The postponement of “Freedom Day” and the continuation of lockdown restrictions beyond the 21st June has dealt a fresh blow to retailers.1
Although footfall rose 12.3% between 2-29 May compared with the previous month, it was also down 27.7% compared with the same period in 20192, highlighting the fact that the sector is still in an ongoing phase of recovery.
Retailers should therefore make the most of their loyal customers during this time.
According to Invesp, it costs 5 times more to attract a new customer than it does to retain an existing one.
So as retailers work towards a new “Freedom Day”, how can they make sure they’re maximising customer loyalty in order to grow their businesses?
The power of loyal customers
Retained customers are a huge revenue generator. As lockdown extends, brands can save valuable time and resources by focusing their attention on retaining those customers who are already interested.
According to Harvard Business School, increasing your customer retention rates by 5% can increase profits by 25% to 95%.
Retained customers are also more likely to become brand ambassadors for your business by recommending you to their friends and family.
Invesp found that 90% of people are more likely to trust a recommended brand, and word of mouth impressions results in five times more sales than paid media impressions.
Interestingly, 86% of consumers say that authenticity is a key factor when deciding what brands they like and support.3
Tags and comments on social media, online reviews and referrals from loyal customers can all help to build your brand’s reputation and image.
Customer lifetime value (CLV) is also healthy for the future growth of your business. CLV is the total value a customer brings to a retailer’s business.4
Monitoring CLV will help you to make smarter decisions to maximise customer retention and loyalty.
Increasing the lifetime value of your customers equates to greater financial growth with respect to profits and a greater likelihood of long-term business success5 which will help retailers in the challenging run up to “Freedom Day”.
Maximising customer loyalty
Personalisation is a great way to drive customer loyalty as it helps people to feel loved and appreciated by your brand.
81% of customers want brands to get to know them and understand when to engage with them.6
Exploring your engagement and behavioural data, for example, will give you a comprehensive, up to date and 360 degree view of your customer. Engagement data specifically covers anything and everything your customer does when interacting with you.
You can use these informative data points to better understand your customer and how they like to engage with you.
For example:
- What is your customer’s preferred communication channel?
- What products are they browsing?
- What was the product they last purchased?
Use these data points to make sure you are sending your customers the right messages, through the right channels, at the right time. This level of personalisation will make them feel loved, in turn keeping them loyal.
Interestingly, millennials in particular are receptive toward personalisation.
According to Netcore, 70% are willing to let retailers track their browsing and shopping behaviours if it will lead to a better shopping experience.
Braze found that 97% of shoppers who tried a new brand during lockdown said they intended to purchase from them again. Make sure you’re paying attention to these people to drive their loyalty.
Giving customers more of what they want will also help you to drive loyalty. Today, consumers have sky-high expectations around targeted, relevant interactions with brands.
91% of customers are more likely to shop with brands that provide relevant offers and recommendations.7
Prove you know your customers inside out by giving them timely, relevant product recommendations, address them by their first name and send them discounts and rewards for their birthdays and other special occasions.
This will make them feel appreciated and help create an emotional connection between your customers and brand, keeping them loyal beyond “Freedom Day”.
Predicting loyal customers
Now that you have all your data and you are using it to offer personalisation, AI and automation can help you go one step further and understand individual customer behaviours and predict how they will act in the future.
Take VIPs as an example. Using a predictive model you can start to pinpoint who your next VIPs might be.
The predictive model picks up attributes or similar behaviours of those who are now VIPs and predicts those likely to become a VIP.
This means you can segment and nurture these customers into becoming VIPs quicker and easier.
Treat your VIPs differently from those who are simply repeat customers through establishing VIP programs to increase their customer satisfaction.
Make sure you spoil them and make them feel special will be the name of the game, so they keep on coming back for more.
Give your VIP customers early access to new product launches, unique deals and discounts, as 56.8% of consumers are more likely to participate in programs that offer exclusive rewards.8
These customers are the ones who are most likely to create awareness of your brand through recommendations and referrals, so keep them happy!
Whilst the postponement of restrictions easing is disheartening for the sector, retailers can still achieve business growth through focusing their attention on their loyal customers.
Retaining and keeping them will be the key to success. Harness your data to create personalised experiences and spoil your VIPs with reward programmes and exclusive offers.
This will ensure customer loyalty beyond the scheduled “Freedom Day”.
Sources
1. Drapers: ‘Freedom day’ delay deals blow to retail recovery
2. (BRC-Sensormatic index)
3. Stackla: The Consumer Content Report: Influence in the Digital Age
4. Criteo: The state of Customer Lifetime Value report
5. Business Broadway: Customer Loyalty and Customer Lifetime Value
6, 7. Netcore: 25 Personalization Statistics That Every Marketer Needs to Know!
8. AdNabu: USE SHOPIFY ANALYTICS TO IDENTIFY AND ENGAGE VIP CUSTOMERS
