Loyalty Customer Engagement
Michael Spencer
A.I. Writer, researcher and curator - full-time Newsletter publication manager.
Retailers know the key to profiting from their loyalty program and loyalty marketing which emphasizes and maxes out their top 20% of customers in terms of lifetime customer value (LCV). These are the shoppers who have the highest average transaction sizes, visit the brick-and-mortar store the most frequently, and max out monetization and average transaction size the best.
Customer value has to be defined as their unique RFM as compared with your average customer:
Native segments that sync with your Cloud POS, can give retailers customer insights that are right at the sweet spot of loyalty customer engagement.
The emotional customer journey with a retail brand must typically go through the following high-value relationship trajectory stages.
- TRUST
- RECIPROCITY
- COMMITMENT
80% of your sales come from 20% of your customers. As a small business owner, even if you’ve never heard of the Pareto Principle, you know this rule of thumb intuitively.
Modern Consumer
What is precious to the modern consumer, think about it?
- Time (on mobile, this is a question of micro-seconds)
- Silence (freedom from advertisement,online "noise", unsalient information)
- Experiences (the on-demand economy is based on this new reality)
- Values, which are congruent with their own authenticity (their journey)
Today’s consumers, especially the younger generation, value experiences over material goods: 72% of millennials would rather spend their money on experiences than on products. (JWT Worldwide)
Make Shopping:
- More seamless (easy, frictionless, omnichannel facilitated)
- More immersive (interactive, CSR, UGC, experiential)
- More personal (at every touchpoint, their channel, at their timing, according to their preferences, their history, matching them with products they have shown an interest in)
- More targeted (value, recency, monetary segments + customer personas + retail vertical specific)
Customers are more sophisticated now than your typical Retailers, the best software integrates brick-and-mortar in-store reality (POS) with the cloud, IoT, ecommerce.
RFM Segments
RFM segments that are linked to historical POS data, track the bottom line, sales-centric data. Mapping your customers with RFM insights provides segments that are tailored to ROI.
If I know I can send an offer (SMS or Email campaign) to the top 20% of customers in terms of monetary value and average transaction size, I know I will generate the best "bang for the buck".
Keys to Loyalty Customer Engagement
- Data centric cloud POS loyalty solution
- Campaigns that utilize R marketing automation (rMA). These are based on recency of each customer, so provide anti-churn offers.
- Campaigns that target high-value customers to maximize ROI (I'd recommend 12-30 a year, depending on your customer demographics and retail vertical ).
In fact, one recent study found that data-driven marketing strategies lead to a 47% increase in consumer loyalty. (Forbes)
Adapt to the Digitally Native Consumer
Adopting SMS and texting more in both sales and marketing is a good idea to better reach younger consumers. Same thing for trending social networks like Instagram, Pinterest, Snapchat and YouTube.
Experiential Gamification in Loyalty
Due to the increasing emphasis of the customer experience. A loyalty solution that is tailed to the online brand identification taking place with Millennials and brands is key. Such as offering incentives for:
- Brand advocacy online
- Friend-Referrals
- Branded Hashtag mentions (e.g. on Instagram)
- Video or Selfie with a product
- Pinterest pins
- A long-form VLOG on YouTube
- A social share
- Participation in a Contest
- Participation in a Corporate Social Responsibility UGC campaign
- Opportunities for Peer to Peer interactions
- Opportunities to spend time with Influencers (of their age-group and interests)
The Local Store still Rules
Even with the drastic rise of ecommerce, and the adjustments we'll see in Retail from 2016-2020. Brick and mortar (B&M) physical retail still accounts for the "delight" of shopping, which won't be going extinct any time soon.
Conclusion
With the rising importance of digital and mobile touchpoints in Retail, customer engagement itself is being integrated with loyalty programs, loyalty marketing and gamification of experiences to build more emotional rapport between brands and consumers.
Growth Marketing Professional | 11 Years of Experience in Business Development, Digital Marketing, Team Management, Technical Recruitment & Sales Engine Development |
8 年Excellent post Michael Spencer. You have done a comprehensive research about customer satisfactions & Marketing.
Independent Thinker and Writer
8 年You almost lost me, early on, when I thought that the article was going to be focused on retail. Then, I realized how you were also talking persuasively about the importance of integrating a good online and social marketing game, to support the traditional brick & mortar/local advertising efforts. This got me thinking about the quantity and quality of cross-functional communication and teamwork which would be necessary for a retailer to successfully implement that kind of multimodal system. I actually learned something, in spite of my own presumptions! Good post, Michael Spencer.