Although customer experience has become the new model to boosting customer loyalty, consumer data is still the key.
In a retail environment influx, the need to retain existing customers is more important than ever. Studies show it costs between five and 25 times as much to acquire a new customer, than it does to retain an existing one. Whilst retaining a small percentage of your customers is known to boost profits by a much greater proportion, retailers need to focus on enhancing their customer experience in new and competitive ways to retain customers.
The sixth annual loyalty research study For Love or Money 2018 highlighted a decline in desire for loyalty cards, but a willingness for consumers to give up their data in exchange for an enhanced experience. The study indicated over 50% were okay with giving up their data if it would enhance their shopping experience and 46% said they would be mostly likely to do so if it would provide personalised offers and benefits.
The study also found 44% of respondents were okay with giving up their data if location-based offers were sent to them and 41% were happy for them to use their data for re-purchase reminders. In the study, the identified areas for improvement revolved around moving away from the monetary incentives and providing more surprise and delight moments as well as innovative rewards.
Gone are the days where a ‘thank you for shopping with us’ email is considered quality service. Today, retailers must navigate a much more complex network of online and offline touch points to meet the demands required to garner loyalty from customers.
Adyen’s recent Australian Retail Payments Guide shows 65% of shoppers say that a personalised in-store offer is likely to make them spend more, while 66% say it would make them more likely to recommend a brand to friends and family.
Good examples of this kind of elevated customer experience can be found within a few major retail brands. Nike recently identified an opportunity to cater to their demographic and revamped some of its flagship stores, turning them into state-of-the-art basketball courts.
Online apparel brand Bonobos continues to offer coffee, beer and fashion advice to all in-store shoppers. While, home and cosmetics brand Rituals are delivering an experience reminiscent of a trip to a spa, with sounds and smells designed to excite the senses.
These days, shoppers simply expect more. They expect to feel like VIPs and for their needs to be anticipated. Yet many retailers still miss the opportunity to use data they’re already generating to show how they understand customer priorities. The time is now to rethink loyalty programs and treat data as the powerful asset it is.
For retailers looking into ways to keep their customers coming back, payments data can offer valuable insights to increase traditional loyalty initiatives. Taking advantage of payments data represents a significant opportunity in the current retail environment, allowing businesses to understand consumer behaviours and what drives profitability and what doesn’t.
Consider it high quality, fresh and complete behavioural data that can enable far more personalised and targeted customer experiences. If data is the oil and customer experience is the machine, driving loyalty is the big outcome.
Retail giants like Amazon utilise payments data very well. The international company integrates payments data, browsing history and social data to construct precise profiles of their shoppers. These profiles in turn lend themselves to hyper-personalised communications, tailored offers, products and content that specifically cater to the consumer’s needs and interests.
Armed with context of your customers’ preferences online, a shop assistant has a richer knowledge bank to tap into and can offer more tailored in-store conversations. Personal touch points like this can go a long way.
Contemporary customer experiences can’t be mass produced. In the modern economy, consumers crave personalised interaction. Payments data can be a retailer’s greatest tool yet remains one of the more underutilised assets. It’s time loyalty was looked at from a new perspective, harnessing the power of payments data to deliver high quality and complete behavioural data that unlocks personalised and targeted customer experiences.
Michel van Aalten is the Country Manager of Australia and New Zealand for Adyen, a leading payments technology company that provides businesses with a single global platform to accept payments anywhere in the world. Working with retailers across Europe, the US and APAC, Michel has extensive experience in the global payments industry and has helped many leading omni-channel retailers roll out payments in new markets around the world. Learn more at Adyen.com