One of the most effective ways to develop a profitable retail business is to retain existing customers, getting them to come back to your brand to purchase again and again. The cost to acquire a customer, even if diminished post-COVID-19, is still significantly more expensive than it is to retain an existing one. Therefore, retailers and brands have invested time and resources into technology systems (e.g., card-linking APIs) and engagement platforms (e.g., loyalty programs) to drive customer lifetime value.
In Total Retail's latest research report, Customer Loyalty in a Fragmented Retail Market: How retailers can leverage data to create long-term relationships with their customers, we offered tips to help merchants grow their customer loyalty in a hypercompetitive retail environment, particularly as consumers tighten their purse strings following a global health pandemic. Here's a sampling of the best practices featured in the report:
- Collect customer data. Understanding the motivation of the customer as well as how you can make their life easier is key to brand loyalty and customer retention. Implement technology systems (e.g., CRM, CDP) that allow for the collection, management and utilization of customer data. For example, card-linking technology can provide merchants with real-time insights into a customer’s transaction time and amount, merchant location and ID, and payment method. Technology systems that enable loyalty through the delivery of data are a critical investment area for brands.
- Create a loyalty program that offers both deals and experiences. Consumers will always want to receive the latest and greatest deals and discounts in exchange for signing up for a retailer’s loyalty program. However, they’re looking for more than just that; they want relevant and value-added experiences as well. Find out what types of experiences are relevant to your customers (e.g., events, classes) and introduce them into your brand’s loyalty program.
- Personalize the customer relationship. Use the information you’ve learned about your customer, such as product preference, channel preference, payment preference, etc., to personalize their future interactions with your brand. This level of personalization should extend across all channels. Consumers have come to demand that the brands they do business with know them. Meeting this demand is critical to future retail success.
For more on this topic, including additional tips for winning customer loyalty, download Total Retail's latest research report, Customer Loyalty in a Fragmented Retail Market.