Customer Engagement Lessons to Take Into 2023

2023 is poised to bring new challenges to retailers as economic uncertainty comes to a head, and consumers focus on getting the most out of their dollar. Luckily, the past few years have provided ample opportunities for retailers to double down on engagement strategies and learn how to survive challenging times. Let’s dive into three ways retailers can improve customer engagement next year.

Offer Discounts and Rewards Programs

There’s little doubt consumers are going to be focusing on their wallet the next year. Dips in spending are already happening across industries — and the globe. But as recent research has shown, savings and rewards programs can make a powerful impact on purchasing behavior.

In a recent consumer survey from Wildfire, 81 percent of survey respondents agree they're “more likely to purchase from an online store that offers some sort of reward or cashback on purchases.” Additionally, 61 percent of survey respondents state they “always or often look for coupons/coupon codes, discounts, cashback rewards, or other ways to save on their purchase.”

That being said, not all retailers will be able to afford discounts for extended periods. While the occasional sale may create a short-term spike in topline revenue, there are other ways to continue drawing in price-conscious consumers. Affiliate programs can increase the reach of short-term discounts while doubling as a valuable marketing channel that increases brand awareness across a range of external sites and social media channels.

Another option to increase customer engagement is loyalty programs that reward frequent customers with cashback rewards or points they can use for future discounts or exclusive items. However, consider another result from our survey: When asked about the ways they might receive rewards for shopping, 78 percent of consumers indicate they prefer cash back. Of the other options, far fewer (64 percent) prefer points. As retailers are evaluating how to reward loyal customers, they must keep these preferences in mind so that customers stay engaged.

While retailers may not be able to offer cashback rewards directly to their customers, they can participate in popular third-party cashback rewards programs (e.g., Rakuten Rewards) to appeal to rewards-hungry customers. Because these shopping rewards programs are enabled by online affiliate programs, retailers interested in capitalizing on the demand for cashback rewards need to ensure they allow cashback/loyalty publishers to be a part of their affiliate program.

Whatever rewards program a retailer decides on, consumers will be grateful for the help in saving money and will be more loyal as a result.

Diversify Marketing Efforts to Benefit Customers

Over the past couple of years, retailers have become skilled at adapting to different marketing strategies that keep up with changing consumer shopping habits. In 2020, the sudden shutdown of public spaces required retailers to double down on digital marketing. Within a few months, TikTok exploded, creating another opportunity for retailers to harness the power of a new marketing channel.

While 2023 is going to bring challenges, there are still plenty of options that provide value to both businesses and customers alike. By diversifying their marketing investments, retailers can maintain relevance and better weather the potential economic storm.

Referral programs and affiliate marketing are two options that provide a dual benefit: retailers can be more efficient and direct their marketing spend to performance-based channels, and customers can save money, too.

Referral programs rely on existing customers (the “referrer”) to invite new customers (the “referree”) by offering small incentives to either party when the referree makes a purchase.

Affiliate programs, on the other hand, rely on outside websites (aka “publishers”) promoting a business to their audience and earning commissions on any clicks that turn into a sale. Typically, retailers provide discount codes for the affiliates to promote to encourage a purchase. These discounts are a key element for driving customer engagement and purchases from affiliates, because as noted from our survey results, most customers “always/often” look for coupons.

Retailers can leverage this consumer demand for coupons by ensuring their affiliate program reflects their online store’s current discounts, or by issuing affiliate-exclusive codes. And as mentioned, working with cashback and loyalty affiliate publishers offers the additional benefit of inclusion in cashback rewards programs.

It’s a win-win-win for retailers, affiliates and customers.

Lean Into Personalization and Convenience

Companies like Amazon.com and Netflix have created loyal customer bases that expect convenient, fast service tailored to their unique interests. Having been “trained” by Amazon and Netflix, consumers are coming to expect personalized rewards almost anywhere they shop. And they want them to be offered conveniently during the natural shopping flow.

The mere presence of shopping rewards and discounts can affect customer engagement and conversion rates. For example, 79 percent of survey respondents are more likely to complete a purchase when they can earn cashback rewards, and 82 percent are more likely to complete a purchase when they have a coupon/discount code. When retailers offer coupons on their website, offer rewards, or work with affiliates to publicize discounts, today’s price-savvy consumers are far more likely to engage with the business.

While it’s impossible to predict exactly what’s in store for retailers in 2023, there’s no doubt the lessons collected over the past few years will be of value. By leaning into convenience, rewards and personalized offers, retailers may find loyal customers will stick with them, even through difficult times.

Michelle Wood oversees the merchant network side of the Wildfire Systems platform, which helps companies monetize their users with white-label cashback and coupon services.