Jul 27, 2023
Kelli is the senior content strategist for Order Protection.
For eCommerce brands, it can be easy to get caught up in the awareness, consideration, and conversion stages of the customer journey. After all, aren’t we all here to make sales?
While these stages are certainly important, there’s one area that is consistently overlooked: the post-purchase journey. Contrary to what some may believe, the customer journey doesn’t end at the sale—not even close. The last two stages of the eCommerce customer journey—retention and advocacy—are where industry leaders separate themselves from those who just barely scrape along. Because, #iykyk, and the leaders in the space do know, that the real money is in happy, repeat customers.
In today's competitive eCommerce landscape, simply selling products online is no longer enough to ensure success. As customer expectations continue to rise, brands must find innovative ways to differentiate themselves and provide a superior shopping experience up until and well beyond the sale. An exceptional experience is what will keep customers coming back again and again, advocating for your brand along the way.
One effective strategy is to leverage value-added services that go beyond the basic transactional process. These are the sprinkles on top of the customer experience sundae, if you will. The added benefits that take shopping from a thing you do when you need something to an experience.
As a result, these services can help increase revenue, improve customer loyalty, and boost overall profitability. Let’s take a deep dive into the concept of value-added services and discuss how your brand can effectively implement them to drive growth.
What are value-added services?
Value-added services refer to additional offerings that enhance the overall customer experience and provide added value beyond the core product or service. These services can take various forms, such as personalized recommendations, live chat support, loyalty programs, product protection plans, frictionless returns, special offers, deferred payments, shipping protection, and customer reviews.
By incorporating these services into their operations, eCommerce brands can create a more comprehensive and compelling shopping experience for their customers.
The importance of value-added services
It may seem like stating the obvious, but the more value you can provide customers, the better. With so many options available literally at their fingertips, consumers are looking to spend their money with brands that are willing to go above and beyond just providing a quality product or service. This means you’re not just selling a product—you’re selling an experience.
Value-added services can achieve several things for your brand, including meeting those high customer expectations. But let’s look at a few other ways these services can make a difference for your business.
Meeting customer expectations
As we’ve stated already, in this age of fast delivery and exceptional customer service, eCommerce customers have come to expect more from online retailers. But it’s not just shipping speeds that customers care about—it’s the entire post-purchase and delivery process.
In Shippo’s 2022 “State of Shipping Report,” surveys found that 19% of consumers said they wouldn't make a second purchase with a retailer who lost their package, and 42% say how the merchant responds to, or resolves this issue, determines whether or not they'd be a returning customer. Beyond speed, consumers are more concerned about actually receiving the packages they order. And if something does go wrong during the shipping and delivery process, they expect retailers to resolve those issues quickly and efficiently.
One value-added service that can meet these customer expectations is a shipping protection or shipping insurance offering. Shipping protection can cover brands and customers for issues like lost, stolen, or damaged packages. And providers like Order Protection relieve brands’ customer service teams of responding to and resolving shipping claims, freeing them up to devote time elsewhere. This kind of value-added service not only meets or exceeds customer expectations, but can provide tremendous value to brands as well.
Differentiation from competitors
The eCommerce landscape is becoming increasingly crowded, with new brands entering the market every day. To stand out from the competition, brands must find unique ways to differentiate themselves. Value-added services provide an opportunity to offer something extra to customers that competitors may not be providing.
Offerings like loyalty programs where customers can earn rewards or the ability to do self-service returns might be the difference between a new customer making a purchase with one brand over another. Not only that, but this differentiation can encourage repeat purchases, especially in the case of loyalty or rewards programs.
Increasing customer loyalty
Acquiring new customers can be costly, which is why it's important for eCommerce brands to focus on customer retention. And retention is dependent upon the customer experience. According to Statista, 40% of customers will change brands after just one bad experience. So if providing a great customer experience isn’t part of your brand’s strategy, you can pretty much say goodbye to a good retention rate.
By offering value-added services that enhance the overall customer experience, brands can show customers that they care about more than just making a sale—they care about the customer’s entire experience with their brand. This helps build strong customer relationships and foster loyalty and, in turn, leads to repeat purchases and increased customer lifetime value.
Boosting profit margins
While implementing value-added services may require upfront investment, they can ultimately lead to improved profit margins. For example, offering shipping protection or protection plans can result in a higher average order value without requiring additional inventory or raising costs significantly.
