Creating Competitive Advantages for Your Dropshipping Business

3. Gift Cards

The global gift card market is expected to reach $750 billion by 2026. If you’re an online retailer and you don’t offer gift cards, you’re missing the boat. 

Gift cards are more than just another product. They can be powerful customer acquisition and retention tools. 

Imagine a customer who hasn’t purchased from your store in months. It’s time to reach out and try to win him back. An email featuring a discount might work, but sometimes discounts can make your brand and your products come across as cheap. Instead, picture an email showing up in his inbox with a gift card for $10 to your store. Is it the same as a $10 discount? Yes. Does it feel the same? NO! A $10 gift card is free money! 

4. Personalization

If your customer is just another faceless customer to you, then you will be just another faceless business to him. If, on the other hand, your customer is recognized and treated like an individual, your business won’t be just another website to price check. It will be top of his mind, one of the first places he thinks to go. 

How do you establish that personal relationship? First, use personalized communications. This may sound obvious, but don’t underestimate the power of starting your email “Hi, Dave” instead of just “Hi.” An Experian research study found that personalized emails generate 6x more transactions and revenue than non-personalized emails.

Second, implement personalized recommendations. Think Amazon or Netflix. They know what you like. They want to give you what you like. They invest significant time and energy in their recommendation engines, so you can sign on and have a whole list of “must-have”s and “must-watch”s waiting for you.  

Also not to be underestimated are the negative repercussions if you ignore personalization. According to Salesforce’s State of Marketing Report, 52% of customers are actually likely to go elsewhere if you don’t personalize.

5. Customer Service

Also seems obvious, no? Of course, you need customer service!

Ah, but we’re talking about a different level of customer service. With drop shipping, even though you selected and marketed the product, you didn’t design it, or manufacture it, or have any personal impact whatsoever on the product. So whereas a traditional company might feel an internal drive to “stand behind our work,” you don’t naturally feel that impetus. 

From the warranty of New York Sash

After all, it’s not your work!

Stop right there. It is your work. 

That’s how you need to feel. That’s how you need to act. If a customer is (justifiably) unhappy, you will go all out to make it up to them. Because, after all, you stand behind your work!

When you have that kind of commitment to your products’ quality, and to your customers’ satisfaction, that is when you will retain customers.

Stop, Dropship and Roll!

If you want customers to stop at your store, stay for a while, and keep coming back, you need to invest time and energy into developing these five retention must-haves. It may be a little frustrating to stop and do this foundational work when you’d like to run full speed ahead with marketing and sales, but it will pay off in Lifetime Customer Value and a host of other bottom line metrics.

You’ve spent your time creating a powerful site design that will resonate with your audience. You’ve established a loyalty program. You’ve put gift cards on your store. You relate to your customers like the individuals they are. You and your staff are committing to supporting your products as if you had poured every last drop of your own sweat into them.  

Now it’s time to roll!

Let’s face it. There are no natural competitive advantages for a dropshipping business. Other merchants the world over sell the same products you do. Many of them sell for similar or even lower prices than you.

What’s going to set you apart in the eyes of your customers? What’s going to get them to keep coming back to your store instead of shopping around? 

For a dropshipping business, it’s all about the competitive advantages you create.

Here are five ways you can make your drop shipping business stand out in the eyes of your customers, and get them coming back again, and again, and again.

1. Customer Loyalty Program

It’s not about the money.

Maybe for you, it is, but not for your customer. The top priority of most shoppers is to buy from a company that they feel a connection to. 

How do you create that connection? Establish a customer loyalty and rewards program. Give your customers a reason to appreciate you and develop a warm, fuzzy feeling about your brand - and give them rewards that they need to come back in order to use. 

Store credit is a great reward type for getting customers to come back. Let’s say a customer spends $100 and gets $15 of store credit as a reward. There’s nothing to do with that $15 store credit apart from coming back to your store and browsing around for what she can buy with it. Oftentimes the $15 isn’t enough for the item that she’s set her eye on, so she ends up adding more money of her own. 

Bingo! Return customer! Another purchase! More revenue, and an opportunity to grant more rewards.

It’s a virtuous cycle, and in the end, you and your customers have become inextricably intertwined. This is a good thing - for you. In Shopify’s recent State of Commerce Report, 73% of North Americans said that once they find a product or brand they like, they remain loyal to that brand.

2. Spot-on Branding

Imagine the experience of walking into Home Depot. Now imagine the experience of walking into Victoria’s Secret. Where would you rather shop?

If you thought there was a “right answer” to that question, there wasn’t.

True, the atmospheres are very, very, very different. (To get an idea of how incongruous they are, imagine going to Victoria’s Depot and looking for perfumes and lingerie items on industrial metal shelves bolted down to concrete flooring.) But the different atmospheres will resonate with different people, or even with the same person at two different times. 

Your job is to match your store design to your customer’s mindset so that they have a comfortable, enjoyable shopping experience. This is actually easier - and usually much cheaper - to do for an online store than for a physical store. Give your sports apparel site the feel of a stadium rocking to the chants of the fans. Give your store for children’s toys a cheery, playful look. Look at the difference between these two brands and the energy and feelings they conjure - they’re intrinsically different, but both spot-on for their target audiences.

Grant your site, your store and your loyalty program a personality - one that will resonate with your customers.