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Apr 25, 2022

Five Ways Retailers Can Drive Customer Loyalty

A less-than-stellar customer experience (CX) reminded me that with April being Customer Loyalty Month, retailers have their work cut out for them to demonstrate to loyal customers that they value them beyond a transactional basis.

Some time ago, I used a rewards card at a national retailer while buying a few items, and on the way back to the car I noticed the receipt included a coupon for the same brand of shampoo I just purchased. My first thought at that time was that maybe I forgot to buy the shampoo, and it wouldn’t be the first time I got an earful returning home without something on the list. Or perhaps the clerk looked me up and down and decided that whatever hair product I was using, I needed more of it?

On a more serious note, I wondered why the discount hadn’t automatically been applied to the bottle I bought. I briefly thought about going back in and making an exchange, but it would have been too much of a hassle. I ended up leaving on somewhat of a sour note. Is it enough for me to never buy from the retailer again? Most likely not, but as a card-carrying loyal member I expected to be treated better. Like most customers, I expected the brand to demonstrate some level of personal understanding.

A legitimate challenge for retailers is: when does a customer-centric approach instead of “product-centric” truly become the #1 marketing objective?

With apologies to David Letterman, here’s a Top Five list of things retailers can do to show their appreciation for loyal customers.

  1. Ask me: Rather than provide a one-size-fits-all rewards tier, or auto-generate rewards, take the time to ask the customer about their preferences. First-party data is the core of a personalized CX, and a brand that provides a consistently relevant experience that aligns with the customer’s preferences will be rewarded with even more personal data. It’s a win-win.
  2. Follow up: Brands fixated on transactions, rewards, and points often lose sight of the customer at the other end. Redeemed points, though, means that a customer is using a product or service. Or maybe they’ve used an upgrade. Did they like it? Did it meet their expectations? Did they consider it fair value for the money spent? Consider a McKinsey survey, where 58 percent of customers said they expect brands to follow up with them post-purchase. A failure to do so may be construed by customers as a “take it or leave it” approach.
  3. Be consistent: In a 2021 Dynata survey, 17 percent of consumers said the No. 1 way for a brand to earn loyalty was to provide a high-quality experience across all channels. Like the shampoo example, a customer who buys a product online shouldn’t receive an offer for the same product during the next in-store visit. An offer for the perfect complementary item, however, demonstrates the type of personal understanding that drives loyalty, especially if it’s generated on a different channel. Delivering an omnichannel customer experience shows that a brand is in synch with a customer journey. Customers respond to this level of personalization.
  4. Provide updates: Here’s a sobering stat: In a Capgemini survey, 28 percent of customers surveyed said they’ve abandoned a loyalty program without redeeming any points. I’d be curious to know how many do so because they’re unaware of how many points they’ve accumulated. Sending a friendly email reminder is a simple way for a retailer to show that they value the relationship with a loyal customer. Better yet, personalize a reminder. Let a customer who has used points in the past for a fly-fishing rod know that they’ve accumulated enough rewards for a pair of waders. Or, you have enough points for those waders, and by the way there’s a fly-tying clinic next month near you.
  5. Share my values: If a personal understanding is a more important driver of loyalty than discounts and offers, so too is a brand’s position on issues that are important to a customer, be it social responsibility, political, environmental activism, etc. In a 2021 Harris Poll/Redpoint survey, half of the consumers (49 percent) said they find it frustrating when a brand doesn’t align with their personal values, and 28 percent said it would make them less likely to use the brand’s products or services.

The list may seem self-evident, but too many brands seem to not be getting the message. In the same Capgemini report mentioned above, 80 percent of executives surveyed claimed their brand understands the needs and desires of their customers, but just 15 percent of customers agree.

No one said that closing the gap would be easy. Brands must account for increasingly complex omnichannel customer journeys, customers using multiple devices, heightened privacy restrictions and other hurdles.

Data-driven retailers that recognize the value of providing a transformative customer experience are overcoming the common hurdles with a single view of the customer, a key component for demonstrating a personal understanding of an individual customer.

Curious how to reduce costs and drive customer loyalty with rg1 as an omnichannel CX platform that leverages a single view of the customer to deliver a next-best action in the cadence of a customer journey, all from a single point of control? Click here to learn how Redpoint can help your organization put its goals to retail loyal customers within reach.

Related Content

A Personalized Customer Experience (CX) Delivers Loyalty

What is Customer Lifetime Value (CLV)?

Beyond Customer Engagement: Marketing as a Revenue-Driver

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Steve Zisk 2022 Scaled

Thomas Kaczmarek

Director of Customer Engagement Redpoint Global

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