Recession-proofing your business? The Power of Loyalty and CRM

During the last recession, SouthWest Airlines saw its profit surge and it chose not to adopt the strategies applied by much of the airline industries which involve charging higher fees for checked baggage and raising ticket prices and instead kept to it a low-fare brand for its Customers.

After September 11, some customers sent checks to Southwest Airlines to show their support.

?With a recession looming, how do you build up this kind of loyalty and move away from the discount hunters and non-loyalist?

A) Consider how you attract customers. Move away from deceptive offers and price-focused incentives.

More than ever consumers are looking for discounts and 90% of all customers online have searched for a discount code. But numerous brands have not fallen into the trap of creating a self-fulfilling discount-led relationship with their customers. They instead sell on values and often at a premium price, just think of Dyson and Apple.

?Consider how you present your brand, what are your USPs and why should someone buy from you, headline with these and not discounts. Brands like TKMaxx don't offer a further discount on their proposition but are clear in their value to the audience.

?If you do want to nudge someone through with a discount, exchange this for some value from them e.g. a newsletter sign-up. Explain to the user why you don't run voucher codes and when and where you may. To maintain margins, state you don’t use voucher codes sites and any offers will be displayed on your site or sent via email. This should prevent customers from visiting your site first, going to a voucher site and then returning to yours, at a cost of % of revenue to you.

?Alternatively to a discount, consider a value ad. Throw in free next-day delivery, a free product and or a voucher to use if they spend more..

?But whatever you do, don't present it deceptively. Forget small print and instead do as the offer says. One way to lose a customer you paid a reasonable amount to engage with, is to start the relationship with a lie. When they get to the checkout, let them use the voucher, don't then tell them about 20 conditions as to why they can't and forget vouchers for new customers only, returning customers will ensure a lower spend on acquisition and better ROIs.

?B) Build a loyalty program that works

With 90% of consumers now using vouchers, why don't you make the voucher destination your loyalty program??

Over 20m households are now signed up to Tesco Clubcard since the launch of their two-tiered pricing structure. Rewarding Clubcard customers with lower prices. With this they gain invaluable data insight, allowing them to better target but also generate revenue from reselling the data insights.

?Another great loyalty program is Keller Sports, pay ￡10 a year and gets a 10% discount the whole year, plus access to other benefits. If you are marketplace or offering products available elsewhere, consider a program like this (and if it’s free to sign up, that’s even better) to ensure you are always more competitive than your competitors.

?C) Unlimited next-day delivery

?We live in an on-demand culture now, where people expect gratification instantly and next-day delivery has become key. Many brands have followed in the footsteps of Amazon Prime, with brands like ASOS and Boohoo implementing a paid-for next-day delivery program.?

?This is an instant way to buy loyalty, with numerous brands charging up to ￡7 for next-day delivery, charging ￡10-￡15 a year, is a way to ensure customers choose to shop via you.?

?D) Build a value-led brand - and dare I say forget that value just being sustainability?

?Every brand is sustainable now, at some level, this is no longer a key differentiation.

?Think carefully about what your brand represents and live by these values, by doing so you will attract an audience that has the same beliefs as you, and will vocally or visually display their loyalty.?

?Apple has been always able to attract a premium for this reason alone, likewise Patagonia.

?E) Build a relationship

?Humans desire social connections and even in marketing, this is true.

Remember the small things that make a difference.

?Say Happy Birthday. Or send a Thank you gift/note if they purchase – might be a voucher or even something as small as free chocolate in the packaging.?

?Influencers are not your only choice to help vocalise your brands, sending a free product to 100 customers who buy moderately, might be enough to change them into your best customers and recommend you to numerous friends.

?F) Build lookalikes to your loyalist?

?Once you understand who your loyal audience is, consider building a lookalike audience. This will attract similar customers, with the same potential to become loyalists. We offer a way to build lookalike audiences based on individuals with similar purchase intent. Speak to one of the team at ESB today for more details. Or likewise, look at offerings from platforms like Google and Meta.

?G) Partnerships

?We are all in this together and forming a partnership with a complimentary brand may be an opportunity for you to add value to your customer, whilst sharing acquisition costs with another brand.

Brands who have done this well are the likes of ComparetheMarket with cinema tickets and Vitality with their reward program.

Conclusion

Whatever option or options you choose to take, remember that building a larger CRM base and encouraging those people to repeatedly buy from you, is a lot more cost-effective than constantly hunting for new customers.?Invest in building your CRM now to ensure you can reap the benefits of a large, engaged CRM base in Q4.

ESB specialises in helping brands build a CRM base at scale and can implement a CRM system to manage them or simply help you put the strategies and journeys in place to ensure the maximum LTV (lifetime value) from each sign-up.?

?To speak more, email?[email protected]