While the understanding of user loyalty and makes users stick with online products is still nascent, the offline world has completely figured this out. Just look at the various rewards programs, marketing tie-ups between companies, cashbacks, wide-spread branding etc.I've always wondered why it is that these kinds of programs haven't translated well to the online world. And worse, why there isn't a lot of new innovation in the online world with respect to user loyalty? After all, the tech startup scene is renowned for innovation, yet online users have a notorious reputation for switching websites and apps without a second thought. Why is that, and what can be done to fix it?
My wife and I had gone to a very fancy french restaurant a few years ago to celebrate an anniversary. The maître d' was very nice, congratulated us on our anniversary, took us to our table, and handed us both a copy of the menu. The interesting thing was that the menu that my wife got and the one I got were different, especially in one crucial aspect - Mine had the prices of everything listed, while the one my wife had no prices!
What a brilliant way to over-charge a guy! The lady can order the most expensive wine without knowing, and the guy can't complain because hey, you don't want to be cheap on your anniversary!
That experience got me very interested in how restaurants offer their prices, and I started doing some research. It is a fascinating area and my research uncovered the fascinating field of "menu engineering services". These are consultants that restaurants use that can deliver super-customized menus guaranteed to make both your customers happy and your profits go up!
While many offline industries have reached this level of maturity in offering customization, online businesses still have a long way to go. For example, an online e-commerce store is the ultimate platform for 100% customization. You can literally change the whole store for the user, and yet most websites display the exact same page to both men and women. That seems like a wasted opportunity. The way men shop at a clothing store (online or offline) is vastly different from how women do it. How teenagers shop for video-games online is vastly different from how their parents shop for it. How a first-time user shops is very different from how a returning customer shops.
There has to be an easy way to do this customization: For first time users, you show the simplest possible site, so they can navigate the site easily, avoiding all clutter. Highlight the "Cash on delivery" and "30 day replacement guarantee". For returning users, offer more advanced features - wishlists, personalized recommendations etc, while de-emphasizing the features the user is already familiar with (replacement guarantee, CoD etc). If you know a user is price-sensitive based on shopping history, highlight the discounts. If you know if user likes to window shop, offer bigger images, with easy navigation. If the user uses the search box, she likely knows exactly what she wants to buy, so ease out the checkout process.
Make no mistake, a site that does this level of customization will be the ultimate winner. It will create enormous user loyalty, and the highly targeted nature will reduce the friction to what the user wants to do, improving conversions. I feel like customization is especially important in the Indian context, given that the profile of incoming users is very diverse and what exactly works and doesn't work is not well understood. But entrepreneurs should see this as a big opportunity for innovation!