Figures from John Lewis indicate that last year online sales grew by 11.8 percent year-on-year in the Christmas period – the six weeks leading up to the end of December.
UK Christmas spending was predicted to hit record £77.56bn in 2016. Seasonal spending has a huge impact on profits, but could greater value be extracted from Christmas shoppers?
Many retailers experience peak sales during quite small windows of time within the pre-Christmas period. Games console Nintendo Wii sees a peak for controllers between November 28 and December 1 according to Summit Data.
School bags, sewing machines, baking equipment, and coffee machines peak then too while shoulder bags, Disney games, and bunk beds peak between November 16 and 20. Increasingly, the Black Friday sales event in November plays a major part in Xmas run-up sales totals.
Businesses can do much more to encourage these customers to become sources of revenue throughout the year and even transform one-off seasonal shoppers into proactive brand advocates. It is key to approach the initial customer sale as just the start in a customer life-cycle relationship.
Continuous relevant communication with individual consumers in January and throughout the rest of the next year must build on that and create deeper customer engagement. This must go much further than the usual email offering a discount off the next purchase.
Customer service managers can learn from marketers when it comes to using all the available customer data – from demographic data through to purchasing habits – to communicate more effectively with seasonal shoppers. Armed with this data it is easier to offer them targeted incentives to initially become repeat customers and online followers that ultimately progress to become proactive advocates for your brand, willing to post positive reviews, refer a friend, and support your brand on social media.
There are a number of steps businesses can take to reward and recognise customer loyalty and drive sales beyond Christmas:
1. Formalise a lifecycle approach to the customer experience
A one-off seasonal shopper should appear in the CRM system as a customer at the beginning of a life-cycle. Then look to improve the lifetime value of customers by using incremental loyalty rewards.
Low, medium, and high levels of rewards can incentivise customers as appropriate. A lower value reward might entice a one-off customer to become a repeat purchaser, whereas a high-value reward might convert a regular customer into a brand advocate.
Offering customers a choice of loyalty rewards is vital to building revenue streams through post-Christmas new customer ‘on-boarding’ campaigns and, crucially, this reward should not be directly related to your products and services.
Customers have almost come to expect ‘20 percent off’ offers, but they are likely to be surprised and pleased by a £10 e-code that may be spent with a variety of retailers or service providers.
2. Work with colleagues on connecting the dots between customer services and marketing
Marketers have spent time segmenting customer communications very effectively and are knowledgeable about tracking customers through the buying process and communicating with them at the optimum time.
Customer service managers can tap into that internal knowledge base, profiling individual customers or personas and aligning suitable rewards to encourage repeat spending patterns.
3. Design the customer experience, online and in-store, with seamless data collection in mind
Detailed data on each individual customer, ranging from demographic data such as gender, age, and location through to browsing and purchasing history, is foundational to effective personalisation in future.
Many organisations are reviewing their data collection procedures in the light of the upcoming GDPR regulations and this is a good opportunity to make sure data collection activities not only comply with the regulations but also add maximum value to the business.
4. Personalise customer service communications
Communications should reflect the interests of the person receiving that communication as far as possible. Personalisation does not simply apply to the content of the communication – it also applies to the method of communication. It may work best to communicate with certain demographic groups of customers in one way, by email or SMS, while others will respond best to social media-based communications.
5. Empower customer service employees to provide a timely response to complaints
If for any reason the customer’s single experience with you does not go well, this presents an opportunity. When complaining customers are converted to satisfied from dissatisfied, their loyalty increases by at least 25 percent and possibly as much as 60 percent, writes John Goodman in his book Strategic Customer Service.
In addition, if you authorise customer services representatives to issue small on-the-spot incentives, such as £10 shopping gift cards, the impact on customer satisfaction is immediate.
The return on investment from this small incentive can be considerable – not only do you retain that customer, but they may well convert into a valuable brand advocate. This positive impact on customer sentiment tends to apply whether or not the customer actually goes on to redeem the gift card. The good experience and the emotional engagement with the brand are equally important.
If organisations integrate customer reward experience across all the various customer touchpoints and focus on the user experience, just as they would on an effective e-commerce journey, then they will see seasonal shoppers become lifetime brand advocates.