Retail’s Future: Price Comparison Via Smartphone Apps
Aug 16th
The following excerpt is from the article Retail’s Future: Price Comparison Via Smartphone Apps written by Eric Zeman for InformationWeek.com
Brick-and-mortar retail businesses are under assault from smartphones. New data from Yankee Group shows that a growing number of smartphone users are taking advantage of mobile shopping applications to see where they can get the best deal.
According to Yankee, 46% of shoppers are using mobile apps when they cruise retail aisles. This figure is up about 5% since 2010. Half of the 46%–or one-quarter of shoppers–buy a less expensive product elsewhere once they’ve compared prices and availability.
Mobile has become a “fundamental part of the shopping experience,” says Yankee. More than half of consumers–54%–have downloaded at least one type of mobile shopping application, and about 24% of consumers believe mobile shopping apps are “essential.”
Consumers with higher incomes have been faster to adopt price-comparing apps and use them to buy from different stores or request that the brick-and-mortar location in which they are shopping match what they find on their phone. Of those making more than $200,000 in annual household income, 83% are likely to purchase the product online instead. That’s damaging to retailers.
“Our survey is a wakeup call–this adds up to millions in potential lost revenue for brick-and-mortars,” said Sheryl Kingstone, Yankee Group research director and author of the report.
“Retailers must embrace mobile beyond price comparison and target consumers who are not solely driven by price,” said Kingstone. “Engaging mobile consumers with tools such as inventory availability, real-time personalized offers, personal shoppers, and self-checkout will make the difference between retail success and failure in the new mobile economy.”
Allowing consumers to tap into inventory and other pertinent data could be a huge benefit to traditional retailers. The “immediacy factor” of being able to make purchases instantly, or the same day, can be a powerful motivational factor for brick-and-mortars that they should use to their advantage.
Don’t lose out on potential revenue! Take control of your sales by placing your store’s pricing and inventory information in the palm of students’ hands with your own branded mobile app! Available for both iPhone and Android devices, On The Go places relevant information directly in the hands of your customer base.
Seamlessly integrated with inSite, the app pulls data from your e-commerce page so that students can look up buyback prices, compare textbook prices, and search for general books and merchandise. Because it’s fully customizable, you can even brand the app by customizing it with your name, colors and logo!
Watch a demo then talk to your MBS Representative about how a mobile app can keep your store stay ahead of the game.
How to Use Facebook’s New Post Targeting Options
Aug 15th
The following article, Facebook’s New Post Targeting Options Launching Soon, Learn How To Use Them Now, was written by Chad Wittman for SocialFresh.com.
Facebook recently announced a new targeting option for page admins trying to reach particular segments of their audience. With the new Facebook targeting options, admins will soon be able to target a variety of options such as:
- age new
- gender new
- interested in new
- relationship status new
- language
- education new
- workplace new
- location (country, state, city)
These new targeted segments open up a whole new array of options for marketers trying to pin point their brand’s message.
Typically with brand new features on Facebook, comes new opportunities for early adopters. Understanding why Facebook has created new targeting options and what they may do with them in the future, can help you expand your reach once this feature is rolled out to all audiences.
It will look like this:
Image Credit: SocialFresh.com
Why is Facebook Adding Additional Targeting Options?
In my opinion, Facebook is adding additional targeting options for two reasons: decrease a barrier of entry for creating an ad unit and help admins increase reach. By allowing admins the ability to target their update right from the Timeline, they can quickly Promote the post and pay to reach their desired audience. For organic content, admins will be able to restructure the content and target it in optimal ways.
How To Use Targeting To Increase Reach
Let’s create a hypothetical situation to help explain how a brand can increase their Reach using the new targeting options. We’ll use a chocolate company such as Dove Chocolate on Valentine’s Day for our hypothetical situation. Dove has approximately 1 million fans of their page with a diverse audience. Previously (before advanced targeting options), Dove Chocolate made a widely appealing Valentine’s Day post:
Image Credit: SocialFresh.com
This Valentine’s Day post attempted to Reach their entire audience but most likely only reached a small percentage. However, this upcoming Valentine’s Day, Dove will have an opportunity to expand the Reach of this post without Promoting it.
