Published on Oct 07, 2019
To be competitive in the current retail environment, brands must go the extra mile to earn repeat customers and gain their loyalty.
For years, research has shown the positive impact repeat customers have on business—increasing customer retention rates by 5% has proven to increase profits by 25% to 95%. The best kind of purchaser is a brand loyalist, someone who:
- Keeps coming back for your products and tries new ones, too
- Recommends you to their friends, family, neighbors, and coworkers
- Chooses you over cheaper or more convenient brands
- Advocates for you on social media
Forrester’s March 2019 report, “The New Paradigm of Retail,” digs in to what brands must do to win over consumers in today’s world of comparison and convenience. Our take is that brands must consider things like establishing loyalty programs, implementing price-matching policies, and resolving customer issues quickly and efficiently.
Establish Loyalty Programs that Offer Competitive Perks
Loyalty programs have evolved over the years into highly personalized platforms integrated with behavioral data, tailoring rewards (and how they’re earned) to specific buyers’ shopping habits. Some prime examples of unique, successful loyalty programs include:
- Krispy Kreme: The doughnut giant rewards customers for buying from them, even if it’s not their traditional, popular products (single doughnuts and dozens). Their segmented program also rewards those who stop in for coffee and specialty drinks.
- Sephora: Sephora capitalizes on the cross-channel shopping experience with their Beauty Insider program. Any samples given by an associate in-store will be added to the customer’s online account, in the hope that they’ll choose to purchase the product after trying it at home. Sephora also analyzes what products their members are viewing online and saving—but not purchasing—and will push tailored discounts on those items or brands.
- REI: The outdoor retailer uses their program to drive loyalty and get customers outside (preferably in gear purchased at REI). In addition to 10% cash back on every purchase, members can earn discounts on outdoor events, adventure classes, and more. They also get exclusive access to annual sales and discounted equipment rentals.
Loyalty goes a long way—for retailers and their customers. If the goal is to create brand loyalists out of your frequent visitors, then offering a program that rewards them for shopping with you (and not your competitors) is a no-brainer.
Match Competitor Pricing to Retain Customers
With a myriad of shopping options, consumers can often find identical products or services at a lower price than you’re offering. According to Forrester, customers are increasingly using comparison engines—Google Shopping, PriceGrabber, or Shopping.com—in your store to analyze their options and make timely purchasing decisions.
Provide Price Matching Policies
Instead of letting a competitor’s price-slashing steal your hard-earned repeat customers, offer price-matching options. Whether it’s a post-purchase refund of the difference, matching directly from a customer-provided source, or advertising a discount price during a competitor’s sale, price matching is a straightforward way to deter customers from purchasing your products elsewhere. It’s a small price to pay for long-term loyalty.
Resolve Issues Quickly to Protect Your Reputation
One of the best ways to show customers you care is by responding to their complaints. Implementing a top-of-the-line online reputation management platform allows brands to resolve issues and create a better outcome for the customer and themselves.
Enable Fast Complaint Resolution
Closing the loop bodes well with consumers; a recent SMG report revealed that 84% of customers who are highly satisfied with problem resolution express a high likelihood to return to the business. Reviews provide an important platform for your recurring (and sometimes unhappy) customers to experience stellar service, to increase affinity for your brand, and drive loyalty.
Keep Customer Loyalty Top of Mind Across Your Brand
When millions of products at a variety of prices can be accessed virtually anywhere, creating a sense of loyalty to your brand is the best way to ensure consumers choose you over the competition. To learn more about how to create a winning retail experience and drive customer loyalty, download the Forrester report: Integrate a seamless digital + in-store experience to drive cross-channel conversion.
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