THE STATE OF CUSTOMER DEVOTION IN RETAIL PART TWO

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1 THE STATE OF CUSTOMER DEVOTION IN RETAIL PART TWO

2 A QUICK RECAP: PART ONE... THE OBJECTIVE We were intrigued to discover how customer s devotion to retailers is influenced by loyalty strategies. THE METHODOLOGY To discover more about devotion we conducted a survey of 7,291 retail consumers across 9 countries. THE HEADLINES Don t get dumped by your customers: Creating true devotion by learning from real-life relationships Shoppers say they don t get anything in return for personal data What s in it for me? : Three quarters of UK shoppers say they get nothing in return for sharing their personal data with brands ONLY 8 % OF UK CUSTOMERS ARE DEVOTED TO THEIR PREFERRED RETAILERS Devoted consumers are your most loyal customers. They engage with your communications, act as brand advocates and will always choose you over a competitor. GLOBALLY, CUSTOMER EXPECTATIONS ARE CHANGING ABOUT THE RESEARCH: Research undertaken by Survey Sampling International across 7921 consumers across 9 countries, on behalf of ICLP, July Random error on a sample of this size is +/- 2.2% at the 95% confidence level. If you would like us to present this work to you, then please contact us. For love and loyalty: 6 signs your customers may be cheating on you brands

3 THE LEVERS OF DEVOTION Here s the final four of the Seven Core Relationship Criteria RESPECT RECOGNITION TRUST RELIABILITY COMMUNICATION REWARDS RECIPROCITY

4 RELIABILITY: CAN YOUR CUSTOMERS RELY ON YOU? In a relationship between brands and customers, consistency and quality is key. When a situation goes wrong, having the right attitude is crucial to repairing that relationship and ensuring that your customers don t go elsewhere. 67 % 54 % 66 % of customers feel that fashion retailers treat them like every other customer they do not feel valued by the brand of customers do not feel that they receive consistent service from general retailers of customers feel they can rely on department stores to take care of an issue compared to 53% of general retailers, 44% of fashion retailers and 42% of supermarkets.

5 RELIABILITY: HOW APPLE OVERCOMES THE UNRELIABILTY OF TECHNOLOGY TO BUILD A BLINDLY LOYAL CUSTOMER BASE 90% brand retention rate Known for successful and reliable products; If we can t make something that is better, we don t do it Accessible online self-service support and Genius bars within stores that customers can rely on to solve technology issues

6 RELIABILITY: RETAILER INSIGHT Success depends on listening to and understanding the customer, enabling retailers to be innovative in response to market trends Empower employees to achieve excellence so that brand promises are met on the front line Those companies that create emotional connections with their customers, who are are trustworthy and transparent, and can sell a brand that people believe in, will be successful in building a loyal following of customers

7 COMMUNICATION: ARE YOUR CUSTOMERS LISTENING TO YOU? One of the greatest challenges is sending relevant and tailored communications to customers without bombarding them with too many messages. Customers want to receive genuine communications that keep them informed and aware of the latest trends, offers and brand information. 64 % 53 % 70 % of general retailers do not send their customers tailored information or content that fits their interests of fashion retailers fail to keep their customers up to date with the latest trends of department store customers feel that brands do not really listen to their feedback

8 COMMUNICATION: TAILOR YOUR MESSAGE LIKE CARLSON REZIDOR HOTELS Segmentation based on customers transactional and behavioural data enables highly dynamic content By looking at last hotel stay data, preferred booking channel, previous open/click rates, and overall brand engagement, content can then suggest the next best action Communications trigger purchase behaviour such as alerts if loyalty points are due to expire, reactivation if there has been little brand engagement and curated travel content to encourage another stay

9 COMMUNICATION: RETAILER INSIGHT The best brands are engaging with their customers through customer-focused, personalised communications They are using segmentation and customer profiling techniques to tailor their messaging and build deeper relationships By engaging with your customers, retailers can foster a sense of belonging which leads to positive referrals and a loyal community