Here’s how they would do it:
- Identify Demographic Information Within Facebook Insights
- Select Demographics To Be Targeted
- Craft Content To Target Audience
This Valentine’s Day, Dove has a new opportunity to target their content for each selected segment. For each brand, the amount of segments will differ depending on their fan demographics, this should be determined by the admin and the brand’s strategy.
Dove would target the following segments:
- Young Single Women
- Young Single Men
- Young Married Women
- Young Married Men
- Old Married Women
- Old Married Men
The work for the admin has now sextupled, as they now have to create (or modify) content to each of our targeted segments. Here are some sample posts:
Young Single Women
“Love yourself first and everything else falls into line. You really have to love yourself to get anything done in this world” - Lucille Ball
Young Single Men
Give a special woman in your life a box of chocolates this Valentine’s Day.
Young Married Women
Hint: Your husband loves chocolate on Valentine’s Day too.
Young Married Men
Now that she’s your wife, doesn’t change her love for chocolate. Happy Valentine’s Day!
Old Married Women
Chocolate you love is best enjoyed with someone you love.
Old Married Men
Reminder: Today is Valentine’s Day. Another Reminder: Your wife loves dark chocolate.
Each of the above posts should be targeted to the corresponding segmented audience. By custom tailoring both the message and targeting of the posts, you’ll have a higher opportunity of engaging your fans. Engaging more fans and publishing more relevant content will increase the Reach for your content.
For the advanced admins, they’ll analyze when each demographic is online to view the posts, then publish the posts at the optimal times of day for each segmented audience.
A Note To Small Brands
For the millions of small brands marketing on Facebook, the targeting options will be less impactful. Facebook requires certain levels of fans in order to be able to target a particular demographic.
However, there will still be value in the targeting as you’ll be able to target broad segments such as gender or age.
The brands that have millions of fans will most likely be able to use a variety targeting options to fine tune their targeted audience. Large brands often suffer in the news feed due to the diversity of their fans and fan acquisition methods. Segmenting may begin a process of Reaching these hard to reach fans.
Otero Jr. College Bookstore Fuels Sales with Gas Card Promotion
Aug 14th
College stores are all about meeting student needs. But, how can you truly know what they want unless you ask? Debby Nicholson, textbook manager at Otero Junior College Bookstore, is a big believer in this concept. In fact that’s exactly how her store stumbled across an idea that had students speeding to the bookstore!
“Students regularly stop in to talk and I happened to ask one in particular ‘what would you like to see in the store that I don’t have?’” she explained. “She told me that she’d love to see us carry gas cards, because it’s a major expense to those who commute, like she does.”
Nicholson immediately jumped on the idea and presented it to her boss, who wholeheartedly agreed.
“We’re all about making life easier for our students, so if there’s a way that we can help, we’ll do it,” she said. “He told me to check into how to make it happen, so I began exploring our options.”
Her search led her to a local Phillips 66 station, where management was just as excited about the idea as she was.
“They were very receptive,” she described. “We worked out a way that we could carry the cards in the store by allowing our customers to purchase them on their student accounts.”
The promotion allowed students to purchase a $50 gas card from the bookstore for $55. Although the price was higher, students were willing to pay extra for the luxury of putting the expense on their account.
“We have students commuting from towns as far as 75 miles away,” explained Nicholson. “Many of them rely on financial aid to attend school, and they don’t have money for extra expenses, including gas. Once their tuition and bookstore expenses clear, they are allotted the remaining amount on a debit card; this allows them to use that extra money to their benefit.”
The store set parameters on the program from the start. For instance, students can only charge to their account for up to three weeks after the start of school. Additionally, they are limited to purchasing 4 gas cards per week.
Although they didn’t heavily advertise the option at first, students shared the new offering by word-of-mouth and soon began flocking to the store.
