets of your offer: more affordable price points, better customer service, higher product quality, etc.

All add up, and you end up providing more value to your shoppers.

→ Increased Stickiness also means increased WoM

Sticky customers are happy with your brand: price, quality, and whatnot. You can actively increase your referrals and recommendations if you play your cards right and combine stickiness tracking with Net Promoter Score (NPS) tracking.

Word-of-mouth advertising is the Holy Grail of marketing since it allows you to reach more people without investing a single dollar in customer acquisition.

Obviously, there’s a catch here - you first need to listen to your customer feedback and act accordingly to get referrals.

→ Stickiness leads to more sales & revenue.

Customer sickness is directly linked with your sales & revenue because of its very nature.

Looking at all benefits listed here, you realize they’re somehow connected to retention, satisfaction, and loyalty. These aren’t vanity metrics anymore, as they can become the livelihood of your business.

When it comes down to basics, it’s simple: repeat purchases mean more sales & revenue coming your way.

It gets better, considering that the investments only lower over time. The more repeat purchases your customers make, the more loyal they become, and the more friends they bring to your brand - the less $ you spend on acquisition.

The trap of Customer Stickiness

Not everything is peaches and cream, as retailers sometimes make the mistake of focusing all retention efforts on the average customer stickiness level.

When this happens, you risk witnessing your customer base falling into something that’s called customer inertia.

Customer inertia occurs when shoppers purchase products simply because it’s something they’ve always done. The purchase isn’t based on desire or neediness but on habit or routine.

Likewise, customers aren’t particularly emotionally invested in your brand. Inertia appears in environments or industries where competition is weak, and shoppers don’t have many options.

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In short, customers buy just because.

The danger with inertia is that your customer base is very vulnerable and can be easily swayed by a rising competitor who’s more aggressive in marketing and more evolved in the customer experience.

Don’t be fooled by inertia - you might genuinely believe your relationships are strong. Still, when the wind changes and competition emerges, you realize how feeble customers are.

Instead, be intentional about customer retention and loyalty.

While stickiness is uncomplicated, loyalty is hard to earn. Remember that people are ultimately selfish creatures (through no fault of their own). Your brand needs to help them fulfill their goals and make noticeable progress in their lives.

So look beyond the transactional and show customers you care and are there for them. Only this way can you dodge the inertia bullet and bridge the gap between stickiness and loyalty.-

How to Increase Customer Stickiness?

Retailers, eCommerce pros, and customer success teams all agree: after they get that initial first purchase, it becomes a challenge for customers to return for repeat purchases.

The numbers highlight a huge problem: 80% of customers are one-time buyers. With CAC rising to the roof, you might face the ridiculous situation of losing $ with every customer you acquire.

Evidently, you’d want to avoid this situation, reduce churn, and focus on customer stickiness.

• Firstly, acknowledge where you’re at.

If stickiness is already essential for you, you should already know where you stand with return purchases.

If not, it’s time you determine the stickiness level for your brand. Use the Stickiness Formula at the begging of this article to see your rate. That rate is your benchmark.

Save this number for later - you will use it as a control number to measure the effectiveness of your efforts to increase customer stickiness.

• Pay attention to the onboarding process.

According to the Customer Value Optimization methodology, Customer Onboarding plays a crucial role in retention and loyalty.

With a varied customer base, you want to create personalized onboarding experiences that help customers make noticeable progress in their lives.

Noticeable progress cuts your work in half, setting customers on the path of getting all the value they can from your product and experiencing the benefits of your product on their skin.

Remember that successful customer journey mapping starts at onboarding.

• Personalize your retargeting & remarketing campaigns.

Take a look at the products your customer bought & at your historical data. Look at the products that generated repeat purchases and the carts of returned customers.

Use this information to create personalized messages about products your customers might need/ want.

You can use email automation to send out personalized offers that trigger after customers buy a particular product.

For example, maybe someone bought a curling iron from your shop. If they did so, it means they care about their hairstyles and appearance. Wait a couple of days, then send a personalized email recommending a hair straightener.