10 REWARDS: ARE YOU STILL REWARDING YOUR CUSTOMER WITH POINTS? Retailers must not confuse loyalty with rewards. Rewards are one tool used to create loyalty, however alone, will not denote customer advocacy. The best loyalty programmes go beyond rewards to understanding the customer s lifestyle and creating an experience that puts brands top of mind over competitors. 71 % 70 % 71 % of customers do not receive special and exclusive offers from fashion retailers of department store customers do not feel that their loyalty is rewarded (compared to 71% of supermarket customers, 75% of retail fashion customers and 81% of general retailer customers) of customers do not receive tailored rewards from general retailers - THIS IS A MISSED OPPORTUNITY!!!

11 REWARDS: 90% OF ULTA BEAUTY S SALES COME FROM ITS LOYALTY PROGRAMME MEMBERS 24.5 million active members 26% year on year growth Ultamate Rewards programme offers points for each dollar spent and bonus points for engaging with the brand via social media, the mobile app, and credit card Birthday and membership anniversary recognition Members are tiered, and can redeem points on over 20,000 products Exclusive gifts, special invites and extended product ranges on offer

12 REWARDS: RETAILER INSIGHT Savvy and strategic retailers are looking beyond reward programmes to delight and retain loyal customers Brands are looking to solve customer s problems and soothe pain points, which will require more than a discount coupon or special offer Rewards should be consistent across all channels, based on customer tiers and on the brand s objectives

13 RECIPROCITY: DO YOU HAVE A RECIPROCAL RELATIONSHIP WITH YOUR CUSTOMERS? 1 in 2 customers expect to receive something in return for sharing their information. Brands that are actively engaging with their customers need to reward good customer behaviour. As customers have higher expectations for brands, it is time for brands to meet, or better yet to exceed those rising expectations. 33 % 25 % 13 % ONLY of shoppers feel appreciated as a regular customers by fashion retailers of customers feel they get something in return for sharing their personal data with department store retailers of customers receive responses to their social media posts or direct messages by supermarkets

14 RECIPROCITY: ASOS CURATES CONVERSATIONS TO INSPIRE CUSTOMER ADVOCACY Online campaign As Seen on Me links customer generated visuals to the e-commerce platform so customers can discover the latest fashion trends Provides customers with a human and rich media experience, creating a sense of community

15 RECIPROCITY: RETAILER INSIGHT Retailers have to ensure they are telling a valuable and engaging story about their brand that customers want to hear more about It is time to regard social media as customer service channels to respond quickly and authentically to customer concerns

16 TOP WAYS TO DRIVE DEVOTION of devoted customers would recommend a retailer to others 91 % 54 % would buy more if retailers treated them with more respect 75 % 67 % of UK customers would buy more if they were better rewarded would buy more if their products were more consistent and reliable 51 % 51 % would buy more if they trusted the brand more would buy more if brands communicated with them better 63 % would buy more if retailers recognised their customer s needs and requirements better

17 PUTTING CUSTOMERS BACK AT THE HEART OF RETAIL To truly engage a customer with your brand, retailers need to think beyond points and discounts to experiences which will not be forgotten when the customer walks out of the store. Devoted customers are the most willing group of consumers to share personal information, opinions and desires with their favourite brands, and are least likely to stray to competitors. Brands need to show their customers they are valued and recognised with personal, relevant offers, and rewards that are designed to both surprise and delight. Loyal customers shop more frequently, spend more and are better advocates for their preferred brands.

18 IF YOU MISSED PART ONE, CLICK HERE NOW! CONTACT US The winners in loyalty will be those that can incorporate these tactics into their loyalty strategy. If you are interested in hearing more about this research and discuss your own loyalty strategies, let s start a conversation today. YOU CAN REACH US VIA INFO@ICLPLOYALTY.COM FOR MORE INFORMATION, PLEASE VISIT OUR WEBSITE ICLP Worldwide 2017 A COLLINSON GROUP COMPANY

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