“I bought 100 gas cards to start and 2 days later I had to get 100 more!” she said. “The response has been absolutely phenomenal!”
On average, Nicholson now sells about 100 per week at the beginning of the school year, driving new traffic to the store. Overall, she is thrilled with the results of the promotion.
“It’s definitely a win-win for both the students and our store. They come in to get a gas card and end up seeing new merchandise that they like, too, which has been great for sales,” she added. “It’s turned out better than we could have imagined, and we’re looking forward to continuing it in the future!”
How to Overcome Online Retailers’ Rental Programs
Aug 13th
Amazon.com Inc. announced the launch of a new print textbook rental program last week. With such a significant retailer entering the rental game, it is more important than ever for college stores to offer the option to students.
Although the program will present competition, there are several strategies that your store can use to draw attention to the upfront savings offered right on campus! Consider some of the ideas below to promote your own rental option:
- Shed light on shipping costs: The program sends the print copies to students for a fee. Your program doesn’t include shipping costs, so make sure students understand that they need to factor that cost into the total price of a textbook. Create advertisements that bring this fact to light or use some of ours to spread the word.
- Promote price comparison: Transparency is key! Don’t just tell students that you have competitive prices, show them! Send a press release to the campus newspaper or local media letting them know all the ways you help students save money, stressing your price comparison site. Post this image to your social media sites or website, too, directing students to your price comparison site. Don’t have price comparison? Talk to your MBS Representative for information on how we can help!
- Advertise the advantages: Your store offers several benefits over online retailers so make sure students know about them! If your store accepts student financial aid, start there; that’s one aspect the competition will never be able to overcome! Plus, you’re on campus, so you’re the most convenient option. Remind students how quick and easy it is to both purchase textbooks as well as to return them if they drop a class.
- Teach the importance of textbook reservation: If students reserve their textbooks, then you’re more likely to gain all of their business. Promote your program early, especially to the incoming class. Consider enhancing the benefits of your program with a dorm delivery service or percentage discount on students who bundle all their books.
- Add incentives: Make students an offer they can’t refuse! Encourage them to buy or rent at your store with extra incentives. For instance, you could promote rentals by awarding a designated amount of loyalty points for each title rented at the store. Or, reward students who spend over a designated amount on textbooks with a giftcard, coupon, or branded merchandise. Everyone loves free stuff and a little extra can go a long way!
Students want upfront savings and the competition is providing them. If your store isn’t offering rental, now is the time! MBS Rental offers the best guarantee in the industry, no limitations, no hassle, and no restrictions. You can submit your rental title lists up until the first day of class. Plus, you can submit your lists as many times as needed! Learn more about our program by contacting Lillian Howard, MBS corporate marketing representative, to find out how we can help you stay ahead of the competition!
Consumers Prefer Bonuses Over Discounts
Aug 10th
The following article, It doesn’t add up, but shoppers are suckers for bonuses, was written by Preet Banerjee for The Globe and Mail. View the article.
A recent study in The Journal of Marketing shows that “buy one, get one free” promotions are more enticing to shoppers than, say, a 50-per-cent discount on a single item, even if that shopper doesn’t need two of what’s being promoted in the first place. In other words, bonuses are more attractive to shoppers than sales, even if they don’t equal a better deal.
Why? Apparently, we’re bad at simple math. Or just too lazy to do it.
Here is an example: A litre of water normally sells for $1, but if there is a promotion to drive sales, consumers would prefer to get 1.5 litres for $1, instead of a 33-per-cent discount in price. The extra 500 millilitres is a 50-per-cent bonus, which results in a new unit price of 67 cents a litre. On the other hand, a 33-per-cent discount on a $1 item means that item now costs 67 cents, and since we’re still talking about 1 litre, the unit price is the same at 67 cents a litre. But the researchers found that in a case like this, offering a bonus generated a 73-per-cent increase in the amount of product sold, compared with offering a discount.
The effect is so strong that even if you made the discount more advantageous than the amount of the bonus, consumers still preferred the bonus.
