Since Forrester identified a new era of retail it calls “The Age of the Customer”, the customer now holds all the technology cards, where businesses once did. The impact of the internet and rapid rise of consumer technology and its adoption driven by ubiquitous fixed and mobile devices, has ensured the balance of technology power is now firmly with the customer.

Consumers have been able to leverage their high levels of access into a gigantic discount warehouse, so it’s unsurprising that 50% of retailers say that maintaining brand loyalty is the biggest challenge they face, and it’s an issue they clearly intend to resolve.

Focusing on customer loyalty is both astute and strategic. Loyalty means repeat customers, higher customer lifetime value, fewer marketing dollars or pounds spent on expensive acquisition and – disproportionately in a good way – more spent on retention and up-sell/cross-sell initiatives. Customer loyalty is essential to growth and profitability. So how can apparel retailers and brands build deliver on this?

Loyalty means that you have successfully engendered some level of brand affinity and/or brand affection. It helps Increase by some measurable amount the propensity of any given customer to return for additional visits, off- or online, to become a repeat customer, or even to seek you out with the intention of becoming a customer for the first time. In short this translates to your brand being chosen over other brand choices. That doesn’t necessarily guarantee the largest share of consumer wallet, but it does ensure you get the opportunity to sell what you have created before another brand scoops up that discretionary spend.

Now, 94% of businesses believe that personalisation is “critical to current and future success”. But personalisation is a solution, while lack of loyalty is a business challenge. The inevitable conclusion that retailers see personalisation as a vital means of addressing their loyalty challenge. While this may feel intuitively correct, why should this be the case in the age of the customer?

It’s because personalisation provides a means for businesses to connect with, engage with and nurture distracted, technology-empowered customers – that is to say, it is a single strategy that enables businesses to follow the steps that Forrester suggests are vital for businesses to succeed in the Age of the Customer.

Here are some examples:

Connection:

Personalised marketing is, of course, far more than embedding the correct “Dear //name//” at the top of an email. If you know enough about your customers then your days of sending out one edition of a newsletter to 10,000 prospects are over; instead, send 10,000 personalised newsletters, according to what you know about those 10,000 individuals.

In fact, technology raises almost limitless means to connect, on a personalised basis, with your prospects. What are they looking for? How well do you know them?

Engagement:

Your personalised marketing has successfully delivered your shopper to your store, on- or offline. Can you deliver a seamless continuation of that personalised experience? Is the homepage or content curated and relavant for a particular individual? Is the personalised offer automatically applied to the shopping basket? In-store, do in-store beacons or other scanning technologies enable sales associates to provide assistance at a personal level? What form does that personalised engagement now take? Is it precise, individualised, relevant, helpful, informative, educational, entertaining, amusing, useful? Did you ensure that neither this stage nor the connection stage was creepy?

Nurture:

So far, so good. Even if you don’t make a sale this time, you’ve made all the right impressions: even the most hardened prospect will have to notice that you’ve made the effort to get to know them – their attributes, constraints, context, etc. – and tried to communicate how you can meet their consequent needs and wants, on a one-to-one basis.

And this is a closed loop system: from their behaviour on-site or in-store, you have gathered yet more data that can be used to refine (or alter) future personalised experiences, with insight that can be shared across the business.

Whatever happens, your prospect knows that you are trying to be relevant to them. Unless you were somehow way off base (e.g., you’ve collected misleading data, or have perhaps attached undue weight to something irrelevant) you have given your prospect every reason to return to you next time. And, by today’s standards, that’s loyalty – driven by personalisation at all stages of the cycle.

There is another way in which the system is a closed one. Every great customer experience raises the expectations of that customer for every future experience; it is an inexorable raising of the bar. Can we expect personalisation to be the source of every incremental improvement to the customer experience, to meet these rising expectations?

Clearly not: personalisation has limits already hinted at, above. At some point, you may be tempted into an inference too far: lulled into a degree of personalisation (that you may not even get right) that topples over into the realms of being creepy. Perhaps you indicate to a customer that you know something that they are simply not ready to accept you know; or perhaps something they feel you have no right to know.

At that point, the best-case scenario is that loyalty is merely damaged a little – perhaps a bit of hesitation sneaks in, which will soon be forgotten. Worst case: all loyalty that has been painstakingly cultivated may be magnified but acquire a giant “minus” sign in front of it, your customer scared off for who-knows-how-long. That is to say, the link between personalisation and loyalty is strong but it is also able to move both up and down, and to “go negative”.

Avoid this at all costs: ensure your personalisation strategy focuses on delivering value to your customers, uses information that the customer can intellectually rationalise and ‘trace’ from where it comes; and that is sufficient to achieve your positive loyalty goals.

 

By James Gambrell, chief executive of Fits.me.


GDPR Summit Series is a global series of GDPR events which will help marketers to prepare to meet the requirements of the GDPR ahead of May 2018 and beyond. Further information and conference details are available at http://www.gdprsummit.london/


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