The biggest cause for concern amongst the UK adult population in August 2022 is linked to the sharpest increase in the cost of living since WW2. In a recent poll by one of our clients here at Apadmi they asked customers what they wanted from a loyalty and rewards program and the answer was a resounding “money saving offers” , ways to save money through this tricky period.
To do this effectively you need to refocus your loyalty program or if you don’t already have a digital loyalty program, create one to allow you to build an environment for your customers that helps them to combat the strain of financial burden. This will give you the opportunity to form new and improved customer journeys, increase intent and sales throughout the customer lifecycle and gain insight and data to gain trust and loyalty for the long term.
Whatever the key demographic of your business, providing a digitised loyalty experience over let’s say, a plastic card scheme or paper based coupons allows you to complete the sales lifecycle that includes purchase intent, sale, after sale and retention.
A loyalty program can act as a fantastic intent to purchase platform – providing personalised offers based on my historic purchases or recent knowledge sharing via data or web forms etc.
It will give me incentive to purchase – 10% off with my first order, free delivery or a loyalty bonus for multiple purchases.
I can offer similar or complimenting products and services to encourage larger basket values before, during and after the purchase. Use gamification coupons to increase interaction by over 30% and give customers a chance to “win” their rewards.
Then I can also trigger personalised rewards based on the type of customer you are, VIP, gold member, silver member etc.. to keep you coming back to my business.
Real time tracking of customer data allows me to assess interactions and increase intent and call to action opportunities providing me with the information I need to send the correct communication at exactly the right moment.
Now more than ever before the need to look at how you interact with your customers whilst promoting value and quality is key to managing the impact of the cost of living crisis on your business.
Food based retailers have decided that to combat the cost of living crisis they will ask the manufacturers to use the traditional “shrinkage” method in order to manage their P&L effectively through this harsh economic climate. Inflation based shrinkage means that consumers still pay the full price for the product but the manufacturer makes the product smaller.
This doesn’t cost the manufacturer more, doesn’t cost the retailer more, typically shouldn’t cost the customer more but they are getting less than they would before the shrinkage took effect.
Consumer loses and gets less for their money. Consumer feels let down and unloved and will change brand quickly, even if they have been a loyal customer for years. The recent Lurpak butter PR disaster is an example of both inflation without shrinkage pushing costs up hideously high and the inevitable push back from the consumer on the perception they are being treated badly or taken for a fool. Lurpak PR and sales suffered as a result of the backlash on social media and they had to rethink their price points as a result. Will they get those formerly loyal customers back?
Customer Satisfaction isn’t just based on experience anymore, its based on the retailer accepting and catering for my two distinct personas. I have my digital persona – my digital self – this is the me who researches purchases, purchases online via multiple devices, shares content on the state of the economy and cost of living on social media or with friends and the me who uses my mobile 4.5hrs a day for nearly everything from games, diary entries, banking, shopping and payments.
Then there is my physical persona, my actual self the person who walks around the supermarket or clothing store and physically touches product, noting difference in packaging size, in the amount of product that’s missing from the shelves or rails and makes decisions that I will share with my digital persona on how I view that shopping experience.
I am two people grafted together to form my hybrid self – two personas and one Psyche. The Phygital me!
There are generally three types of customer facing retail businesses, Retail Bricks & Mortar, Retail Online only and a Hybrid of the two. Examples of bricks and mortar business would be Primark – a leading international clothing retailer employing more than 70,000 colleagues in 14 countries – and growing. But in the UK at least they don’t offer a digital or ecommerce solution to their customers. Nothing for my hybrid persona here, only my physical self.
Supermarkets are an example of a hybrid model with stores and ecommerce but they have yet to fully adopt a digital first strategy for a hybrid persona in most cases.
Some retailers have decided to go online only as a series of economic disasters have meant they can only stay competitive through removing their main overheads and taking store costs (rent, utilities, staff wages etc) out of their P&L. Examples of these types of businesses are Cath Kidston, Debenhams and Topshop with Debenhams removing itself from the high street after 243 years!
These business have missed opportunities for years to understand their hybrid customers better and are only just starting to utilise digital strategies that allow them to interact and evolve to the needs of their customers digital personas since they went online only.
Pureplay brands like Ebay and Amazon meanwhile have taken the world by storm and adopted a digital first approach to every aspect of their customer journey. They engage and interact with both my personas to give me a highly personalised and configurable customer journey because they try to understand the hybrid me.
In the past decade we have seen the power of understanding your customers, creating dynamic and agile customer journeys, increasing purchase points in the customer lifecycle, increasing intent to purchase via reward points, coupons, vouchers or gamification etc… we only have to think Tesco Clubcard or Nectar to see how successful you can be if and when you get this interaction right.
However most businesses are not an Amazon, Ebay or a Supermarket giant, so how can businesses leverage the customer journey and increase intent during the customer lifecycle?
By focusing on Loyalty and long term engagement through rewards and personalised offers means that you start to learn more about your customer, faster and with less barriers to secure knowledge.
The recent pandemic changed the rules on digital persona creation and interaction. As businesses were forced to close, so many people who didn’t use online resources or those that didn’t have a digital persona realised they would need one to get them through the foreseeable future whilst the pandemic lasted.
Mobile device usage increased by over 45% in the 50 – 65 year old bracket during Covid and the young-old age group 65 – 74 were 92% more likely to use digital devices during the pandemic as they looked to combat loneliness, inability to go shopping etc..
This in turn decreased the barriers to digital adoption by levels not seen since the creation of the Internet and the PC becoming ubiquitous.
With digital device usage at a level never seen before across all demographics bar the old – old 75 plus demographic, your audience has never been bigger, your potential customer base never more receptive to receiving the right digital communications. The “marketplace” is huge and the “need” for most people to save money amid the current economic climate gives you the perfect way to maintain and increase revenues whilst gaining and augmenting brand trust and retaining customer loyalty.
Interested in augmenting or building a loyalty program for your business? Have an App that doesn’t have a loyalty offering? Maybe you have a successful paper or card based loyalty program and your looking to digitise it?
We have solutions to help solve all these requirements.
For more information or a no obligation chat, give me a call and lets see if we can take your loyalty and rewards offering to the next level.