The fact that this research appears in a marketing journal, and that the results are so telling, could mean the age of discounts is coming to an end. If a company can move more product and increase profits by offering bonuses instead, why wouldn’t it? Especially since we, the consumer, are apparently not likely to blink an eye.
Most people don’t shop using unit-prices as our guide. I don’t browse grocery store aisles with a calculator in hand, and I doubt you do either.
In fact, a lot of people don’t even realize that many stores display unit pricing in (very) small type on shelf labels (look for the price, then look a bit harder for the unit price). You can compare two products of different quantities to see which is cheaper on a per-unit basis, and there’s no math required. Yet few people actually pay attention to them. The next time you grocery shop, make a point of seeking them out – you might be surprised just how much more you pay for brand names compared with generic.
For instance, one brand name shaving cream retails at $2.99 for a 311-gram can, or 96 cents per 100 grams. A generic brand from the same store retails at $1.97 for 275 grams, or 72 cents per 100 grams. If you need 311 grams of shaving cream every two months, the total yearly cost would be $17.94 for the brand name, and $13.37 for the generic. That’s a 25-per-cent savings. If you are disciplined about figuring out unit prices, the savings can quickly add up to hundreds of dollars a year.
If companies increasingly turn to bonuses rather than discounts to entice shoppers, it still pays to be able to parse the price, and see just what kind of deal you’re getting.
What kinds of promotions have your store found to be most successful? Share your responses in the comments section!
The Hidden Facebook Page Feature That’s Key to Getting Your Content Seen
Aug 9th
The following article was written by Steph Parker, community manager at brand conversation agency, Neiman, for SocialFresh.com.
By now, using Facebook Insights to gauge your page’s health is commonplace. But, relying solely on how many fans your page has, and how many likes your posts get can only tell you so much.
As a social media manager, you’re essentially in a relationship with your page. As a good mate, you have to know what your counterpart likes. You also have to know what they don’t like, and how you can turn those negatives into positives. It’s easier than it sounds, I promise.
Uncovering Negative Feedback on Facebook
Anyone familiar with Facebook Insights has probably exported data into spreadsheets before, at both a post level, and a page level. A little gem called “negative feedback” stats are available on both. And the ones reported at a post level are the most helpful for tightening up your messaging.
In case you haven’t, go to the “Insights” section of your admin dashboard. From there, click “Export” and select “Post level data”, as well as the dates you’d like to analyze. Once you click “Download,” you’ll have your spreadsheet.
Image Credit: SocialFresh.com
Within the “Key Metrics” tab, you’ll see two things: Lifetime Negative Feedback Users, and Lifetime Negative Feedback from Users. Pay attention to the first, since it’s a unique number. The goal in this case is to see how many fans aren’t feeling your messaging.
Here, negative feedback refers to the amount of times a fan has hidden your post, or marked it as spam. You can see what specifically your fans are doing by checking out the “Lifetime Negative Feedback Users” and “Lifetime Negative Feedback from Users” tabs. Especially important is how many people are choosing to hide all of your posts based on just one – that’s the most dangerous.
Image Credit: SocialFresh.com
If no one has hidden a post or marked it as spam, consider that your positive feedback.
For example, one client of mine used to post links to a monthly sales flier, as well as content about the things you could do with the items in the flier. We noticed that the links to the flier were constantly hidden by fans, whereas the informational “how to use this” posts were not. To make a long story short, we stopped posting flier links, and noticed a jump in likes, shares, and comments on our other commentary.
Analyzing Your Work
Ideally, you’re saturating your page with equal amounts of each content area. Say you’re a pet food brand that usually posts about pet health, things to do with your pet, and the health benefits of your product. You want to make sure you’re balancing the amount of content from each area, or else your page might fall flat.
