The Datacrushers Guide to Rewarding Shopper Loyalty
Many retailers understand that the best way to ensure the success of their shopper retention efforts is to reward continued loyalty. In the first part of this series, we discussed the circle of loyalty and the role of LTV/LTS in shopper retention and acquisition. In the second part, we talked about what brands actually do to ensure shopper loyalty through their dedication to providing an excellent UX. In the third part (what you are currently reading) we will discuss how to use personalization and intelligent email campaigns to reward shopper loyalty.
So, how do we personalize our rewards program?
Your efforts to reward shopper loyalty and ensure retention starts with the process of using LTV and LTS to segment shoppers based on their value to the business. Using these metrics will allow you to create an infinite number of groups based on current and projected value. For the purposes of this guide, we will break these shoppers down into 4 unique groups and explain the reasoning behind each one.
It’s important to point out that these values are all relative to what it is that you are selling. In other words, if you sell ceiling fans, shoppers are not about to purchase more than they need. That’s not to say that shopper segmentation is useless for items that are purchased infrequently, rather a proper segmentation strategy requires critical analysis of your shoppers and products before you write it off.
For our purposes, let’s use the example of an online sporting/outdoor goods retailer. This merchant has segmented his shoppers into 4 groups.
- Frugal Shoppers: They shop twice a year at most and spend between $100 – $300 per year. They are generally buying items for themselves.
- Casual Shoppers: They shop 3 – 5 times a year and spend $300 – $600 per year. They are also buying for themselves but are little less fiscally conservative than their frugal counterparts.
- Routine Shoppers: They shop 5 – 8 times a year and spend $700 – $1,500 per year. They are likely buying goods for their family. Winter jackets and boots are purchased annually as their kids get older.
- Generous Shoppers: They shop anywhere between 2 – 10 times a year and spend $1,500 – $3,000 per year. They can be routine shoppers and or enthusiast who enjoys buying the highest-end gear available to them. With more money to spend, they might simply opt to place one or two large orders per year.
Once you have successfully identified the shoppers who fall into these different categories, it all comes down to rewarding them and learning about their shopping patterns. This helps us customize their on-site experience (and our off-site marketing campaigns).
In the long run, these types of shoppers have the most to offer your business so far as repeat revenue is concerned. Therefore, curating a close relationship helps ensure their continued loyalty.
The goal of a loyalty program is very simple: to reward shoppers for making frequent purchased and to encourage positive changes in shopper behavior by tempting them to spend more money with increased frequency. A well-thought-out loyalty program can prevent shoppers from switching to the competition, as well as provide you with priceless insight into their unique preferences.
To remain valuable to shoppers, rewards must be desirable, achievable, and understandable. We can’t tell you exactly what to reward shoppers with. That decision is dependent on your bottom line. However, discounts and free shipping are always welcome.
Which brings us to our next point: communicating these offerings through the power of intelligent email campaigns.
Using Email Marketing to Build Relationships:
Email marketing campaigns are where personalization really shows results. Personalized emails can increase revenue by up to 30% for eCommerce retailers.
There are only two real challenges when it comes to personalized email campaigns. The first is having the customer’s name. The second is the right relevance. With a proper CRM, neither of those points are real issues. From a retention point of view, personalization truly matters. It lets shoppers know that you really understand their preferences and ‘rewards’ them for their repeat purchases.
At the point a shopper has completed a purchase, a combination of personalization and email can drive repeat business and build a long-lasting relationship. A really strong post-purchase strategy, using intelligent email campaigns helps reinforce the good vibes and momentum that comes following the initial purchase. It helps keep your brand in the shopper’s mind and maintain open communication with them. When properly implemented it can drive repeat purchases and ultimately lead to a stronger relationship with the shopper and increase their LTV.
A good relationship is not achieved through an assault on their inbox just because you have their email address. No, it requires intelligent data-driven communication which must provide the right relevance to shoppers.
There are a variety of different emails you can send. All of which will help improve the shopper UX and reward loyalty. Let’s take a look at a few of them to see what the best practices are and how we can get the most mileage out of each one.
- Post-Purchase Confirmation Emails: These emails perform the function of confirming the details of a shopper’s order. They must contain the product (or products), price, and delivery information. To provide the best possible experience, these emails should include 3 really important links that can be easily followed.
- 1) Tracking Information: They can quickly view the progression of their delivery.
- 2) Customer Service: Maybe they made a mistake and ordered the wrong item, or perhaps they realized they need to add more items to the order.
- 3) My-Account: This way they can go directly back to your website to update their information.
Post-purchase emails have a 50% view rate when compared to standard everyday marketing emails.
- Shopper Satisfaction Surveys: These emails provide shoppers with the opportunity to have their voices heard in a meaningful way. They should be designed for the shopper’s ease-of-use; therefore, simplicity should be kept in mind. Shoppers can then provide valuable feedback in a quick and efficient manner that won’t feel like a burden or annoy them.
Satisfaction surveys also tell shoppers that you care about their well-being, and want to hear from them so that you can improve their shopping experience.
- Product Recommendations: These emails provide shoppers with product recommendations based on their purchase history. They should include relevant products your shoppers are likely to be interested in. For example, if they have recently purchased boots, perhaps they would be interested in getting a nice pair of socks to go along with it.
- Seasonal/Holiday Sales Notifications: These emails should be sent out prior to a significant sale, such as those you might run before a specific season or holiday. For example, with Valentine’s Day coming up, now would be a great time to buy chocolates shaped like tents.
- Birthday/Shopper Anniversary emails: No, these are not the same as cart-abandonment or post-purchase emails. These are emails that should be sent to celebrate a significant event, such as a shopper’s birthday or the anniversary of the date they created an account on your website. This way, it is possible to keep in touch with shoppers and reward them in a really casual way which won’t turn them off to your business.
The ultimate goal of a retention strategy is to ensure your customers are happy and extremely satisfied with their order. There is no easy way out when it comes to making sure these goals are met because it is a mix of providing the best possible shopper UX in conjunction with a well-planned communication strategy.
It is a real challenge to maintain a high quality of service over a long time and across hundreds, if not thousands of shoppers. Warren Buffet is quoted as saying “It takes 20 years to build a reputation and 5 minutes to ruin it.” Well likewise, in the world of eCommerce, it doesn’t 20 years to build a reputation – it can be done in 20 weeks. But it doesn’t take 5 minutes to ruin it either – it can happen in 5 seconds – especially with the proliferation of social media. That being said, when mistakes happen it’s really important to tackle them as quickly as possible and to be overly courteous and helpful to rectify the issue.
To ensure your shoppers avoid any unpleasant interactions with your site or customer service, you must build a strong company culture that revolves around being shopper-centric. In this way, everyone who is involved, in the day-to-day operations of your business will be thinking about and be handling situations, in a way that truly puts the shopper first to meet their unique needs.
This way of thinking must be backed up by shopper data. It is the key factor behind all of the best retention strategies. This data provides insight into what your shoppers want and will provide the means to enhance the overall shopper experience.
If you manage to get that all right (and you will!) you will keep the shoppers happy and spending for a long time to come.