When your retail marketing goals are tied to revenue, loyalty and retention are the name of the game. The unwavering truth of marketing is that it’s more cost effective to retain existing customers than to acquire new ones.
Your path to marketing revenue depends heavily on building long-term relationships with your customers. But what drives lasting loyalty and retention? Exceptional, highly personalized experiences at the right time and on the right channel.
Read on to learn more about why retention and loyalty are the cornerstones of modern marketing strategies — as well as real tactics you can use and insights from leading brands about how they’re putting these strategies into practice.
Think Big Picture: Customer Lifecycle Goes beyond the Classic Funnel
As a marketer, you are most certainly aware of the classic funnel approach to marketing, where you guide people from the top of the funnel (awareness of your brand and product), through the middle (increasing knowledge), to the bottom (familiarity), where ultimately you have the chance to drive a purchase.
However, that’s only the tip of the iceberg when it comes to the bigger picture of the customer lifecycle. From there you have a host of other other stages your customer can go through, including post-purchase, second purchase, loyal customer, brand advocate, loyalty program member, churning customer, and won-back customer.
Considering the entire customer lifecycle requires a true obsession with the customer experience from end to end. Recent research from Forrester, commissioned by SAP Emarsys, revealed that 56% of customer-obsessed companies see better customer loyalty and improved retention from omnichannel efforts across the customer lifestyle.
You have opportunities to add value and build trust at every stage of the customer lifecycle, but it takes a strong combination of tactics and technology to make that possible.
Strategies to incorporate
To become more “customer-obsessed” and think more holistically about the entire customer lifecycle, here are a few key strategies:
- Ensure your data is unified, so you can have a 360-degree view of your customers getting a better understanding where they’re at in their buying journey,
- Use AI-driven algorithms to analyze that unified data and build customer segments, so you can speak more directly to your customers’ needs and goals. Create segments around where someone is in the lifecycle and also around their buying habits (low spender vs. high spender).
- Use product recommendation, back-in-stock, abandoned cart, and wishlist tactics to create inroads for cross-selling, upselling, and bundling.
- A/B test the results of your various programs to review success rates, make incremental adjustments, and continually improve outcomes.
It’s all well and good to think at a high level about the customer lifecycle, but here are two real-world examples from retailers in the trenches. ECO. Modern Essentials is an essential oils brand, and French Connection is a popular clothing retailer, and they’re both using modern, innovative tactics that put their customers at the center of their omnichannel marketing. They’re providing the kinds of experiences that build relationships and drive retention.
“So when we honed in on our messaging and our customer journey, it was very disjointed. So there was different messaging coming across from different channels. We really had to dive into that customer journey and identify every touchpoint we had with our customers, make them streamlined, make them consistent, and make sure that it was one platform that we were using to push out all of this messaging so that internally our team was actually able to execute what we needed to do. […] Messaging on every channel can now be consistent, emphasize our brand, and promote recognition when customers see the same image or message consistently. And in the end, it was a far better experience for our customer. And so instead of a customer coming onto our website and trying to convert them straight away, we were really investing in the customer coming along the journey with us to become a lifelong customer instead of just aiming for that first purchase every time.”
“So what we have really been able to achieve is consistent revenue, via our lifecycle flows. So this has led us to be able to increase engagement within these segments without increasing our batch sends or batch send communications to customers. We really have been able to be targeted and precise in terms of the communication to these different segments and really focus on activating them at the right time for them. So by doing that, we have been able to see that consistent revenue uplift via our email channel. And within the last six months [we] established about 22% of our revenue via email has been driven by our lifecycle automation. […]”
Think Seamless Experience: The Product Lifecycle Impacts CX and Loyalty
Your customers aren’t the only ones going through a lifecycle; your products do, too!
Did you know that among key drivers of loyalty, globally, the #1 driver of loyalty was product selection? Your products and their availability have a direct impact on customer experience and, ultimately, customer loyalty.
We’ve learned from recent supply chain disruptions that marketers have to be prepared for anything, including the dreaded “out of stock” scenario. Then there’s the opposite problem, when you have more stock than you can handle because of a sudden economic downturn, when customers tighten their wallets. Of course you always have seasonal demand to consider, such as the rush of the holiday season, and with it the inevitable influx of returns.
As a marketer, you need the agility and flexibility to adjust to whatever the market throws at them, and you need clarity into your product lifecycle so you know what to promote and when to promote it.
“Brands risk tarnishing their reputations by promoting products with limited or no availability. Making promises — and keeping them — is what drives customer loyalty.”5 Trends Shaping the Future of Retail Strategy & Execution
Strategies to incorporate
As you combine the product lifecycle with your overall omnichannel strategy, here are some effective tactics to employ:
- Ensure your front and back office data is connected, so you have full visibility on supply chain, returns, and fulfillment status.
- When experiencing fulfillment issues, communicate any changes to timeline and make it easy for customers to adjust orders. Consider using product recommendations to guide your customers toward comparable alternatives.
- Encourage customers to sign up for a waitlist and/or back-in-stock notifications. This can keep you informed about customer demand so you can better forecast sales and replenish stock, while also making customers feel engaged, heard, and supported.
- Review return data to uncover trends, such as why some items are returned more often, and who is returning them. Use this data to inform your segmentation and discounting.
Covetrus is a brand focused on animal health and veterinary supply, whereas Reformation is centered around sustainable fashion. As different as these two brands may be, they both have to take supply into consideration to ensure their customers (whether they’re furry or otherwise) have the kinds of brand experiences that keep them coming back to shop again and again.
“Like most e-commerce companies, we have a lot of standard automations: welcome series, abandoned series, transactional emails, etc. But then we really have a lot more animal-health focused emails, like refill reminders, prescription reminders. [We’re] working on rolling out a series that can remind you when it is time to give your pet — your dog or cat or horse — their dosage for, let’s say, preventative medication. And then, really, between that, one of the unique instances about this business is that with prescription medications, typically preventatives, most time between orders are six to 12 months — you buy a six-month supply or a 12-month supply of your medication. So we also have a lot of these automations as lifestyle and engagement campaigns, [which are] really filled with educational content and relevant content. So when there is a need for a refill, when [customers] do have a need for something else, they’re already engaged with the veterinarian. And that’s really the first place they think to go to fill that need.”
“So we’re really using, ‘waitlist’ is what we call it, and ‘back in stock’ as a demand signal. So that way we’re not overproducing particular SKUs. What we’re doing is, like you said, we’re looking at, you know, hey, we produce X amount to start with. If you sell out, you know, can we put this item on waitlist, give people a chance to sign up for a size and style, and then get a sense of how many people are kind of waiting for that style to come back in stock, and then we can determine whether or not we want to recut it. And you can imagine all the data points that come in from that, and then also the communications that need to be produced to make that experience kind of seamless.”
Let Loyalty and Retention Guide Your Strategy
When you have visibility into your customer and product lifecycles, you can combine those insights to build a powerful omnichannel strategy. By addressing your customers as individuals, not nameless and faceless numbers, you can begin to build the kind of trust and respect that lead to long-term satisfaction, so they’ll return to your brand time and time again.
It all comes back to the golden rule: treat your customers the same way you want to be treated! Unless for some reason you don’t want exceptional experiences… then maybe just stick to the tips above and the rest of the strategies in this retail trends whitepaper, which SAP Emarsys commissioned the experts at Retail TouchPoints to create:
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