Growth is the No. 1 priority for retail CEOs. Growth is good; profitable growth is even better. However, profitable growth is becoming harder to achieve, thanks to two powerful forces in e-commerce squeezing profit margins for brands: competitive pricing and rising customer acquisition costs.
To combat shrinking margins, smart companies are moving beyond simply improving conversion rates. They’re using mobile strategies to boost customer loyalty and engagement to increase profits.
Seizing the Mobile Opportunity
Despite the rising cost of customer acquisition, marketers still undervalue digital channels.
In almost every other channel, the percentage of advertising budgets used on a particular channel is generally equal to the percentage of customer time spent on that channel. For example, consumers spend 22 percent of their time on the internet, and advertisers spend 23 percent of their budget on internet advertising. That makes sense.
But here’s a statistic that doesn’t jibe: consumers spend 25 percent of their time looking at mobile content, but advertisers spend just 12 percent of their budgets on mobile ads.
This disparity represents a huge opportunity to reach consumers via mobile — especially while advertising costs are low due to undervalued inventory. Here are three innovative ways to do just that:
1. Push past inboxes. Bypass your customers’ overflowing inboxes with web push notifications. While customers may acquire and abandon a dozen email addresses, they’ll always have a phone in their pocket; it’s their digital identity.
Use web push notifications to connect with them, even when they don’t have their browsers open. Sending relevant offers tailored to individual customers based on their behavior and location not only keeps them engaged, but also generates sales.
Web push notifications have a variety of use cases, including offering updates on shipped items, providing early access to new collections, and sending reminders about abandoned carts or unused coupons in order to drive sales. These messages add real value and grow your customers’ relationships with your brand.
Not many will install and authorize push notifications through your mobile app. The web is all about reach; in our experience, web notifications will have 10 times the reach of native push notifications for most retailers.
2. Create app-like experiences everywhere. New technologies like progressive web apps deliver app-like performance on any device — a smartphone, tablet, laptop or desktop.
It’s widely known that page load time directly affects engagement and conversion rates. Progressive mobile makes older browsers two times to four times faster and even offers an offline mode that works in large-footprint stores, where your customers may not have a signal.
3. Hit your target every time. Nontargeted promotions dilute your brand and erode loyalty. But rewarding a loyal customer with personalized offers? That’s just good business.
To execute at the next level, you’ll want to use predictive analytics to know exactly what minimum offer will close the deal. It takes marketing automation to make this scale — you don’t want to be merchandising swim trunks when it’s raining!
Trust is hard to gain and easy to lose, and delivering real value wins real trust. Nearly 75 percent of shoppers reject irrelevant content. Delivering personalized content across multiple touchpoints shows customers that you understand their shopping journeys, therefore building trust.
Acquiring a new customer costs five times more than keeping an existing customer, and you have a 60 percent to 70 percent chance of selling to an existing customer, while only a 5 percent to 20 percent chance of converting a new one. These statistics make building trust and engagement with your existing customers all the more profitable.
The current disconnect between ad spending on mobile and the time consumers spend on mobile spells extraordinary opportunity for retailers. These strategies can increase your customer engagement, loyalty and lifetime value.
Peter McLachlan is the co-founder and chief product officer at Mobify, a mobile customer engagement platform that helps retailers boost revenue, keep up with changing customer expectations, and protect their competitive edge.