Retail TouchPoints: How to Fight Churn & Keep Your Customers Forever
Starbucks. Sephora. Chick-fil-A. REI. Tarte Cosmetics. Nike. It’s no surprise that the brands consumers love to love have robust—and rewarding—loyalty programs. Truly great loyalty programs attract new customers, engage existing customers, and motivate both to spend more and buy more often—increasing retention and lifetime value.
But more than ever, consumer loyalty is up for grabs, and churn has risen dramatically in the last two years, as customers’ old habits were altered by COVID shutdowns and supply-chain issues. According to PWC, half of consumers (50%) tried new brands during the pandemic. And nearly 65% of those who switched brands plan to stay loyal to their new choice.
A new Retail TouchPoints ebook, “Loyalty, Redefined: 5 Key Actions for Refining and Optimizing Customer Acquisition and Retention,” sponsored by Treasure Data, explores the trends shaping customer loyalty today and what retailers can do to refresh their loyalty programs and recapture the hearts of consumers.
I’ve highlighted a few key trends and actions below. For more, download a copy of the ebook.
Trends Shaping Customer Loyalty Today
Consumers interact with brands all the time through digital content as well as phygital experiences, including in-store, ecommerce sites and apps. Customers today experience brands and make purchases without even having to go to a company’s site. Therefore, it’s critical for a company’s branding and voice to be ubiquitous across all media—and a solid loyalty program can tie everything together.
The Rise of Direct-to-consumer (DTC) Startups
Does it feel like consumers have more choices than ever? The rise of DTC startups has a lot to do with this, and so does the movement of CPG firms to develop direct channels. Digitally native companies like Brookline, Bombas and Allbirds have flooded the market, and established leaders like Nike, Under Armour and Adidas have created their own DTC channels. The result? Competition for consumers’ attention keeps rising. A loyalty program can help keep customers’ eyes on you.
Shifting Customer Expectations
Consumers have little tolerance for even the smallest amount of friction these days. They expect all interactions with every brand to be seamless, personalized and fast. We could blame the likes of Amazon, Walmart, Netflix and Uber, but it doesn’t matter who’s causing consumer expectations to rise. Once a new level of convenience has been introduced, consumers expect every brand to meet the new standard. The right loyalty rewards can make customers feel like VIPs.
Actions To Optimize Your Loyalty Program
How do you make each customer feel special? Retail TouchPoints recommends taking the following steps to improve customer loyalty.
Incorporate Experiences Into Your Loyalty Program
Today’s shoppers want more than points from a loyalty program—they want personalized experiences. Even during the age of covid, brands can create experiences through online interaction and social activity, allowing loyal fans to earn benefits through their engagement.
Unify Customer Data for a Single Customer View
For each shopper, you probably have multiple pieces of identification data—a mobile number, a landline, an email address, a social media handle (maybe more than one). How can you accurately unify all of this information into a single customer view?
Many famous brands (AB InBev, Subaru, Shiseido, and more) are using a Customer Data Platform (CDP) to easily integrate, merge and eliminate duplicate data from many different sources, minimizing the need for data cleaning and preparation. For example, a good CDP can take web-browsing histories, mobile app data, loyalty information, purchases, and social media data, and integrate all of that data to create a single customer view. In addition, CDPs can supplement these rich profiles with ML insights, including propensity scores to take specific actions and affinity scores for content, products and channels.
The best CDPs have the most flexible, easy integration capabilities, such as a schemaless architecture. Many CDPs have a fixed database schema, which can make importing data from multiple sources difficult. With a schemaless architecture, there’s no need to reformat files, build new schema or enlist vendor support, all of which helps marketers save time and resources.
Design Unique Journeys and Deliver Personalized Experiences
Finally, to make customer experiences more relevant, look at how customers interact with the loyalty program. Do you make every interaction easy, including redemption? The most common complaint of customers in loyalty programs is how long it takes to redeem rewards and all the restrictions that come with redemptions.
DTC companies should continuously evolve their loyalty programs to make them more attractive and more relevant to the customers. Ideas for making your program more relevant this year include adding more personalized experiences, changing rewards, or offering relevant partnerships with other companies so that customers can redeem your points with other businesses that align with your company’s ethos.
Getting Customer Loyalty Right This Year
So, if you want to make this the year you rev up your loyalty program, check out Retail TouchPoints new report on customer loyalty. And if you’re attending NRF, check out our presentation at 11 a.m. January 16, “The digital migration: First party data, demonstrating ROI, and challenges of scale.”