In June 2019, high street retail sales fell at the fastest rate in ten years. We can attribute it to any number of reasons: declining consumer confidence, economic uncertainty driven by political upheaval, digital disruption from Uber Eats, Deliveroo, and other apps – but in truth, it simply highlighted some long-term concerns about the state of the industry.
We know that customer retention is important; we also know it’s really difficult. Per Adobe, the top 10% of a brand’s customers spend around three times more per order than the average customer, and repeat customers buy nearly 30% more than first-time shoppers. Brands must keep their best and most loyal customers happy. But how can they do that?
Traditionally, it’s been through loyalty and rewards programs. And there’s no problem with these in theory – but many rely on basic, unexciting, and impersonalised strategies. In a time when customers expect tailored service, and when customer data and technology are making it easier than ever to give it to them, brands aren’t doing nearly enough.
So if you’re looking to retain as many customers as possible, how can you differentiate your offering? And what should you definitively avoid?
Make it personal
You can’t give your customers a tailored service if you don’t know who your customers are and what they like. To that end, it’s important to make sure you’re collecting as much data as possible on their identities, their preferences, their behaviours, and their buying patterns.
When you have this information to hand, you’re better placed to provide offers that suit their immediate and longer-term needs. So if you’re running a restaurant, and the data shows that a certain customer regularly buys a certain menu item – let’s say chicken and chips – then you can probably entice them with double points, a 25% discount, or a two-for-one offer, allowing them to bring a friend.
Loyalty cards allow you to collect and analyse this data: developing a comprehensive purchase history that will allow you to optimise offers to meet the particular needs of your customers.
Make the most of technology
Loyalty programmes are everywhere, and they’re often not that interesting. More often than not they’re very low-tech, and the rewards on offer aren’t worth the slog of accumulating and redeeming points.
But millennials are an increasingly dominant demographic, Generation Z is emerging, and neither have the patience for the low-tech, low reward approach. To stand out from the pack, you need a technologically-empowered loyalty programme that suits the busy, on-the-go customer.
That means a mobile app or website that directly links to your loyalty card and allows your customers to easily find the information they need, the points/cash total they’ve accumulated, complete transactions, and more. But beyond that, it means using the digital space to create a consistent experience across all touchpoints. Customers should never feel like the online experience is coming at the expense of the offline – or vice versa.
Reward customers for more than purchases
Another thing to understand about customers is that you can’t just reward them for spending money. That feels, well, transactional, and transactional relationships are disloyal.
What you want to offer is a sense of reward for engagement. So if they interact with your brand, if they share a post on social media, if they refer new customers, if they write a review, make sure they get points for it – or maybe even discounts.
Because often, the difference between choosing you and choosing a competitor won’t be the price point: it’ll be the perception of your brand, and the history of how it’s treated them. Make them happy at every opportunity, not just when they buy.
Make it easy on them (and on yourself)
You know what’s going to put your customers off in the end? It isn’t going to be the lack of baubles or specific prizes – although they obviously help. It’ll be how easily they can attain them. If they have to haul themselves up a metaphorical mountain to get to the prize, it’s never going to feel worth it.
You want them to have options. For small rewards, customers should be able to achieve them within a few purchases, but they should also be able to save up points for larger prizes. If they can’t realistically attain what they want, they’re unlikely to come back.
Ultimately, your rewards program will succeed if you develop it with your customers in mind. You can’t reverse engineer what they want from an assumption about what they want: you need to capture their data, make the most of it, and most importantly, don’t get in your own way or your customers’. Respect their time, and they’ll reward your business.
Written by Jurgen Ketel, Managing Director EMEA, Givex
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/
comments powered by Disqus