Retail Loyalty Marketing - 5 lessons learned at the till
24th April 2010
We have been lucky enough to work with a number of retailers recently and the research and campaign results have given us a start to a growing library of marketing 'rules of thumb' that are proven to get the tills ringing.
A summary is below, but if you are interested in the details behind these learnings, please feel free to ask here, or directly through email, twitter etc...
Learnings
- In categories where customers shop regularly, increasing basket size on a particular shop is difficult. Better to set your marketing sights on the goal of getting all of the 'shops' the customer has in your category.
- A satisfying/great shopping experience is critical to getting the majority of shopping visits from each customer. Transactional NPS - we call it 'Active NPS' or 'Bottom-up NPS' helps here. This approach allows you to determine the key drivers of customer satisfaction with the shoppijng experience you provide.
- When it comes to direct marketing offers that drive return visits, timing is more important than content. Getting the timing right, touching them when customers are in their 'next visit pending' mode for your category, delivers the majority of the sales results. The extra effort required to also get the right offer is not always worth it.
- Word of Mouth 'seeding' works. The idea that new products can be effectively promoted by giving away free samples to spark conversations is a viable option for marketers. But, you can save some money and effort by randomly selecting customers rather than trying to identify and recruit 'Influentials'. The Influentials do accelerate business, but new customer acquisition is just as effectively achieved through randomly sampled customers. Do not give samples to more than 2% of potential customers though, it's a waste.
- In retail loyalty programs, NEVER underestimate the importance of a customer reward redemption. Customers' NPS ratings of your program skyrocket after redemption, members actively brand switch to collect bonus points after redemptions; their behaviour measurably changes after they get their just rewards. Oh yes - and smaller reward vouchers (if you use them) deliver great sales lifts when they are redeemed, large ones not so much.
It's a fascinating business this loyalty marketing.
