The rise of CRM as a critical component to the Customer Experience is accelerating. As Customer Service in the past, the quality of retailers 'Loyalty Programs has become one of the unavoidable criteria Customers use to evaluate their preferred shops. Looking at the financial weight of loyalty – from sales and margin contribution to rising customers’ acquisition costs – retailers are now paying a serious attention to the CRM experience they are proposing to their Loyal Shoppers. As this case study demonstrates, each additional effort can have measurable impacts.
Our Client’s Loyalty sales’ contribution were slowly but regularly sliding down, while non-loyalty sales were displaying an aggressive growth, boosted by the post-Covid period. The Team has challenges identifying the causes at the origin of this progressive decline. Taking into account the importance of Loyalty Sales in terms of basket size, shopping frequency and margin contribution, it had become a priority to identify the causes and find their remedy
With the Client’s Marketing and CRM Team, we started a simple approach to do some measurements to identify in which areas the pains were located. Some of the first interesting measurements was that the Loyalty sales decline was not impacting customers whose Loyalty was over 24 months old. While there were no outstanding growth trends in their purchase behaviors, there was rather a level of steadiness. But these numbers changed drastically when we started to focus on new members, despite the regular recruitment campaigns they were running both online and in their stores.
2indicators were in the red:
· The time between the first purchase and the second purchase of new members
· The evolution of the shopping frequency (both online and online) of newly recruited members
Building on these numbers, the Team realized that there was no established on boardingfor new customers. In case some major Loyalty events were taking place right after new customers’ enrolment, these new customers were happy. And not happy if nothing was happening. With the Marketing and CRM Teams, we started to build a simple onboarding program, whose steps frequencies were articulated on the shopping behaviors we identified. Our client therefore has decided to take a few standardized actions to improve their New Loyal Customer Experience
Great: a simple sThank you message for becoming a member. In our case, the client decided to adda purchase coupon as a sign of gratitude.
Recognize: another Thank you note for the 1st shopping trip after enrollment, along with a program of the upcoming events
Investigate: In case the newly enrolled customers didn’t have any purchase after 2 standard buying cycle, a note with a question about potential challenges, a hotline number
Keep in touch: sending regular emails to their existing Loyal Customers, letting them know about new products, upcoming promotions, or special offers.
Learning More: what products Loyal Customers have purchased or not purchased. This information help to know what Loyal Customers want and what additional products they might be interested in. Our Client can better tailor an offer on a product and organize Targeted Campaign. Personalized service can improve customer satisfaction and increase their Retailer brand loyalty.
After 3 Months
· New enrolled Customers reduced by 21 Days the frequency between their first purchase and their second purchase.
· Existing Loyal Customers increased their number of visits to 3.5 times per month (+18%) and spend on average + 25%
· Overall Total Loyalty Sales increased by18%
To keep this very positive trend through better Customer experience, our client ensured that their Loyal Customers would receive a special offer linked to their purchase behaviors every 30 days.
There is no perfect Onboarding program, and the important point is to have one, firmly established and executed. The ROI of such a policy is based on several factors:
· Emotional: customers feel recognized and valued instead of ignored
· Financial: it accelerates the following sales and impact Customer Lifetime Value
· Commercial: each step of the funnel can be measured and improved
On our side, we were of course happy to see that our CRM solution for retailers, Ulys(*), was helping create the right value to our client and help strengthen their Loyal Customers experience.
(*) Ulys CRM is a proprietary Shopper Analytics that helps retailers measure, understand, and engage Shoppers.
Contact us to learn more how Ulys CRM can help you improve your campaign efficiency.