Retailers who don’t invest in digital will never be able to truly understand or grow their Customer Lifetime Value, says Yoyo CEO Michael Rolph. In this latest Rolphcast episode, Michael looks at retailers like PAUL UK, who are leading the high street charge to better understand their customers, deliver personalised experiences and increase that all important CLV.
With the recent launch of its new mobile payments and loyalty app, PAUL UK has become one of the latest retailers to put digital at the centre of its customer loyalty retention strategy.
The French bakery chain recently decided to completely migrate away from its historical card and email-based loyalty programme – La Carte Noire – towards a full all-singing, all-dancing customer app-led experience.
The app enables a PAUL customer to pay using a mobile device, collect loyalty points and stamps, make in-app purchases, share rewards with friends and receive a fully itemized digital receipt (the app is Powered by Yoyo, so I’d better declare a slight interest here – oh and be sure to download).
PAUL is one of the latest high street names – alongside the likes of SOHO Coffee, Caffè Nero, and Planet Organic – to view digital as an essential, must-have strategy.
From the hundreds, if not thousands of conversations I’ve had with retailers over the years, what really sets these guys apart from the (sadly) vast majority who have yet to go down the same digital path is the importance they place on nurturing and improving their Customer Lifetime Value.
What’s Customer Lifetime Value again?
Customer Lifetime Value is the total sum of money that a retailer makes out of a customer over the entire period of the relationship.
Retailers obviously have a lot of competition in the market, so they’re prime concern is how much of their customer’s spend they can continue to capture (we’ve all heard the: “it’s 5X more expensive to attract a new customer than to keep an existing one” stat).
Let’s say that in the next week I’m likely to spend £100 at Tesco. The supermarket chain will want to ensure that I continue this behaviour with them and spend the same amount the following week – or better yet that I’ve responded to an offer that will lead me to spend £110.
Unfortunately too many retailers, especially on the high street, fail to fully embrace the concept of Customer Lifetime Value, with too much emphasis placed on building generic brand awareness.
Lots of money gets spent on just plastering up posters or pushing out social content that has a logo and talks about the fact that “we sell X”. They’re hope being that because the poster is outside every tube station, there’s the right mix of Google adwords or you’ve spammed Facebook in the right way, the campaign will receive enough eyeballs.
However, the reality is you can never draw a straight line comparison in the physical world between this spend to the money you’re taking in-store – and that’s a huge problem!
This is where digital comes in. A digital customer retention strategy enables you to fully understand Customer Lifetime Value and see the return on investment you make around any marketing activity.
When the likes of PAUL, SOHO Coffee, Caffè Nero or Planet Organic, launches a new digitally-led loyalty experience, they’re not just thinking about an enhanced customer experience, it’s about revolutionizing the entire customer relationship.
These loyalty schemes enable retailers to identify customer behaviour (at Yoyo, we match the identity of both online and in-store customers to the individual items they buy – totally unique FYI) so they have the tools to deliver the most personalised rewards and hyper-targeted marketing campaigns.
Essentially, when you know who your customers are, what they like and what they’re value is, you have the ability to reward them in a more beneficial way to ensure their custom remains with you!
That’s all for this week – until next time, stay classy (FYI I was told this should be the Rolphcast’s new signoff, but I have a funny feeling my team are taking the mick).