Give More Attention to Customers Who Matter Most – the Loyal Ones
By Andrij Geletkanycz / July 2016Insights
Much of our advertising dollars are pumped into building awareness, trying to pique customer interest with a great deal of effort to get them in the door. They may pick up a few extra items, and hopefully convert to a repeat customer. Then again, they may not. Successful retailers realize the importance of marketing to the customers who matter most: your loyal customers, the customers who will surely come back.
Early losses, rising profits
It’s a fact that loyal customers bring more money into your store, not new customers. When you consider the entire life cycle of a customer, research shows that the newest customers bring you the least profits (if any at all), and loyal customers are more profitable because they spend more money. Boost customer retention by 5 percent, and profits can increase from 25 percent to 95 percent, research says.
The importance of connection
What makes the vision of the old mom and pop grocery store such an appealing relic from another time? To most, it is the personal relationships. Owners knew their customers by name, had an excellent handle on inventory and the specific wants and needs of each customer. Knowledge of consumer demand on this personalized level results in an effective connection with a happy, loyal customer and can lead to some powerful target marketing.
Personalization is the key
One specialty grocer is about to wrap up the testing phase of its new rewards program through a mobile app, and is preparing to roll it out to the rest of its U.S. market later this year. With its mobile app, customers can download digital coupons and accumulate points for freebies and discounts based on their past purchases. One analyst predicts this model will work well for this high-end grocer because shoppers are already invested in the brand. The grocer has successfully cultivated deep customer connections via classes, tastings and high-quality online content. By offering individualized coupons and discounts that correspond with what brought these customers through the doors in the first place, the grocer has given customers another compelling reason to stay.
Is your loyalty program up to date?
You might have a loyalty program at your store, but is it relevant to the customer? The next generation of loyalty programs must stretch beyond access to sale prices with the scan of a card; successful programs now need be personalized. Coupons for Customer A should look very different from coupons for Customer B. Think back to that earlier example of the mom and pop grocer. Technology and input from your customers can come together to make specific recommendations on new products that fit your customers’ individual interests and buying habits. You can further strengthen the bond by offering freebies or deep discounts on items they purchase most.
You understand that customer loyalty can pay off big. But is your loyalty program working at full strength and boosting your customer engagement?
Originally posted by Topco Indirect at: http://www.topcoindirect.com/strategic-sourcing-blog/give-more-attention-to-customers-who-matter-most-the-loyal-ones
Contributed by Andrij Geletkanycz, Sr Category Manager – Marketing for Topco Associates LLC
Andrij has over 8 years experience providing retailers solutions to improve the execution of their marketing, advertising, and merchandising strategies. Previous to Topco, Andrij’s career includes leading efforts within Reebok and Rockport to evolve their merchandising and store standards, while coordinating more efficient communication and execution of promotions for their company owned stores.