Disclaimer:

1. Be data-driven about it, don’t rely on gut instinct.
2. Use your first-party data to pair products in the best way possible.
3. See what customers with the highest CLV bought and recommend them - to increase your chances of customer stickiness.

Customers engage with you when they relate to your offers and content - your incentive for being as granular as possible with your personalization.

• Stand out.

Chances are, your products aren’t unique, and similar brands sell similar products. What’s your incentive for making customers stick?

At the same time, your products are unique - it’s a paradox, but it’s true. If you strip everything from it, you’ll undoubtedly pinpoint what makes you distinctive in the market.

Highlight what you bring to the table which differs from your competitors. What are you doing better than others similar to you?

You may have competitive prices, you ship faster, or your customer experience department is off the charts.

Find that one thing that encourages customers to stick with you instead of other brands.

After you identify your Unique Selling Proposition, shout it from the rooftops!

Include it in your branding, marketing, and selling campaigns, to ensure everyone knows about it.

Your USP, your uniqueness, is what makes customers want to stay with your brand and pick you from the crowd.

• Remain the best choice for customers.

Easier said than done? Not necessarily.

You already learned that customer stickiness stays the same (and even increases) when your brand remains the rational choice for customers.

Stickiness is more accessible than loyalty.

To put it differently - when it comes to stickiness, as long as there’s no reason to leave, your customers won’t churn.

This reason can be anything from a price increase to poor customer service or low-quality products.

While you may not have such control over your prices or shipping conditions, you can control the customer experience.

Invest in training your teams to deliver excellent experiences and turn customer interactions into effortless and valuable exchanges.

Wrap-up

In a world obsessed with acquisition, you can take advantage of people not looking and increase your market share considerably by looking at what happens after acquisition.

Customer stickiness is connected to reduced churn, lucrative upsell opportunities, and generates positive word-of-mouth. Improving customer stickiness and avoiding customer inertia is your surefire way to create more loyal customers with a high customer lifetime value.

Good luck!

Frequently Asked Questions about Customer Stickiness

How do you improve customer stickiness? When it comes to stickiness, as long as there’s no reason to leave, your customers won’t churn. This reason can be anything from a price increase to poor customer service or low-quality products. Pay attention to all factors, maintain and improve the same level of quality you offered up until now.

When it comes to stickiness, as long as there’s no reason to leave, your customers won’t churn. This reason can be anything from a price increase to poor customer service or low-quality products. Pay attention to all factors, maintain and improve the same level of quality you offered up until now.

How do you measure customer stickiness? The Formula for measuring customer stickiness level is the following: Customer stickiness level = (repeat customers / all customers) x 100.

The Formula for measuring customer stickiness level is the following: Customer stickiness level = (repeat customers / all customers) x 100.

Is stickiness the same as retention? No. Retention refers to the percentage of customers who stay with your brand over a certain period. Stickiness is the number of customers who return and make repeated purchases of the same product.

No. Retention refers to the percentage of customers who stay with your brand over a certain period. Stickiness is the number of customers who return and make repeated purchases of the same product.

What are the benefits of stickiness? Customer Stickiness leads to improved loyalty, better customer lifetime value, increased revenue, and more referrals and word-of-mouth marketing.

Customer Stickiness leads to improved loyalty, better customer lifetime value, increased revenue, and more referrals and word-of-mouth marketing.

How do you build customer stickiness? To build Customer stickiness, you need to look at your products and their transactional values (price, quality, convenience, etc.). Identify which of these factors are important to your customers, then constantly deliver for your customers.

To build Customer stickiness, you need to look at your products and their transactional values (price, quality, convenience, etc.). Identify which of these factors are important to your customers, then constantly deliver for your customers.

How do you keep customers sticky? Pay attention to the product's transactional values (price, quality, convenience, etc.) and maintain the level of quality you offered up until now.

Pay attention to the product's transactional values (price, quality, convenience, etc.) and maintain the level of quality you offered up until now.