Trust Driving Customer Loyalty and Brand Power
Quick Summary In recent years, personalized experiences and targeted marketing have become standard. But now, the spotlight has shifted to a revolutionary concept: personalized trust. Driven by customizable policy management, this approach uses transaction and historical data to create a customized experience for customers.
Today, the online store serves as the brand's flagship presence. For eCommerce companies seeking sustainable growth, it's time to shift focus from individual transactions to the bigger picture: maximizing long-term profitability through Customer Lifetime Value (CLTV).
With the top 5% of customers contributing 35% of an eCommerce store’s revenue, fostering long-term relationships is more critical than ever. A key metric for assessing CLTV is the repeat purchase rate, which signals whether customers are truly committed to the brand.
At Signifyd’s annual FLOW Summit, CEO Raj Ramanand emphasized the importance of CLTV in his keynote address. He highlighted that while the average return rate is around 35%, it differs significantly across industries. For instance, pet supply companies boast a high repeat purchase rate of 52%, reflecting frequent buying patterns, whereas furniture purchases are less frequent, with a repeat rate of only 21%.
To optimize CLTV, Ramanand advises merchants to target a 10% to 15% increase in repeat purchase rates, turning occasional buyers into loyal customers.
To explore this idea further, we collaborated with Ryan Klocke, Senior Director of Customer Success at Signifyd, for an exclusive Commerce Quarterly feature.
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Personalized Trust: What is it?
Personalization is widely celebrated for enhancing user experience, driving marketing effectiveness, and fostering customer loyalty. But its critical role in building trust is often overlooked, despite being a cornerstone of exceptional customer experiences.
Creating a seamless experience that encourages repeat purchases might sound straightforward: give customers what they want without barriers. However, reducing friction without exposing the business to undue risk requires a deeper question: can you trust the customer?
A personalized experience starts with reliable data. Take refunds, for example. Imagine a process where trusted customers receive instant refunds, avoiding the typical 20-day delay. With customizable policy management, this becomes a reality. By automating decisions, businesses can reward trustworthy customers while protecting against returns abuse—striking a perfect balance of effortless for the loyal, secure against the fraudulent.
Reliable Data Powers Personalization
The intersection of trust and personalization is where truly exceptional customer experiences are built. Yet, many merchants struggle to master both. Amazon, on the other hand, has perfected the formula, achieving industry-leading repeat purchase rates through cutting-edge data and technology that drive trust and tailored experiences. Their unmatched data capabilities give them a significant edge.
For other merchants, matching Amazon’s scale may seem out of reach, but tools like the Signifyd Commerce Network provide a viable solution. By leveraging insights from thousands of merchants, Signifyd offers a detailed understanding of customer behavior and return patterns. This empowers businesses to implement tailored return policies and automate seamless processes for valued customers, all while minimizing risks from fraudulent activities.
Trust, Speed, and Confidence
How can merchants decide whether a new customer deserves frictionless, fast order processing or requires a more cautious approach? The answer lies in uncovering the identity and intentions behind every online transaction.
When merchants have the confidence to expedite orders, valued customers benefit from seamless service—building trust and increasing their likelihood of returning. The same logic applies to returns. By leveraging data-driven insights, merchants can issue immediate refunds to trustworthy customers while ensuring returns are validated before refunds are granted to those with questionable histories.
As Signifyd CEO Raj Ramanand explains, “Merchants that aren’t Amazon may need a partner to achieve this combination of trust and personalization.”
Turning Data Into Personalized Experiences
Signifyd’s advanced AI platform empowers merchants to create tailored shopping experiences by analyzing rich digital signals. With 98% of online purchases made by shoppers already recognized in Signifyd’s network, the platform provides unparalleled insight—even for customers who are new to a specific merchant.
Take Stanley 1913 as an example. Leveraging the Signifyd Commerce Network, they can differentiate individual buyers from resellers, prioritizing loyal customers during limited-release promotions. This strategy protects high-value customers, ensuring they aren’t overlooked by resellers hoarding inventory—an essential move for maximizing Customer Lifetime Value (CLTV).
Smarter Returns With Data-Backed Trust
Returns are another area where personalized trust shines. For new customers requesting returns, Signifyd’s network evaluates their shopping history to detect patterns of potential abuse. If abuse is flagged, options such as in-store returns or mail-in refunds upon receipt of undamaged items may be offered. Meanwhile, customers with a positive track record across the network can enjoy perks like instant refunds or store credits—delivering a smoother, more satisfying experience.
The Bottom Line
Customers stay loyal when they trust a brand to consistently provide reliable and exceptional experiences. By leveraging data insights, merchants can make smarter decisions, uncover customer preferences, and deliver personalized interactions that resonate. This trust-driven approach not only strengthens customer loyalty but also enhances the brand's integrity and long-term reputation.
To learn more about how Avex partners with Signifyd, get in touch today.
