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© 2015 – STRICTLY CONFIDENTIAL – Red Ant ® Redefining Loyalty for the New Age of Retail Time to ditch ‘loyalty’ and start being relevant…
© 2015 – STRICTLY CONFIDENTIAL – Red Ant®
Redefining Loyalty for the New Age of RetailTime to ditch ‘loyalty’ and start being relevant…
© 2015 – STRICTLY CONFIDENTIAL – Red Ant®
Traditionally, gaining customer loyalty has been seen as something of a ‘holy grail’ – once you have hit upon a way of helping
customers to value your products above your competitors’, you can rely on them indefinitely for repeat business. However, ‘loyalty’ suggests that the customer owes something to the retailer – in reality, the reverse is true. Today’s retailers are beholden to the
customer - if they don’t meet their needs, even the most traditionally loyal customers can easily go elsewhere.
© 2015 – STRICTLY CONFIDENTIAL – Red Ant®
Relevance, not loyalty…Context-specific, personalised customer engagement matched to the customer’s individual needs:
• Retail – tailored activity related to customer type, e.g.:• People making luxury purchases will be looking for a true one-
to-one experience, facilitated by a personal shopper • People doing their weekly grocery shop are more inclined to
value discounts, offers and initiatives which make their lives easier
• Location – where shoppers are, both physically and in the purchase cycle, e.g.:• Pinpointing customers as they pass or enter stores using
beacon technology and smart ads/displays • Sending reminders and alerts as they approach the checkout
• Time – when people choose to make purchases, seasonal and ‘milestone’ influences, e.g.:• Alerting customers to special lunchtime offers/meal deals
which are time-limited• Sending information and offers linked to special occasions
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How To Be RelevantWanting to provide relevant experiences is one thing – delivering them is another. It involves accessing customer data and gathering it into one place to ‘crunch the numbers’ so that it can be analysed and used intelligently. This is where retailers’ IT and Tech departments sometimes get stuck – it’s difficult to justify the perceived cost of this kind of systems integration if there’s no existing business case for it.
The key is to focus on small initiatives that target small, measurable sub-sections of customer. These will prove the business case for broader changes. If you can show the business what relevant, targeted loyalty can do for your uptake and conversion, broader and bigger initiatives will be quickly agreed to…
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Step 1Choose an area relevant to the customer
• Focus on something which definitely has an impact on customer behaviour
• Who uses the retail app is a good place to start, as the data is ‘owned’ by the retailer, it’s easy to access and customers have opted in to providing information by downloading it. This is important – as highlighted in a previous article, there’s a fine line between providing a personal service and ‘stalking’ your customer
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Step 2Analyse the data to identify customer profiles and activity
• When and where they access the app – when they’re out shopping, in-store, in the changing room etc.
• What they use it for – product comparison, special offers, price checks, advice and so on
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Step 3Use the results to segment customer behaviour
• When and how they are most likely to make a purchase
• Which initiatives they are most likely to respond to – does the data indicate that they like receiving product-specific offers when they’re in-store, do they look for additional product information when making big-ticket purchases?
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Step 4Experiment with small initiatives and swift iterations
• Select one or two areas where you can make changes based on customer behaviour – if the data shows that they respond to alerts about product offers, trial in-aisle deals and discounts related to previous purchases. If they tend to make significant purchases based on special occasions, trial birthday offers related to wishlists. Limit activity to a couple of stores so that the data and results can be managed easily and without too much disruption to the business Focus on where customers are likely to buy (context) and when they buy (chronology) to pinpoint the best time and place for data-led initiatives
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Step 5Gather the results to make a business case
• Small, swift iterations allow you to quickly access the outcomes, analyse the results and get a sound idea of the impact of your initiative
• Make sure you have a control group, so that the business can easily see the impact your initiative has made outside of the wider business conditions
• Impact analysis and implementation results can be built into an evidence-based business case in advance of full rollout – ‘try before you buy’ can be key to selling in a concept as it minimises risk and investment.
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To Summarise…Clearly, it’s not possible to become truly relevant to the customer without access to the data, and that involves working with the right kind of flexible platform which will bring it all together in an intelligent, useable way. This is where IT departments need to take a
leap of faith and make friends with the suppliers who can provide the ‘number crunching’ facilities they need.
Once they’ve taken the plunge, however, this ‘start small, move fast’ approach should not only increase sales - it will also have the added benefit of making the customer feel
that the retailer ‘gets’ them and what they need.
Contact
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www.redant.com
+44 (0)845 459 3333
© 2015 – STRICTLY CONFIDENTIAL – Red Ant®