If you’re not balancing your content, it could explain why certain post types are being hidden more than others. In general, you should adjust your content when you notice the following patterns:
- Content about the same subject is hidden more frequently than content about other subjects
- Posts that don’t receive many likes, comments, or shares are hidden more frequently than other posts
- The same post-type is hidden more often than other post-types (i.e. your links posts are hidden constantly, whereas your photo posts are not)
Don’t forget to compare negative feedback to your interactions (likes, shares, comments, or answers) to paint a more complete picture. It’s nearly impossible to please everyone all the time, and chances are, most or all of your posts will receive negative feedback. Your fans are all individuals who have different preferences.
Calculate Your True Negative Feedback Percentage
To see what percentage of people exposed to your post gave it some type of negative feedback, divide the number of people who gave a specific post negative feedback by its lifetime reach, which you’ll find on the “Key Metrics” tab of your exported post-level data. This will help you figure out which posts may have been less successful than others.
Why look at reach instead of impressions? Because reach is an organic number, whereas impressions is not. One person can see a post multiple times, but it won’t change how they feel about it (most of the time).
Where Do We Go From Here?
Incorporating analytics about negative feedback may seem daunting at first, but they’re an important piece of a more thorough report, so don’t stop there!
You know your community best, and managing one is part art, and part science. Using negative feedback as a component of your overall work can strengthen it, but don’t lose sight of your goals, initiatives, and purpose for being on Facebook in the first place.
The Hippocratic Oath of Customer Experience
Aug 8th
The following article was written by Sheridan Orr, managing partner of the Interrobang! Agency, a consulting firm specializing in brand experiences, and published on RetailCustomerExperience.com.
For thousands of years, physicians have been taking the Hippocratic Oath to “first do no harm.” This philosophy is also excellent advice for anyone dealing with customers rather than patients.
I come from a long line of shoppers—perhaps that is why I am so passionate about retail. When I was growing up my mother, grandmother and great grandmother would drag me off for marathon shopping trips each Saturday.
We would frequent stores where the clerks all knew my grandmothers. They would set aside things that might possibly interest them. They knew their names, sizes, tastes and those of my other family members. Contrast that with my experience this Saturday morning.
The Experience
I had a simple list. Pick up a book club selection, find wrapping paper and a card for a gift, and a cake for a cookout. Fairly simple stuff—or so you’d think.
First, I went to a bookstore. In the spirit of transparency, I love my Kindle and have not purchased a physical book in a while. However, Catcher in the Rye isn’t available digitally and that’s this month’s selection. Therefore, the bookstore had a perfect opportunity to “recover me” as a loyal customer. Instead, to be blunt, they pissed me off.
How did they do that?
Clerk: Do you have a discount card?
Me: (in good mood) Yes, but not with me. Can you look it up?
Clerk: What’s your phone number?
Me: 919-xxx-xxxx. That may not be the right number. We’ve moved and switched phones. Not sure which number I signed up with.
Clerk: That isn’t your number.
Me: Can you look it up by my name?
Clerk: Not here. You have to go to customer service. Do you want to buy a new card for $25.
Me: You mean I have to get out of line to go find my number?
Clerk: Yep. (glares at me)
Me: Why would I buy a new card when I already have one?
Clerk: Clearly you don’t know your phone number.
Me: (giant WTF stare and then I look at the line of people who I don’t want to make wait) Just ring it up.
Me to my husband as we leave: This is why I love Amazon.
So the store has systems that don’t talk to one another. Instead of trying to help me get my number, they try to sell me something I already have. Moreover, I’m the perfect customer for them. Books are a priority in my family. Yet, they seem to be trying to get rid of me.
Next, I head downtown for my other items. There is a stationery store by the bakery and I pop in for the wrapping paper and a card. I can’t help but think the store smells strange—kind of like a litter box. As I’m looking at my husband oddly, a giant Ewok of a cat rubs against my leg. I’m in a panic as I’m highly allergic to cats.
I race to the door knowing my afternoon is ruined because I’ll be in a Benadryl induced stupor. The clerk looks at me strangely as I bolt out almost knocking over a display. Over my shoulder, I call out “Sorry. Allergic to cats.” I’m already wheezing as we make our way to the bakery.
