How to Increase Customer Value without Entering a Discount Cycle

As Americans emerge from lockdown and revenge spending continues to grow in popularity, retailers are tasked with developing new strategies for increasing customer loyalty and engagement that go beyond promotions and discounts.

This is becoming more critical for e-commerce operations. While we can anticipate that physical retail promotion cycles will lengthen as they did in Q4 2020, many retailers have reduced their reliance on digital offers in order to increase footfall. Demand has shifted to digital channels as a result of the pandemic, necessitating less discounting to stimulate demand. In the first quarter of 2021, earnings calls are replete with references to the critical nature of price realization and increasing average unit retail. However, consumers have grown accustomed to promotions, and even if we are no longer reliant on things like coupons to drive demand, brands must find the right ways to drive conversions.

To create more meaningful customer experiences and strengthen brand loyalty, it’s critical not to underestimate customers’ desire for convenience and personalization. By keeping these consumer preferences in mind, retailers can convert shoppers into loyal customers and develop a marketing strategy that goes beyond promotions and discounts.

Discover More Meaningful Ways to Increase Customer Loyalty

Affinity for brands is becoming more critical than ever. Consumers are significantly more likely to purchase a product if they feel an emotional connection to the brand. Additionally, they want to use their purchasing power to recognize and reward brands that exhibit empathy and understanding. Indeed, more than 70% of shoppers believe that a company’s values influence their purchasing decisions.

To begin, you must ascertain the value that your brand provides to the customer. Consider offering customers loyalty points, free samples with purchases, or access to exclusive content in exchange for completing the identified next best action—whether that is making a purchase after abandoning their cart, signing up for the loyalty program, or completing another high-value action such as downloading the app. Highlight the benefits to the individual customer and why they should take the desired action for each of these. For instance, you could emphasize the number of points a customer would earn if they converted on an abandoned cart. You can also mention that purchase if it moves them up a loyalty tier.

Second, as brand loyalty becomes increasingly based on a brand’s values, consider emphasizing societal or environmental initiatives in your marketing communications when appropriate. For instance, localize content to highlight the community initiatives to which your brand has contributed, or to emphasize the number of items recycled through resale projects or the carbon savings associated with electronic vehicle deliveries.

Extend the Personal Touch of Your In-Store Experience to Your Digital Channels

While in-store shopping may remain somewhat limited as a result of COVID-19 precautions, retailers should not underestimate the power of a personalized digital shopping experience to increase brand loyalty. By offering online consultations, live chat functionality, or personal shopping appointments, you can bridge the gap between the personal approach of an in-store associate and the convenience of digital channels. Utilize real-time data to incorporate real-time appointment availability into customer communications, as well as convenient calendar add-on reminders. Not only will this add a personal touch, but by utilizing real-time data, you can ensure that customers never see out-of-date information or availability.

Leverage Other High-Value Perks, Such as Free Delivery

Free delivery is becoming an increasingly important conversion factor. Indeed, a recent survey discovered that nearly half of customers ranked free delivery as the primary reason for making a digital purchase, surpassing promotions (39 percent). When appropriate, emphasize your free delivery option and value proposition. For instance, if a browsed, carted, or recommended item qualifies for free delivery (i.e., it exceeds the delivery threshold), be sure to promote the benefit when retargeting the product. If the customer’s cart value falls short of the threshold, consider dynamically displaying the remaining spend required to qualify for free shipping.

Never Undervalue the Convenience Factor

While price and value are undoubtedly important factors in a customer’s purchasing decision, 66% of shoppers say they are willing to pay more for a superior experience. By optimizing the shopping experience, you can increase conversions. Several strategies for cultivating a seamless, best-in-class experience include flagging recently abandoned or browsed products outside of the expected trigger message, layering on helpful, high-value communications about delivery information, inventory levels, or rewards accrued if the purchase is completed, and reminding customers to repurchase replenishable items in a timely manner with dynamic and personalized reminders.

Profit from Changing Consumer Behavior

Consumers want to receive their purchases quickly, which relates to convenience and delivery. Many consumers were compelled by the pandemic to experiment with new fulfillment methods, such as buy-online-pickup-in-store (BOPIS), which have since become integrated into the supply chain. If a consumer has browsed a product or added it to their cart, one possible reason is that they do not wish to wait. You can inform them that the specific item they’ve expressed interest in is available in their local store via a rich push notification or dynamic content in an email. To take it a step further, you can display in-store inventory levels to reassure consumers that their store visit will not be in vain and that they will always find their product.

Maintain a Focus on Individuality

Promotions and sales are an unavoidable part of the retail game and are critical revenue generators for retailers, particularly during key seasonal events such as Black Friday. This begs the following question: how can retailers effectively trade during those seasonal events without reverting to their usual discounting practices? Maintain brand integrity and product value in these instances by personalizing discounts to make them appear more relevant. Consider framing the discount as a time-limited, private event, or create an air of exclusivity by including the promotion details or code exclusively in an email. To add another layer of personalization, customize promotional messages based on customer behavior by emphasizing recently browsed categories or favorited brands included in the promotion.

As retailers continue to work to convert customers into loyal shoppers, these strategies can assist in developing and executing a new game plan that is not dependent on promotions and discounts.

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