Need to Break the Discount Cycle? Focus on Customer Loyalty

Are you caught in a discount or rewards rut? To juice sales do you feel like you need to offer bigger and bolder promotions? Are you constantly advertising to find new customers, as the ones who buy from you once never seem to return?

You aren’t the only commerce marketer feeling this way. Customers aren’t as brand loyal as they’ve been in the past and they don’t have to be. With the rise of the digital world, consumers are now more connected and knowledgeable than ever before. Armed with price comparison websites, customer reviews and countless discount offers, it’s easier than ever to shop around. Accenture’s recent research highlights a growing ‘switching economy,’ with 60 percent of customers saying they are more likely to change brands than they were 10 years ago.

Inspiring loyalty will require a different game plan. And the place to start is to look at your organization’s people, processes, technology and data. If you rethink the way you interact with customers using the data you have, the best technology, and a streamlined process for interacting with customers, you can come out ahead.

Let’s look at the four keys to inspiring loyalty. 

Get Your People on Board

Everyone from the CEO to the person filling the orders needs to think about customer loyalty. An executive sponsor is critical—one who can evaluate marketing techniques, fulfillment, product selection, and other aspects that can win over customers or turn them off.

Consider adding a loyalty manager that can help legal, customer support, IT, marketing and communications, and various business units get on the same page. This person also needs to help define measurements of customer loyalty and the metrics that lead to customer loyalty, as well as making sure programs that are working don’t get killed.

Examine Your Processes

This might involve less what you need to do than the things you need to stop doing. Do your best customers get the best discounts, dibs on new products, and white glove treatment in remedying problems? Or are your coupon codes floating all over the internet and your marketing programs offering the same products and services to everyone because you can’t (or won’t) personalize and segment?

Speaking of segments, customers who shop with you regularly should make up their own segment. If resources are limited, their concerns, complaints, and needs are met first. When that customer clicks through an email, for instance, the system should recognize the shopper and treat them accordingly.

Make the Technology Leap

To understand your customers well enough to measure their loyalty and serve them appropriately, you need to take your technology game up a notch. It’s important to have integrated point-of-sale and customer resource management across all channels. When someone buys in-store, can you match that record to their online purchases? Is someone active in recommending your product through social media? Critical technologies include a social listening platform, a data warehouse, and an integrated marketing solution.

It’s fine to start small, as even simple tools can make a big difference. The fashion retailer Vince Camuto started to move away from paid search as a strategy when it began using email tools like cart recovery and triggered welcome messages. The retailer found it could market to engaged shoppers, at a lower cost, through a sophisticated use of email.

Get More Savvy About Metrics

Opens, clicks, and conversions are important, but so is understanding the customer across multiple platforms. You can’t identify your best customers if you don’t know how long a customer has been active with your brand, how frequently they buy, or how large their order value is. A holistic look is important, as well as a way to capture activities that aren’t positive. Take the example of the person who buys hundreds of dollars worth of clothing from you each season—and returns 90 percent of the items every time and always at the last possible moment. If you provide that shopper with the best offers and ignore the person who buys a few full-price items every season, and never returns anything, you’re misunderstanding customer loyalty.

Looking at loyalty vs. just sales, requires a leap of faith. But it's necessary. In a shifting consumer landscape, simply offering the best product or the best price isn’t enough to ensure success, let alone survival.

Susan Wall is vice president of marketing at Bronto Software, responsible for Bronto's marketing strategy and leading all revenue marketing, customer marketing, branding and positioning initiatives. Over her nine years in this role, she has led development of a highly sophisticated B2B revenue cycle that bridges the gaps between sales and marketing. Wall brings an extensive background in brand marketing, product marketing, marketing research, media and advertising to Bronto Software. Prior to Bronto, Wall was COO of VisionPoint Marketing and a founding partner of @PLAN, which she helped lead to a successful IPO and through subsequent ownership changes. Over her 16-year tenure at The New York Times, she held many key roles, including Director of Marketing, Director of Advertising Sales and Executive Director of Sales Operations. Wall has been featured in Ad Age, Adweek, The New York Times, ClickZ, and iMedia and is an active participant in the interactive and retail marketing communities.

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