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We’ve all heard of this stat: It’s 5X more expensive to attract a new customer than to keep an existing one.
It’s why a customer loyalty strategy and its benefits to a business is viewed as self-evident to the vast majority of retail CMOs.
However, despite the common acceptance that loyalty strategies need to be addressed, KPMG reports that only 24% of retail CEOs go on to consider them as a top 10 priority.
This perceived paradox is actually unsurprising, considering that many business leaders believe the cost of loyalty schemes and customer rewards can impact sales by anything as much as 5 per cent. A huge part of this reluctance to invest, build and sustain a loyalty strategy stems from the fact that you and the powers that be are unable to quantifiably measure whether free rewards, special offers or exclusive discounts have resulted in or is the reason why a customer makes a return visit.
Essentially, your loyalty strategy needs to show that your customers are spending more, more often.
And in the words of the world’s most famous management consultant, Peter Drucker:
In this How To Guide, we’ll break down what retail CMOs can do to create a loyalty strategy that measurably reveals business impact and sales uplift to their leadership team.
As our reliance on smartphones to run our daily lives increases, the retail journey is no longer confined to one place – consumers can now shop on the go, anywhere at any time.
This requires retailers to deliver experience-enhancing products, whether fast payment, automated loyalty, rewards, delivery, ordering or fully-itemised digital receipts, via mobile, regardless of whether a consumer is shopping in-store or online.
And when it comes to measuring customer loyalty, a mobile-led experience has the ability to transform the checkout into an engine that extracts enhanced actionable data insight from the point-of-sale.
At Yoyo, we’re able to gather unique, granular payment data from the point-of-sale that reveals exactly where, when and what a customer buys – whether it’s from a physical or online store.
This granular transaction data becomes the foundational basis of a retail CMO’s ability to track and analyse ongoing purchase behaviour and, more crucially, measure whether this behaviour translates into a loyal customer.
The ability to identify when, where and what your customer buys opens up a whole host of data points that reveal actual loyalty behaviours in real-time, including:Combined, and with the right machine-learning, these data points provide retail CMOs with the most accurate Customer Lifetime Value (CLV) metric – the holy grail and centre of any successful loyalty strategy.
CLV is what predicts the total sum of money that a retailer makes out of a customer over the period of their relationship.
You can find out more about how Yoyo is able to calculate the most accurate CLV metric for retailers here.
You may now have a variety of customer data metrics at your disposal that reveal individual purchase and loyalty behaviours, but like oil, this data is only useful once it’s been refined into something tangible.
This is why you’ll need a CRM that can track, analyse and predict the purchase and loyalty behaviours of customers based on the stage of their customer journey.
At Yoyo, our Payment CRM breaks these journey stages into five categories, all of which require a separate approach in terms of loyalty / rewards / marketing engagement:
You can find out more about how Yoyo is able to identify customer behaviour, while ensuring data is fully anonymised and secure, here:
You now have a full picture of how your customers like to engage with you, and you can track what stage they are at throughout their journey with your brand.
Now it’s time to put this insight into campaign action.
First you’ll need a CRM that can dynamically segment customers based on these transaction-based data points, which will enable you to specifically target and/or drive a desired behaviour.
For example, you may wish to target a new product range at your Power Customers or incentivise Slipping Away customers with a special offer.
Yoyo’s Payment CRM platform not only does the above, but also includes a Campaign Builder that enables you to easily create and send automated rewards and marketing campaigns that specifically target your dynamically segmented customer groups through a variety of channels (In-app messaging / push notification etc).
Yoyo’s Payments CRM ensures you have a clear view of how your loyalty / marketing campaign performs through AI-led technology that compares revenue, visit and trigger metrics against customers who do and don’t convert to a sale.
The total number of customers exposed to your campaign, whether in-app, push notification, email, etc
The number of times your campaign was activated.
The total number of individual customers who triggered your campaign.
The percentage of customers who were exposed to and triggered your campaign.
Compares the number of new customers before and during your campaign.
Compares the total number of transactions (customer visits) before and during your campaign.
Compares the total amount that customers, who took part in your campaign, spent before and during your campaign.
Customer Spending Behaviour
Assesses whether your campaign has had a positive or negative effect on your customers’ average spend.
The total amount spent by customers on campaign-qualifying transactions.
Compares basket revenues that met campaign conditions before and during the campaign.
By following these five steps, retail marketing teams can make better decisions, spend their budgets more effectively, target the right customers with the right messages, and measure the impact of campaigns more effectively.
Here’s how it’s working for just a few of Yoyo’s retail partners: