Retailers: here’s how to capture customer loyalty during a cost of living crisis
Rising inflation is a concern for people across the globe. Customers are becoming more vigilant about spending money. Equally, retailers are faced with increased cost prices.
How can brands capture customer loyalty at this turbulent time?
Here’s what retailers can do to build loyal customers during the cost of living crisis:
Start with empathy.
One of the most vital skills for a business to have in this current climate is empathy. Many customers are now being forced to make do with less. You must consider the daily challenges this brings and the emotions that come with it. Take a moment to think about how you can truly be there for your customers during this time. The relationships that you build now will benefit you in the coming years.
Empathy should be the starting point for any marketing campaigns and sales strategies you deliver during this time. Try not to make assumptions about how your customers are feeling, and instead focus on what you can do as a business to make your customers’ experience easier, smoother, and more valuable.
Offer more value.
How do you compete without lowering prices? Rewards. Retail customer loyalty programs can help with both retention and new customer acquisition by enticing customers to purchase from you over your competitor. Give customers an extra reason to choose you by offering rewards such as bonus ‘points’ when they buy a particular product or range. Create your own rules and remember to give rewards that are meaningful and useful.
What would each segment of your customer base truly find value in?
It’s important to reward beyond transactions, too. Some customers may want to spend with you, but don’t have as much disposable income as before. How do you keep these groups engaged with your brand? Reward them for any kind of activity. For example, offer points to customers that write product reviews or share your content on social media. This will help all of your customer feel appreciated.
How do you know what kind of rewards to offer each customer? You need a bank of data…
Collect the right kind of data.
Building relationships with customers takes time. It also takes DATA. Collecting insightful customer information is vital for short and long-term business success. For now, consider what customer data you currently have…
Are you collecting enough data?
Are you collecting data that you can derive insights from?
Are you using data and insights to drive loyalty?
Retail loyalty programs are a quick and easy way to collect customer data. Loyalty software collects information about customers - such as demographics and shopping habits - to build a bank of data.
Use the data you collect today to inform future sales strategies.
Businesses with an insightful customer database will know how, when and what to target their customers with. Loyalty software can also use AI and machine learning to predict customer activity, helping you make smarter decisions. These insights mean that retailers with customer loyalty programs will be best prepared when customers are able to spend more.
Connect with the digital world to improve customer experience.
Digital transformation is happening in every industry at a faster rate than ever before. The retail sector in particular is pioneering some of the most innovative automation technologies. According to Retail Express, “the silver lining of Covid - if one exists at all - is that the decisions that were to underpin the digital transformation journeys of retailers were accelerated by years to a matter of months”. Such digital journeys are allowing brands to create a customer experience like no other.
Technology can create a seamless customer experience by connecting online and offline channels across the buying journey.
Data capture methods such as card linking offer customers a frictionless way to earn rewards. Personalised offers and rewards can be made more enticing and more accurate than ever using detailed analytics updated in real-time.
Create emotional connection.
Relationships are built when brands are able to create emotional connections. One way to establish an emotional connection is through personalisation. According to Accenture, “81% of consumers want brands to get to know them” by understanding their wants and needs.
Firstly, retailers should personalise communications and marketing campaigns. Personalized marketing engages consumers as individuals - “This makes them feel like brands are tuned into their unique preferences, which in turn increases emotional loyalty by establishing a relationship of trust and appreciation”. Personalisation should apply to rewards, too.
Personalisation strategies allow M&S to create emotional connections with shoppers.
M&S does this particularly well with the Sparks loyalty scheme. Their program allows customers to receive rewards for non-transaction-based activities, such as recycling clothes and writing reviews. Spark’s retail loyalty program is highly-personalized, showing customers how “the more you collect, the more [M&S] will get to know you, and the more [M&S] can treat you - to offers, events, and other exclusives you’ll love”. The retailer also donates to their customers' preferred charity every time they shop, “because what matters to you matters to us”.
The cost of living crisis is the wake-up call retailers need to shift their perspective and approach. Brands must find new ways to meet the needs of consumers during this time. If you follow the above advice, you will create a loyal customer base that will stay with you throughout financial turbulence.
1 - Make sure everything you do is underpinned by empathy.
2 - Offer more value to your customers through an intelligent retail rewards program.
3 - Use your loyalty program to collect detailed customer data that will help you design successful campaigns and strategies.
4 - Focus on creating a frictionless customer experience using digital platforms.
5 - Use personalization and event-based rewards to connect with your customers at an emotional level.
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Senior Content Marketing Executive
Helen is our Senior Content Marketing Executive. She shares valuable information about the Future of Loyalty and will keep you up to date on the latest industry insights...