When the pandemic hit in 2020 it was hugely disruptive to retailers. However, as the year drew to a close, it became clear that there were significant winners and losers.
As consumers moved away from the high street, some big brands (most notably Next) moved out of the market or were unable to fulfill a backlog of orders. Naturally, these consumers moved online and even created new audiences, such as the older demographic, who are likely to be major drivers of eCommerce growth in the short to medium-term. In a matter of months, consumer and business adoption of digital vaulted 5 years forward.
As lockdowns were introduced, Direct to Consumer (DTC), online only, and more nimble brands found they unexpectedly acquired a great deal of new customers that had a high lifetime value (LTV). Certain categories, such as home furnishing, gardening, electronics and luxury, saw huge year on year increases - up to 100%, according to IMRG.
While all this unfolded, auction based digital channels became more cost effective as many brands left bidding wars. The net effect is that a lot of businesses have gone into the new year with a much bigger customer base, unsure if they will be able to retain these new customers, or whether their LTV will be similar, worse, or better than their existing customer base.
Epsilon recommends 4 solutions to help brands be successful through 2021.
Concentrate on building a first party data asset
Work to join digital to name-based data assets so you can build a 360 view and stay connected to your customer. With the right data, you’ll notice triggers and signals in the moment your customers’ needs are changing so that you can deliver relevant messages about the next product they’re ready for. Then be able to deliver that message seamlessly across channels.
Increase marketing personalisation
It has been repeatedly proven that consumers want and expect personalisation and that it drives deeper engagement from a customer base. This should be considered through both audience segmentation and creative execution. Even a small segment of 50 is still 50 different people in one messaging group. Knowing and understanding each customer as an individual allows brands to deliver relevant messages during key decision-making moments.
Measure performance against incremental return
Continuously measure and optimise your results, based on your specific business goals and KPIs (such as return on ad spend and cost per acquisition) - not misleading metrics like clicks. Find a partner that allows for this level of insight so that you can make the best use of your budget and create new conversion events above your expected baseline.
Focus on customer loyalty and Loyalty programmes
Successful brands are those who remain connected to their customers with relevant messaging and continued delivery of positive customer experiences. Loyalty marketers have an advantage here – their member have actively given them permission to speak to them. By integrating your loyalty platform with other channels, you can create a persistent view of your customer and create additional incremental return and perhaps even a self-funding data set.
It’s been proven time and time again that it is less expensive to retain a customer than it is to acquire one. With this in mind, it’s important to make sure that newly acquired customer bases continue to engage with the brand over time by providing personalised value to each customer as their needs evolve. For those that disengage, focus specifically on value that would encourage reactivation. This requires building trust and transforming their customer experience to be tailored to each individual by using the right mix of channels, technologies and real-time data.
For more insights about loyalty, read our report about the The 3 pillars of customer loyalty, in partnership with IMRG.