Ever since the rise of the internet, customer loyalty has been decreasing steadily. Consumers are savvier than ever before, shopping around to find a cheaper, quicker and more convenient deal with just a few clicks of a mouse or taps of a smartphone. The flipside of this online world is that smart businesses now have access to the kind of data that allows them to understand their customers better than ever before, to give them exactly what they want, when they want it. But what does that mean for offline businesses – how can they really compete?
The internet is filled with statistics on customer loyalty, but it is a well-known fact that it is easier to sell to an existing customer than it is to acquire a new customer. With new prospects there is a lot of ‘heavy lifting’ (wonderful business cliché) and wastage, whereas regular, longer term customers will not only spend more, but are also generally easier to serve. Previous customers know your processes and what to expect from their previous experience, and if they are coming back then crucially they may also recommend you to others.
Third party recommendations, or ‘word of mouth’ marketing is one of the most powerful forms of marketing you can use, and with the whole world now connected online, reviews and recommendations are more influential than ever. It may be as close to free as you get in the world of marketing, but it can also be dangerous. People are much more likely to bad mouth something and tell more people their tale of woe than actually recommend, which may sound scary, but it is simply reinforces another reason to not only keep current customers happy but also go the extra mile to offer a service that stands out from the crowd.
The online world is benefiting from online reviews, recommendations and smart data use, but it may seem tricky for offline businesses to build such strong customer relationships. Well, if you focus on what an offline relationship really means, what can make your business stand out is the interaction with your customers in person, rather than via computer, smart phone or tablet. In the online world, interaction with real human beings is increasingly scarce, but people still like to buy from people, and a human connection can be a powerful thing.
Connecting with your customers is so important. Just as online businesses are using data to target and customise messages and offers to individuals, offline retailers and service providers now need to make their customers feel important and show that they are valued as individuals. It is not an easy thing to do, but focusing on having well-trained, positive staff is the first step to giving customers a good experience. But good service doesn’t have to stop at polite smiles, there are also numerous ways you can collect offline customer data to enable you to offer the kind of truly outstanding, personalised service that people will talk about. And collecting data doesn’t have to be invasive – if you’re offering something that will genuinely make their experience nicer or easier, customers will generally be willing to share.
Many of our customers have told us that they have found offering regular special events can allow them to target and focus on certain segments of their customer base in the offline world. Of course there is a certain element of investment needed here to get campaigns off the ground, but it will prove worthwhile if your customers do engage as it will differentiate you from the competition, build loyalty and even create the kind of word-of-mouth that will bring in new customers that fit the demographic profile.
Ultimately, loyalty is the name of the game. In the retail and hospitality space, many businesses offer loyalty schemes and these are highly popular with customers – just look how the high street pharmacy chain, Boots, has managed to build offline relationships with thousands of customers via the Boots Advantage Card.
Of course implementing a loyalty scheme the size of the Boots Advantage Card is a complex and expensive challenge, but we are seeing more and more types of loyalty programs in the market that are viable for businesses of all sizes. Offline retailers should look to loyalty platform options that integrate with their point-of-sale system. This allows offline customers to be recognised and rewarded at the point at which they first interact with your business, so you can start building a long-term relationship, adding value to them as individuals, building loyalty and creating a powerful human connection.
By Oliver Rowbory, co-founder of The Good Till Co.