When we enter the bakery, the experience is completely different. The pastries are beautifully arranged. There are samples that the clerks are happily sharing with other customers. The cakes are so delicious that the customers are selling them to one another.
I ask a clerk which one she’d recommend for a summer cook out. Eagerly, she describes the strawberry amaretto in butter cream. I’m sold! Carefully, she packages it up for me.
Then she asks me “Have you thought about what you are going to do for your sister’s shower?” I instantly order yet another cake. I don’t feel upsold. I feel relief. And guess what? I can’t wait to come back. I feel a bit of that joy of those Saturdays spent shopping with the women of my family.
Contrast that with how I feel about the other two stores. I’m not going back to a store that wants me to do all of the work and them to just take my money. I’m definitely not going to the cathouse. In fact, as my eyes swell shut, I reach for my phone to add a tip on Foursquare, “AVOID if you are allergic to cats.”
First Do No Harm
When you are crafting a customer experience, you need to seriously consider if your processes, procedures or choices cause your customers pain.
For instance, up to 30 percent of the population has a cat allergy. On what planet does it make sense to alienate that many potential customers?
Why would you train your staff to try to sell someone a new discount card before you try to look up their old one? Or even worse, why would you implement a system that doesn’t allow for multiple ways to look up customer data?
Things to Consider
When you are creating user journeys or customer experiences, make sure you look for any places you may cause the customer pain. Some things to consider are:
- Are you doing anything that could potentially alienate customers (is your store accessible, clean, dander-free?)?
- Can customers easily find things?
- Do you have procedures that make the customer do the work?
- Are you selling at the right time? (not when the customer has a need that you are not resolving)
- Is your staff adequately trained on how you wish them to engage with the customer?
- Do you have adequate feedback loops so complaints can be addressed before they become big issues?
- Are you monitoring social media for “customer pain?”
- Do you shop your stores anonymously to see what the experience is like?
Like physicians, retailers need to ask themselves if what they are doing causes damage to your customer and the relationship you want to have with them. It is difficult for anyone to go from pissed off to delighted in one experience.
Therefore, you should be vigilant in looking for things that may potentially do harm. While there are not lives at stake, the viability of your business may be. My husband and I are already taking bets on how long the cat stationery shop will be in business. Anyone want to take a long position?
Instagram Contest Idea for College Stores
Aug 7th
The following article, Instagram: Killer App for Retailers?, was written by Maeghan Ouimet for Inc.com. The article offers an excellent example of how college stores could use the popular photo app, Instagram, to connect with their customers and promote online or in-store apparel sales. Take a look:
You can already crowdsource funding and new product ideas for your company. Why not tap the masses for a little marketing and photography help, too?
According to a report by Mashable, clothing company Free People has asked customers to provide photographs of themselves wearing the brand’s products. It’s a win-win for the company: Free People gets a little free marketing from its most enthusiastic fans and it gets a bunch of product shots that may help shoppers get a better idea of how an item will fit.
Social photo crowdsourcing start-up Olapic is helping on the back end, curating the customers’ photos from Instagram and Twitter and incorporating them onto the retailer’s product pages.
“Lots of e-commerce customers end up not buying a product because they’re not sure how the product is going to fit after they make the purchase,” José de Cabo, cofounder of Olapic, told Mashable. “It also shows they have a super hip, engaged customer base.”
Free People, an extension of the retail brand Urban Outfitters, launched the photo-sharing project Thursday, with a focus on its denim products. The company hopes to expand the live photo sharing throughout the site.
When customers purchase a denim product they will also receive a card with a hashtag on it. They are encouraged to Instagram or Tweet a picture of the product with the hashtag. The photo will also appear on a live stream at the #MyFPDenim gallery on the Free People site.
“Our #MyFPDenim gallery is a way for customers to share their passion for the brand and to highlight their personal style,” Jed Paulson, director of e-commerce and marketing for Free People, said in a press release. “We wanted to have one central gallery to see all of the unique ways our customers wear our product, as well as to allow them to interact with each other.”
How does your store use Instagram to interact with customers? Share your experiences in the comments section.
