According to the Chartered Institute of Marketing, acquiring a new customer is between six and 10 times more expensive than retaining an existing one. The figures couldn’t be clearer; brands, particularly in the retail sector, which tailor a truly great experience and retain that customer will see better revenues, compared to those who don’t. With digital technologies sparking the explosion of multi-channel customer touchpoints, the sector has now got more ways to impress and deliver great service to prospects, than ever before.

Whilst this growth in consumer channels certainly means there are a greater number of ways to deliver a positive experience, there is also a higher risk of failing to secure the loyalty of that customer if the brands doesn’t get it right for that individual. In an ever-crowded retail marketplace, where consumers now have the option to be engaged wherever, whenever, however and by whoever they want, brands must be taking stock of their marketing strategies to ensure they have water-tight approaches in place that will resonate with each customer. So, how can brands successfully create meaningful relationships with customers, with the ultimate aim of encouraging loyalty along the customer journey?

Britain’s retail industry, along with the US, is leading the way in terms finding innovative ways to encourage return custom, as highlighted in Forbes’ recently published list of innovative companies, which is largely dominated by retailers. British retail has a number of great examples that illustrate the commercial benefits of how schemes to incentivise and engender loyalty can have an impact on a company’s bottom line. Take for example the Tesco Clubcard, which had 15 million members within the UK at its peak. This showed a brand making the most of increased channels to interact with a customer, but also how collecting the data around the individual’s shopping behaviour should be used to help maintain the relationship in the future. From these data insights, the brand has been was able to build relevant promotions into communications with the customer – delivering specific offers to them, based on purchase behaviour.

It was not a coincidence that Tesco was the largest retailer in the UK when it had the most customer-orientated loyalty scheme in the UK. More retailers have been quick to jump on the proverbial bandwagon, with Morrisons announcing a new data-driven loyalty scheme earlier this year to rival the likes of Sainsbury’s Nectar Card and Tesco’s Clubcard. As Philip Clark said in an interview earlier this year, rival Clubcard loyalty schemes helped the supermarket “work a bit harder” than its rivals by being “absolutely targeted to consumers”, which is great news for customers, who are looking for the targeted and relevant offers.

Loyalty card schemes are, however, not the only way to create meaningful relationships with customers. Offering a truly great customer experience based on a detailed understanding of the needs and wants for your each one of your customers should remain at heart, and will help drive loyalty. Of course though, good experiences can’t be delivered without a rich bank of data, which will dictate how to engage and incentivise.

A significant amount of the positive experience is built around customer service. Whilst this has always been important within the retail sector, the increasingly competitive market has elevated it further. With price offering little differentiation between two similar brands today, providing exceptional customer service is really the key way for brands to set themselves apart and give customers a reason to remain loyal to them. Recent research has shown that the brands enjoying commercial success are using data effectively to shape the service being delivered, and empower the range of customer service channels now available as a result of digitalisation, to really delight the individual. Data offers the opportunity to provide a service, which, if done well, will make the customer feel valued by that brand and encourage them to continue to interact.

Making the most of promotional marketing opportunities that are now possible in the multi-channel environment will be a key driver behind greater loyalty. Brands must ensure on and offline activity is joined up and structured correctly to allow a single customer view. Do this, and use the information available to inform future promotions, and you will encourage further interaction. For example, if a customer collects tokens from an on-pack promotion from in-store purchases and sends off for a free gift, brands must have a streamlined process in place to extract and hold the data on the individual, including tracking details of when the gift was dispatched. Implementing systems that enable all this information to be held in one place and easily assessed at a later date will help eliminate miss-targeting for promotions in the future and enable the brand to manage customer service efficiently. So, if the customer doesn’t received their free gift and contacts the call centre, the adviser is able to see the up-to-date information on the customer and can solve the query regarding the missing gift quickly. As a brand guardian, it’s important for the adviser to deliver the seamless experience that would be provided in-store, online or via social media channels. They need to be able to show that customer that they recognise and understand them, if the experience is going to be a positive one. Once again, it comes down to ensuring a high level of customer service is being delivered, and brands being aware of all the channels and opportunities now available to them to undertake this successfully.

Whilst promo marketing is key to encouraging loyalty, there are interesting challenges for the retail sector to be wary of. Forecasting response rates for promotions can be a difficult undertaking and resourcing these promotions is therefore subject to change at short notice. If a customer experiences a long wait to receive a reply or particular item, or is kept uninformed during this process, it will likely mean that the incentive aimed at increasing loyalty will have the reverse effect and led to a poor impression being created which creates damage to the customer-brand relationship.

Invest in your customers through marketing approaches and your customer service offering that drive value, and you invest in your businesses’ future. Due to the level of innovation within the retail sector, there are many ways that businesses can drive loyalty and reap the benefits that this has to offer, and each one has its merits based on the level of engagement retailers want to have with their customers. But, without the correct infrastructure in place to handle the increased level of customer interaction and the data this creates, customers will fail to set alight the imagination of their customers and likely form a demotivator, rather than establish a meaningful relationship.

Joanne Varey Jo Varey, managing director at Granby Marketing Services (http://www.granbymarketing.com/)
Joanne is managing director of marketing services firm, Granby. With over 18 years’ experience in marketing services, Joanne’s been responsible for organising some of the UK’s largest promotional fulfilment campaigns.

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