The importance of customer loyalty in retail
Loyal customers are worth more. They spend more money, more frequently and cost about 7-10 times less to keep than it does to acquire a new customer. On average, repeat customers spend over 60% more per transaction than new customers. In other words, nurturing a loyal customer base makes good business sense and should be an integral part of any retailer’s strategy.
“People buy from people they trust. In this age of digital everything, trust matters more than ever” (Etiket).
Customers won’t give away their loyalty for free, however, and in today’s retail environment, the new customer expectation is to exceed expectations. You have to offer a great customer experience, consistently, in-store and online.
It’s hard work, but without it “business as usual” can quickly transform into “out of business.”
The big secret in getting retail right is no secret at all
No one knows this better than Simon Tooley. A lifelong retail veteran, as former VP Operations at Michael Kors he was one of the people responsible for launching Michael Kors in Canada.
A few years ago, Simon quit the world of “big retail” to pursue his dream of launching his own store, Etiket, in the luxury skin care and fragrances segment. Despite launching into a highly competitive segment, dominated by large players like Sephora, his venture has experienced stellar growth.
Etiket has cultivated a significant nationwide following and is now looking to expand its brick and mortar footprint across the country. Simon attributes his success to the loyalty of his customers and the relationships he has built with them.
“People buy from people they trust. In this age of digital everything, trust matters more than ever”, says Simon.
Money can’t buy you love
“Trust is earned, not bought. Though that’s not to say it can’t be measured. The currency of trust is embodying consistent attention to customer needs and expectations throughout the entire retail experience. How your staff engages and deals with them as individuals, shows enthusiasm and knowledge for the products they are selling, provides examples of use cases, processes returns if the product fails to deliver on its promise. Every customer interaction has the potential for you to create impact, from the copy in your communications to the personalized offers you send them.”
Reap what you sow, use the right tools
How many loyal customers your business can count on? Who are the most profitable? How often should we communicate with them? What are their preferences and how do we personalize our interactions with them? Are there opportunities for us to sell them other things?
These are all important questions that many retailers lack the time, data and tools to answer and act on. But with the right tools, even independent retailers without a marketing team, can remain competitive and thrive.
“We’ve done all the hard work – finding unique products, delivering world-class service to our customers and delivering a great experience in-store and online” (Etiket).
For example, Etiket uses a customer loyalty and marketing solution from Thirdshelf that’s fully integrated to LightSpeed Retail. Through Thirdshelf, Simon created a tailored and fully branded rewards program called the “Etiket Insiders Program”. As his customers buy online and in-store, Thirdshelf analyzes their buying behavior and preferences in order to automate personalized marketing that drives more sales. A single recent campaign generated enough sales to pay for Thirdshelf for a whole year – and Etiket runs campaigns all year round through Thirdshelf.
“We’ve done all the hard work – finding unique products, delivering world-class service to our customers and delivering a great experience in-store and online,” says Simon Tooley. “Thirdshelf helps unlock the value of that effort by acting like our marketing department in a box. The rewards program helps us get the right data, the analytics give us the insights we need and the marketing automation makes it easy to act on those insights – all in one place. As a result of putting in the hard work and using the right tools our business is up 70% on same month sales over last year!”
To learn more about how Thirdshelf helps businesses grow customer loyalty, watch the video here.