Shopper Acquisition Vs. Retention—Where Should Brands and Retailers Invest?
Tuesday, May 22nd, 2018
Brands and retailers often struggle with finding a balance between acquiring new shoppers and retaining shopper loyalty.
On one hand, a loyal customer spends more per shopping trip. In fact, the average basket of an existing customer is 15—25% higher than the average basket of a new customer. Therefore, it is important for brands and retailers to build loyalty among shoppers—especially as competition intensifies and buying opportunities proliferate.
On the other hand, according to Statista, today’s shoppers subscribe to 17 loyalty programs on average. Unfortunately, after signing up for a loyalty program, many shoppers forget about the advantages that initially lured them in and fail to make use of the loyalty program benefits. The ultimate result is that shoppers do not stay loyal, forcing brands and retailers to continually chase after new and lapsed shoppers.
To combat this, some French brands are refocusing their marketing efforts to better communicate the unique and compelling benefits of their loyalty programs to both attract new shoppers and drive more effective usage of the loyalty program among current shoppers.
For example, French distribution company Monoprix has recently simplified its loyalty program to be more enticing. Instead of points, Monoprix will offer discounts credited directly to a shopper’s loyalty card, which they can then spend as they wish. As an additional incentive, Monoprix has also has set up a personalized website for its top 100,000 loyalty card customers. These shoppers will be able to choose three products out of 4,000, on which to receive additional discounts of 10—20%.
To promote this simplified strategy, Monoprix has also begun investing more heavily in marketing its shopper loyalty programs. Previously, its loyalty programs were only communicated in store to trigger impulse purchases. However, Monoprix has begun running numerous national campaigns—including print and TV—to communicate the benefits of its loyalty programs. These out-of-store communications not only help attract new members to the loyalty program, but also help the retailer remain top-of-mind for its current loyalty members.
In more emerging markets, such as France’s highly competitive on-line banking sector, customer acquisition and retention are major hurdles to overcome. In the Fintech marketplace it is not rare for shoppers to receive multiple offers from competing banks with increasingly tempting benefits such as 100€ for opening a new account, no bank fees etc. To retain shoppers after the initial sign-up some banks then require shoppers to use their Bank Card more than fifteen times a year, or sign up for additional bank services such as a saving account or financial advisement.
In a digital world where promotional offers are a part of our daily lives, a loyal customer is more valuable than ever before making loyalty programs particularly important. As brands and retailers face an increasingly competitive market, they must devise creative and strategic solutions to drive both acquisition and retention equally.
Image Source: Pexels
Contributed By:Jeanne Le Barbenchon, Integer Paris