Market unrest, uncertainty, volatility for whatever reason is a call to action not inaction. This action requires a laser focus on loyalty and customer retention. In this current climate of social distancing, retaining your most loyal and profitable customers will be critical to your success. At some point, things will return to “business as usual” and you will want to avoid the cost of having to re-acquire these customers or the incur the risk of losing them altogether.
In this series of articles, we’ll be going over some tactics and strategies to maximize your ability to retain your customer base during and after the crisis. When you’re done, you can always get some more ideas from our recent Customer Retention Strategies for 2020 White Paper.
Customer Loyalty – Enhance your offerings
Your customer loyalty program is going to be one of the key assets you’ll be able to leverage during this time. We say this regularly, but it bears repeating – it’s 5 times more expensive to acquire a new customer as it is to retain your current one. Said another way, if you are able to increase your retention rate by 5%, you will realize a 25%-95% increase in gross margins according to research by Bain and Company.
Enhancing your loyalty program’s offerings are going to be key to retention. Macy’s may be closing stores and eliminating jobs over the next three years, but they’re investing and expanding the offerings of their Star Rewards Loyalty Program.
Calling this new phase of their program Loyalty 3.0, Macy’s doubles down on Loyalty to show how much they value their current customers and how much they’re willing to reinvest in those customers. While higher rewards are tier locked behind a spend and creditwall (loyalty members above Bronze need a subject to approval credit card), even Bronze tier members can still get back 1% on whatever they buy.
When they buy, the Macy’s app (something we recommend combining) allows users to check on their Star Money, their account activity, and more.
If you haven’t taken the time to reinforce your loyalty program, now is your chance to reinvigorate your customer base. And what’s one of the best ways to reach them? By email, of course.
Email – Increase the Frequency of Deliverability
With many people working from home and checking their email for delivery times of household goods, email is probably one of the most important ways for you to stay in front of customers. Why is this important? Well, according to one study, 32% of customers will buy from you again.
If you send weekly emails, you may be able to increase your frequency by doing a modified Permission’s Pass. A permission’s pass is an email that lets you get permission from the recipient that it’s ok to email them. In this scenario, what we’re doing is modifying the permission email to verify if it’s ok to email them more frequently.
Before you send this email out, you’ll want to make sure that you don’t offer them a false choice. Give them the option to stay at the current frequency and to also opt out. This does two great things for your email list.
First, you now know your more hardcore shoppers from your passive list. This gives you a good look into who in your list you can target for higher purchases. Second, this also cleans out your email list of people who are the most likely to send your email to the spam folder. Once you get that permission, focus on reminding your customers via email about the offers they can receive.
Stay Tuned for the Next Article
We’ll be coming out with Part 2 of our series soon. In the meantime, don’t forget to download our Annex Cloud Customer Retention white paper, which goes into more detail on various customer retention strategies (it will also immediately subscribe you to our newsletter). With smart strategies and activities tied to customer retention and loyalty, you will be much better positioned to weather any market uncertainty and come out even stronger than before.