3 easy tips for Hong Kong’s small businesses to build overseas customer loyalty in the eCommerce era


It is no secret that a loyal customer is the most valuable type of customer. They are likely to bring repeat business, spend more and try new products. Tough business conditions have put pressure on businesses to cultivate loyalty, which is not surprising given an increase in customer retention by 5% can increase profits by 25% to 95%, according to an earlier study by Bain and Co1.

This begs the question: how can small and medium-sized businesses (SMBs) in Hong Kong with limited resources cultivate customer loyalty with their newfound overseas customers from thousands of miles away? How can they capture growth opportunities brought on by the pandemic, not least with time zone differences, differing consumer preferences and more?  

Businesses often believe that the panacea to loyalty is a loyalty scheme; however this should not be the only consideration. The starting point should be an overall strategy to loyalty that incorporates hygiene factors and elements that build trust with the customer.

Brand loyalty starts with a smooth customer experience

One major hygiene factor is to ensure that there is a smooth customer experience. Not only does this create a reason for customers to return, but it also prevents the consequent negative effects associated with poor experiences. This is particularly important for PayPal as we look to design products which help our business clients across the world ensure a seamless and simplified payment experience for their customers: a key aspect to building and retaining loyalty.

This is even more important when engaging with customers in different time zones since the lengthened service and query response times create friction in the overall experience which add to the chance of a “moment of truth” being missed. Investing in the right eCommerce and payment infrastructure to ensure a smooth customer journey can go a long way. For instance, allowing guest checkout for first-time customers or a quick click to complete checkout for repeat customers will reduce cart abandonment and maximize the chance of securing purchases.  

Consumers trust brands that resonate with them  

Many businesses are familiar with drivers of customer loyalty here in Hong Kong, but these can be very different from the corresponding factors in international markets. A 2019 study conducted by KPMG found that the biggest drivers of brand loyalty for Hong Kong consumers were personalization and meeting expectations.2 Although these are to be expected, a 14-market study by Edelman3 reveals a more complex picture as it found that 43% of consumers will stay loyal if they trust a brand, even when something goes wrong. Nowadays, especially since the pandemic, consumers trust brands with cultural, purpose, and societal aspects that resonate with them.

Communicating what your brand stands for can be a powerful tool in acquiring customers who share your beliefs and are more likely to remain loyal. This will create resonance in existing loyal customers and galvanize them to action, no matter where they are in the world. There have been many examples of successful global brands who have started small but gained a loyal following because of their purpose. This could be a commitment to organic products, donations to charity, or simply bringing your own personality into your products.

Rewards mechanisms incentivize customer purchases and drive loyalt

When it comes to loyalty schemes, an area worthy of discussion and a popular marketing tactic in Hong Kong, is that of customer rewards - yet it is often misapplied. Many businesses treat rewards as a short-term promotional giveaway; however, this mechanism only incentivizes new or existing customers to buy a particular product.

Instead, businesses should design reward mechanisms to encourage new customers to behave like their most profitable fifth-year customers. Potential examples include rewarding customers that participate in early bird events or regularly make purchases from new lines.

Some might think that being successful in building loyalty with overseas customers is expensive and complicated. However, in recent years, there has been an explosion of eCommerce platforms that sellers can use to reach new customers. Many even offer localized marketing to help businesses attract and engage customers without the need to learn a new language.

Technology is lowering the barriers to building a great customer experience and cultivating customer loyalty. Together with the right fundamentals, small businesses that are selling cross-border can punch above their weight and capture new growth no matter where their customers are.

By Tim Fu, Market leader, Hong Kong, South Korea, and Taiwan at PayPal




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