We Want to Feature You in Our Digital Foreword!
Aug 6th
October is just around corner and that means it’s almost time for Symposium! Now that registration is open, and you’ve seen all that we have planned for this year’s event, we want to know:
What are you most excited for at Symposium 2012?
Whether it’s a specific traning session or the baseball-themed BBQ, simply let us know why you’re looking forward to it and you could be featured in the upcoming digital edition of our Foreword publication! It’s your Symposium, so don’t miss out on the chance to give us your input!
Send us your response via social media on our Facebook or Twitter page or email SSchaefer@MBSbooks.com.
Marketing Strategies To Increase Customer Loyalty
Aug 3rd
The following article was written by Joe Custer, president and CEO of Young America Corp, for ChiefMarketer.com.
Loyalty is a lot like love. They both come from creating a positive emotional connection with a person (or brand) through a series of positive interactions or transactions that build affinity and become habitual over time. So why is it so hard to get it right?
Marketers and retailers should focus their attention on integrating three core marketing strategies to increase customer loyalty. Marketers that operate programs integrating these approaches will see measurable increases in their rewards program enrollment—and a better lifetime value from their customers:
- Limited-Time-Only Promotions: Get customers in the store with an effective promotional strategy (acquisition).
- Rewards for Purchase:Incentivize customers to repeat store visits and increase average order value (growth).
- Points-Based Rewards Program:Enroll customers in a simple points-based retention/rewards program that builds tangible value (retention)
Limited-Time-Only Promotions
Marketers continue to test various pricing promotion strategies, most notably the everyday-low-price policies. Some believe this is more effective than other pricing strategies because “studies show” that customers “want it simple and want it now.” Customers are motivated to purchase when they believe the promotional price is temporary (limited time only) and are unsure when they might see that product discounted in the future. Limited-time-only promotions do work, but they won’t build a long-time bond.
Rewards for Purchase
In a recent test, one retailer compared a reward-for-purchase promotion with an instant-discount-at-the-register promotion. The reward-for-purchase scheme resulted in 14% lift.
The promotion strategy was initially intended to increase store traffic by having the reward-for-purchase offer redeemed at the same retailer. This strategy resulted in one to two incremental store visits within 30 to 45 days of the initial purchase, as compared to zero under the instant discount promotion offered at the register. And, it gets better.
The additional store visits led to an incremental 14% in revenue over the initial purchase (compared to 0% in the instant promotion), with 4 percentage points representing additional out-of-pocket funds from the consumer. The remaining 10 percentage points were initially funded by the retailer to the customer as a Reward for Purchase and then spent back at the retailer at full value. Interestingly, more than 50% of the rewards were spent back at the retailer within 60 days of the initial purchase. So, why wouldn’t retailers bolster their promotional budgets if the funds are spent back at the retailer and drive additional customer out-of-pocket over the course of two to three transactions?
Points-Based Rewards Program:
This strategy was also intended to generate two to three additional point-of-sale transactions, which allowed the retailer to enroll customers in its retention/rewards program and increase program stickiness. Rewards programs tend to increase stickiness when there is increased transaction frequency and recency.
Data collected in the additional POS interactions can be used to:
- Analyze customer data to create specific offers targeted to these newly acquired customers. The additional offers may increase product attachment or cross-category success to drive brand affinity or loyalty.
- Build predictive models to determine the customer profile of individuals likely to accept “limited-time-only” promotions and increase one-to-one marketing efforts to other targeted customers who fit the model’s profile, but who may shop with a competitor.
So why is it so hard to earn a customer’s loyalty? Attention spans are shorter, patience is running thinner, and the competition is visible today more than ever.
Building a loyal customer base starts with acquiring the right customers from the start. Your chances of building a good relationship are greater from the outset because there are common interests. The key to long-term success lies in demonstrating value to the customer and building on the foundation established with a properly integrated engagement strategy.
MBS Systems Loyalty module makes establishing this connection with customers easy. Find out how it can increase your store’s retention rates by talking with your MBS Representative!