Plus, in addition to increasing the amount of revenue per customer, offering shipping protection through a provider like Order Protection opens the door to new revenue streams via revenue sharing programs, improving overall profitability.
Implementing value-added services
If you’re on board with launching your own value-added services, you’ll want to do some due diligence before diving in. Find out which services will add the most value by digging into what your customers care about most, or by identifying problem areas within your own processes.
To effectively implement value-added services in your business, consider the following strategies.
1. Conduct a comprehensive assessment
Before introducing any value-added services, it's crucial to conduct a comprehensive assessment of your business. This assessment should include an evaluation of your current operations, customer needs and preferences, as well as a review of your competitors' offerings. By understanding your strengths and weaknesses, you can identify the most impactful value-added services to implement.
2. Identify customer pain points
To determine which value-added services will resonate most with your customers, it's important to identify their pain points and areas where they may be experiencing challenges. For example, if customers frequently encounter issues with product returns, implementing a frictionless returns process can provide significant value. By addressing these pain points, you can enhance the customer experience and increase customer satisfaction.
3. Offer personalized recommendations
One effective value-added service is personalized product recommendations. By leveraging customer data and utilizing artificial intelligence algorithms, you can provide tailored recommendations to customers based on their browsing and purchase history. This not only enhances the shopping experience but also increases the likelihood of cross-selling and upselling, leading to higher average order values.
4. Implement live chat support
Live chat support is another valuable value-added service that can greatly improve customer satisfaction. By offering real-time assistance and addressing customer queries and concerns promptly, brands can enhance the overall shopping experience. Live chat support can help customers make informed purchase decisions, resolve issues quickly, and build trust with the brand.
5. Establish a customer loyalty program
Implementing a customer loyalty program is an effective way to incentivize repeat purchases and foster long-term customer relationships. By offering exclusive discounts, rewards, and special offers to loyal customers, brands can encourage customer retention and increase customer lifetime value. Loyalty programs can also create a sense of community and make customers feel valued and appreciated.
6. Provide shipping insurance or protection plans
One of the most valuable (see what we did there?) value-added services that eCommerce brands can offer is protection for customer orders, either through shipping insurance or protection, warranties or protection plans, or both. These services provide customers with peace of mind by protecting their purchases against damage, theft, or malfunction. This additional layer of protection not only enhances the customer experience but also increases customer confidence and trust in the brand.
7. Optimize the returns process
Returns are an inevitable part of online shopping, and how brands handle returns can greatly impact the customer experience. Implementing a frictionless returns process, where customers can easily initiate returns, track the status of their returns, and receive refunds or exchanges promptly, can significantly improve customer satisfaction. By streamlining the returns process, brands can reduce customer frustration and increase the likelihood of repeat purchases.
8. Leverage special offers and deferred payments
Offering special promotions, discounts, and deferred payment options can be powerful value-added services. Special offers, such as limited-time discounts or free shipping, can incentivize customers to make a purchase. Deferred payment options, such as installment plans or buy now, pay later programs, can provide flexibility and convenience to customers, increasing their likelihood of completing a purchase.
9. Encourage customer reviews
Customer reviews play a crucial role in building trust and credibility for eCommerce brands. Encourage customers to leave reviews by offering incentives or rewards for their feedback. Positive reviews can attract new customers and increase conversion rates, while negative reviews provide valuable insights for improvement. By actively seeking and promoting customer reviews, brands can enhance their reputation and establish themselves as trustworthy and reliable.
10. Continuously monitor and improve
Implementing value-added services is not a one-time effort; it requires continuous monitoring and improvement. Collect customer feedback, analyze data, and measure the impact of each value-added service. Use this information to refine and optimize your offerings to ensure they align with customer needs and preferences.
Add value to your customer experience today
Value-added services play a crucial role in driving growth and increasing revenue. By going beyond the basic transactional process and offering additional services that enhance the customer experience, eCommerce brands can differentiate themselves, build customer loyalty, and ultimately boost profitability. Whether it's personalized recommendations, live chat support, loyalty programs, or shipping protection plans, implementing these value-added services can provide a competitive edge and ensure long-term success in the ever-evolving eCommerce industry.
Remember, the key to success lies in understanding your customers' pain points, tailoring the value-added services to their needs, and continuously refining and improving your offerings. By doing so, you can create a seamless and enjoyable shopping experience that keeps customers coming back and drives sustainable eCommerce revenue growth.
To learn more about how to offer shipping protection to your customers, reach out today for a free demo or consultation with our team!