Answer: Loyalty!
Regardless of the type of commerce you engage in, B2B or B2C or both, and whether you are online exclusively or omni-channel, something you can’t live without in 2021 are strategies and tactics aimed at maximizing customer retention and loyalty.
There are a lot of uncertainties in the world today, but the one thing we all know is that keeping existing customers is vital to the growth and sustainability of your business. For years we have read and heard the adage, it’s cheaper to keep a customer than to find new ones and this simple statement has never more true than in today turbulent business environment.
This time last year, where we were citing reasons retention is important like the Bain stat that says increase retention 5% and you’ll increase profits by 75%. This year poses four additional reasons to connect and stay connected at a new level with your customers, which reinforces why you really can’t pass on your loyalty strategy in 2021.
- Economic uncertainty and recessionary times
- Consumers demands (and needs) for genuine communications and real connectivity
- A far greater number of choices, especially in the eCommerce space
- Saying goodbye to cookies and other 3rd party data approaches
Economic Uncertainty Drives a Need to Focus on Customer Retention
When times get tough, money gets tight. People spend less and make more critical decisions as to where they do spend. In 2008, many organizations made conscience decisions to shift their limited marketing dollars to retention efforts. Those that did fared far better through and post recession period than those who kept spending consistent or slowed spend all together.
With limited resources, consumers are more concerned about making a purchase mistake. They tend to be less likely to try new things. With limited cash in hand, consumers tend to make the familiar choice, the trusted choice and the smart choice that has served them well in the past. If a consumer or business is a customer of yours, you want to be that familiar, trusted, and smart choice.
But to ensure your customers come back to you, you need to connect with them on a consistent basis. You need to reinforce the value you bring to their business. You need to remind them of the positive experiences they’ve had in doing business with you and reinforce those experiences at each touch point. You need to establish a personalized ongoing relationship of mutual value.
Consumers Need Genuine Communication and Real Connectivity
Fast forward 10 years, 2018 as consumers began to raise the bar on their expectations of the organizations where they do business. It was no longer okay to just personalize with my name in an email. Or offer up product selections based on the items they purchased. Consumers know they are sharing their data. They’re expecting organizations to be diligent stewards of their data and use the data to deliver a more relevant customer experience.
Additionally, people today are more focused on what they feel is important – doing good, giving back, sustainability, equality, etc. They expect organizations they patronize to share the same concerns and values they embrace. A few years ago consumers were asking brands to “know me, understand me, inspire me.” Today consumer’s expectations go further to “walk with me, walk in my shoes.”
To top it off, we experienced a year unlike any other in recent history which placed us in lockdown from which we are only now slowly emerging. People are focused more than ever on what’s important to them. They’re making more and more conscience choices based on their values. The right loyalty strategies and programs allow organizations to create a clear, unique, personal, even empathic value exchange with customers.
The Field of Available Choices Has Grown Much Broader
Changes that the COVID virus created in the global business sphere include a rapid expansion of online commerce with many new merchants opening online stores and a transformation in brick-and- mortar commerce with many brick-and-mortar merchants going online and offering new ways of shopping and pickup (BOPIS). With such a rapid expansion in available choices for consumers and businesses wishing to shop and buy online, companies must give strong credence to development and implementation of loyalty strategies and tactics since now more than ever it is essential to retain customers once you get them.
Bye Bye Cookies
As marketers, we’ve grown accustomed to building out our marketing strategies based on 3rd party data and technology tricks like cookies to identify customers and prospects and deliver personalized experiences based on these inferences. We’ve built our tech stacks and our analytics around look-alike models and personas. We’ve invested in CDPs that can get us to 70-75% accuracy in matching data. These activities have been working fairly well for organizations.
Now, all of this is changing. The stringent privacy laws to protect consumers and their data are finally coming to fruition. They are finally here. Organizations are now being forced to play by new rules. These new rules are affecting the technologies we’ve grown accustomed to using. A great example of these changes – cookies are going away.
With the dawning GDPR, CCPA – now morphing to a much more stringent CPRA, mean organizations will need to move from reliance on 3rd party data, to going directly to the source – your customer – for information. Organizations will be forced to work directly with customers to collect their information and gain permission to use their data in marketing efforts.
For many organizations, this means a whole new way of marketing and potentially a number of new technologies. The good news – loyalty technology is built on the foundation of permissible value exchange. These 4 major environmental changes point to the need to research and select the right technology partners to develop, integrate and implement your online eCommerce environment and to guide you through loyalty as a core solution and strategy you must have to be successful in 2021 and beyond.
Kadro, a certified Magento Solutions Partner with 20 years experience, is here to help make your vision for selling online a reality. We help clients, large and small, in a wide array of industries create full-feature, high-functioning, eCommerce environments on the Magento Commerce platform and then integrate those environments with applicable ERP, OMS, PIM, CRM and other backend systems. You can learn more by visiting the Kadro website. Also follow us on popular social media channels like LinkedIn, Facebook and Twitter.
And to ensure you are successful in your loyalty strategy, the Annex Cloud Loyalty Experience Platform is the perfect answer. With roots in the social space, Annex Cloud is the only solution that can track, understand and communicate with your customer with a personalized, empathic message at every touch point. Plus with our extensive integration and partner network, the launch process is swift ensuring you can make an impact in 2021.
This article was co-authored by Erin Raese, CMO – Annex Cloud