To a lot of retailers a customer retention strategy is commensurate to a loyalty program that offers financial rewards. Like any business, Retail marketers employ these rewards programs because consumers follow a predictable and measurable path to repeat purchases. CEOs and CFOs love predictable and measurable consumer behavior. However, we are seeing indicators that consumers are becoming increasingly dissatisfied by the similarity of these programs among the businesses which use them and their lack of compelling benefits. Here’s the thing. As we become accustomed to a higher level of service, which is a key differentiated for businesses, the client / consumer becomes accustomed to that level very quickly and it takes more to wow us. After all we are fickle and if the difference is just money, we will gladly switch our loyalties to rival companies which offer even bigger rewards.
Now the real secret to building even deeper connections with your customers is to follow the smartest retailers who have shifted their thinking of client loyalty not as a new or separate program but as a corporate strategy. Successful business marketers are insightful and empathetic to the marketplace. They put themselves in their customers’ shoes to fully understand their perspective and then serve those customers with genuine passion. These brands not only create customers, they create raving fans with enough emotional loyalty that they will act as brand advocates, ambassadors and promoters. These raving fans will go out of their way to spend more, pay premium prices from the brand even when other retailers and products are readily available.
Online merchants have the unique opportunity to nurture emotional loyalty by alleviating the pain points of traditional shopping and capitalizing on the strengths of digital e-commerce to deliver exceptional shopping convenience and personalization.
Customer Loyalty is Imperative to Business Survival
As more consumers live online rather than merely get online, there is a shrinking pool of new consumers for the online marketer to target. This obviously makes retaining your existing customers that much more important.
An internal study performed at Google shows that current consumers give little thought to moving from site to site to compare products and prices. They call this the zero moment of truth. As much as 88% of consumers are researching items online and then buying the items at a physical store. That figure is from Accenture, April 2014. The shopping decision cycle has lengthened as there is more information to research. As a result, consumers are more informed and they want a valid reason to remain loyal.
One way to keep me loyal is to have a great website that delivers what I want on the device I happen to be using at any given time. Google recently announced the heightened support and weight of “Responsive” Web Design or Mobile Friendly websites. This is in response to the trends that Google sees from the online community and their device usage. I see many marketers are still adjusting to this reality as well. Sadly, the blogs were all on fire about mobilegeddon rather than talking about how to use it to retain customers.
It really ticks me off actually. When I see a new promotion and it’s only for new customers and the only way to get any perks for my loyalty is when I complain and am ready to leave to another competitor. Now I am eligible for a great discount. Has that happened to you? When will businesses truly understand that loyalty programs that rely solely on price promotions do not drive true loyalty?
A study performed by the Center for Retail Management at Northwestern University illustrates the buying power of loyal customers. In the study, it states that 12% to 15% of consumers were loyal to a single retailer. What is fascinating is that those customers generated 55% to 70% of company sales. Does anyone remember the Pereto Principle? The 80/20 Rule?
Rewards vs Loyalty
As can be seen (hopefully) with rewards programs, customers may continue purchasing from you only as long as the reward is available to them to the point of diminishing returns.
As you have read countless articles and seen various whitepapers, you may come to the same understanding that consumers are capable of forming strong emotional bonds with brands, similar to how they feel for friends, relatives or loved ones. I know that I attend an event twice a year at a certain resort in Scottsdale and every time I drive by, I now have a warm heartfelt feeling come over me. It has nothing to do with the resort, however they are the secondary recipient of by loyalty as I will come back and spend money just to soak up the good feelings. I have the same level of loyalty to a couple of stores where I am treated practically like a member of the family rather than just a customer. If you think about it, I am sure you can picture a business you feel the same way about. You may find yourself even promoting that business to your friends enthusiastically.
Earning Authentic Loyalty
An authentic loyal customer is not created through a program delegated to a person in the marketing department. Rather, it needs to be a part of a company’s culture. It must be second nature and flowing like the lifeblood through the business’ operations and procedures.
So what can a retailer do that will generate the kind of energetic loyalty that many only dream of? Let’s take a look at a brand which is successful at this and follow their lead so we can have a better grasp of how they get customers to say No Thanks to competitors. 1st I can think of Apple. They have a culture that clearly nurtures strong loyalty to their brand. Apple made their products with simple designs that impact our lives and better yet, the products are easy to use and they work without a lot of hassle or need for added plug-ins or downloading extra drivers. Bottom line, it’s the product 1st. Start with a great product or service that delivers better than the competition. Next create an inclusive customer experience that creates a sense of belonging to something special that isn’t offered anywhere else.
What does that look like? As customers remain loyal, let’s say on the anniversary date, they can get entered into contests to win rewards. There can be customer chapters organized by geography with specific events just for each group strengthening the community as well as the bond with the brand. This goes beyond the old newsletter that I doubt gets much attention anymore as everyone’s email is overflowing with clutter as it is.
Another thing that will go a long way is to offer the same special discounts not just for new customers but also the loyal customers who have been loyal after a certain period of time.
0 comments:
Post a Comment