In today’s economy, retention of customers is the foremost goal among businesses. And building customer loyalty has become the top priority – especially when a five percent increase in customer retention can potentially augment revenue by more than 100 percent. In fact, in a recent report by the Aberdeen Group, 100 retail organizations were surveyed to determine the top challenge of customer loyalty. The answer may surprise you.
The top challenge? The inability to capture relevant customer data, which means that personalizing offers and determining the preferences of customers, has become a difficult task. The finding is quite ironic, actually. Most businesses in the retail channel frequently employ numerous tools for attracting and retaining a customer base. These can range from coupons and loyalty programs, to special events and clearance sales. But all of these concepts become stagnant if the data captured from these tools is ignored or deleted.
Customer data is extremely important. It provides a snapshot of an individual customer’s personality:
This information is just some of the customer data that can be generated from a single marketing campaign and put to use to personalize future offers based on a customer’s preference. Capturing this data can be accomplished by infusing some marketing strategy before sending out any promotions.
For example: A coupon seems like a simple vehicle for generating business. But in actuality, it can provide you with more customer data than you realize.
Addresses and Locations: You may already know a customer’s address, but marketing pieces that are sent to the wrong location and returned to you allow you to revise your mailing lists. Also, by tracking the name and address of the coupon user, you can deduce which local area responded better to your promotion.
Preferences: Did you overestimate the response to your coupon? It could be that your customers are more interested in other items and services that you provide. And, the customers that did respond to your promotion? Track that data, as you know those individuals will be receptive to similar promotions in the future.
Formats: Direct mail or e-mail are the top choices for distributing promotional messages. Per the response to your coupon, you can find out which your customers prefer. And, based on your demographic, you could even expand your promotions into mobile communications or advertising space – depending on a customer’s marketing medium preferences.
We know that the customer relationship doesn’t end when you process a coupon. All of the data generated from marketing promotions should transform your campaign strategy as you update CRM information, refine your future campaigns based on business intelligence from past promotions and track response rates to your message with innovative reporting tools. Whether you are using your own CRM system or some of the robust list/contact management tools that SproutLoud offers, make sure you spend time keeping this data current – and useful. The value of the data generated by your promotions will have more potential value than any marketing piece you can send.
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I couldn’t have said it better myself
.I am also an example of a customer that makes purchasing decisions based on businesses using customer data. For example, Best Buy sends me coupons on my birthday as well as holidays. They also send me exclusive deals for being a member of their reward zone program. I have to say that their strategy is successful because I usually take advantage of these “special occasion” deals.
Another way to increase retention and loyalty is to have some kind of membership program that customers can enroll in (Best Buy Reward Zone, Amazon Prime, Office Depot Worklife rewards). These types of programs offers incentives and other perks for shopping and of course this will increase the possibility of customers spending to get these perks and rewards.
In short, I agree that having accurate data on customers will definitely increase loyalty and retention.