Will AI replace traditional loyalty programs?
The face of customer loyalty is changing constantly with the increasing cut-throat competition between companies. There are a hell lot of retail options available to customers. So what makes a person choose one over another? And there comes the most basic customer retention techniques- rewards for their loyalty. They have made themselves as Loyalty Rewards Company – a give-away reward to retain their customers. But is it the future? Do customers really want to be engaged in this way only?
The future is Artificial Intelligence. AI will help in gaining a foothold in this very competitive environment. AI consists of speech recognition, natural language understanding for creating better intelligent assistants. They will help customers with accessing information and completing tasks. AI will result in better business processes and customer orientation. The urge is there from customer side to make it more personalized and nothing can do it better with Machine Learning, which is a part of AI. Companies like Nectar are leveraging upon the technology giving their customers more personalized offers and they are very successful. As more customers use their Loyalty Rewards Programs and other digital channels, the better the machine learns about what is relevant for them. Customers are more likely to shop with retailers that deliver more personalized experiences.
Machine learning will totally eliminate the guessing work, it uses the data & analytics to provide the most likely predictions. Loyalty Reward Management programs basically will be utilizing the customer’s prior behavior on certain set of rules. For example, AI facilitates virtual assistants that can monitor the customers on the basis of their engagement in good behavior and then they could be rewarded for it. This reward would lead to more loyal behavior, and all of this will be done without any human interference. Further, this will significantly reduce the marketing cost since they would be targeting only the most relevant customers.
In the very future only, machine learning and AI would be touching every industry and customer loyalty is no different. A Loyalty program company which will use AI and Machine learning will no longer have different teams working on different campaigns for designing and managing offers schemes and discounts for their customers. So, with the help of Machine learning, they would not have to push 200 offers to everyone, but to push 20 offers for 20 type of audience which would have a higher conversion rate with low cost.
Also, the ability to deliver real-time personalized offers based on the ever-learning algorithms will completely replace the traditional loyalty programs. AI will disrupt business functions in nearly every industry. Different loyalty rewards companies are heading towards adopting this technology for better retention of their customers.
Millennials as customers and how to gain their loyalty
It is the age of the millennials — also commonly known as the Gen Y. This savvy generation not only comprises smart customers, but also include decision makers in top firms. Holding the largest share in the consumer marketplace, they have taken it hands on to change the rules of how brands engage and conduct their customer-experience design. It’s both easy and difficult to gain millennials’ loyalty. But the job is half-done once their tech-savvy psyche is grasped!
- Customer-facing technology can’t be slow or complicated
Millennials have always embraced and aligned themselves with technology. So a user experience that is not friendly, simple, fast and advanced, is generally frowned upon by consumers. Companies should be careful not to present an obsolete process or a complicated system to consumers that will keep them away.
- Smartphones have been the norm for millenials
Millennials are used to getting everything immediately and experiencing everything in real time. The queries need to be attended to as soon as possible and in an authentic language; otherwise, the customer moves on to someone else who understands him/her more.
- Purchasing, for millennials, is a social experience
Engaging on social media is a part of everyday life for millennials. Often, these posts concern their consumption activities, their next purchase or what they might be looking for. This greatly affects businesses — as the opinion and review of one consumer could influence another.
- Millennials seek an authentic and engaging experience
Which is why the company website should include a FAQ page — how to go about making a purchase, detailed repercussions of what could go wrong, or any sort of guidance. This can be done either through articles or videos — where customers can discover quick-fix methods and find instant solution to all their problems.
- Interference or help from customer care is considered tedious
This means that they are self-reliant too and do not need customer-care executives getting in the way, just to mess up their whole experience. More often than not, they would prefer self service.
- Surprisingly, they also want to co-exist
They’re open to new experiences and want to associate with the brand more than with just a transaction. To speak plainly, millennials are adventurous and seek the same from the brand. For example, a cause supported by a favourite company would also be supported by the loyal customers.
The bottom line is that — nothing with the millennials can be taken for granted. The skeptical approach of the previous generations also needs to be done away with. They move fast, like to experiment and are prone to changing loyalties only after one bad experience. It would also be good to know what the target audience is, in order for customer service to be innovative, seamless and top-notch on the whole.
The Future of Loyalty Programs
The success of an idea depends on how adaptable it is to the current needs of the system. The ability to amend brand strategies is the key to longevity irrespective of the industry, including the wide domain of customer loyalty. In recent surveys, a massive 65% of the CMO council agreed upon the significance of investing in loyalty strategies. A sudden heat is expected in the arena of loyalty, sooner rather than later. A brief study of the Future Loyalty programs in the following section suggests that the coming times will be of huge significance and the right investments might ensure a smooth systematic function.
The future, in case of loyalty programs, is set to drift away from pushing marketing strategies on customers, onto a more promising approach of making the experience a little easier for the customer. With an approach as simple as deploying loyalty program to make customers’ lives easier, or providing an exclusive loyalty program that rewards via a customisable experience based on individual customers’ needs, the future has taken a turn for good. Retailers, who hope to succeed, must possess the content, a strategy and insightful ideas that can be seeded in conversation with customers to figure out their needs and compliment them in a more suitable manner.
A trend of feedback loops with personalisation and targeting engines is set to present itself to the market. The power of a positive review will dominate the centre stage – retailers and brands will be pushing to engage in conversations, allowing them to progressively learn and develop an unrivalled experience for their customers. Loyalty programs that contextualise all relevant data points shall emerge as victors– delivering push marketing messages and lucrative offers to drive customers into the stores or onto the e-commerce platforms is not going to be enough. Successful retailers and brands must know and comprehend what their customers tend to and analyse the data to fuel targeted conversations that enable the loyal customers to open up about their experiences. Negative criticism is set to trend with a strong, reassuring vibe attached to it.
Loyalty programs, if aimed for huge success, need to continue to support an overall experience of the brand, and should be designed with customers, taking in consideration the minutest of details. The retailers and brands need to embrace the need of the hour; they need to give up control. The real power of loyalty is to enable customers to voice an opinion; loyalty programs will increasingly align themselves to the customer experience side of businesses and emerge as a channel for developing connections with loyal customers on a personal level.
The future of loyalty programs needs a retailer or a brand to enable a broader range of interaction with their customers. Personalisation and customisation, are therefore the keys to ensure the right elements of customer experience are delivered to the loyal customers. They generate a high value of engagement and equally, retailers need to create opportunities through their loyalty programs for customers to engage with their interests.
Loyalty programs have the ability to connect the dots of data from across the multichannel experiences and recognise the areas to be emphasized upon. Mining the data to create these opportunities to strengthen and improve one’s service is an invaluable and relatively untapped resource for retailers. With such advancements and a rising need to acquire the customer base, the future of loyalty programs, it seems, is infinitely bright and headed towards a remarkable journey.
Top 5 Things Not to Do in Your Employee Rewards Program
Employee rewards programs sound like something we can all benefit from, based of some known facts: generic rewards aren’t entirely effective, whereas the ones tailored to compliment the company can have a significant impact. Custom employee rewards contribute significantly to boost the engagement and company culture. Upon due consideration, we must realise the fact that implementing a rewards program isn’t always a step forward to success, unless it’s done the right way. Following this statement, is a list of the top five things not to do when designing a detailed employee rewards program:
- Turning a blind eye to the history: One must never design a rewards program without an in depth knowledge and a detailed insight into the company’s past history with rewards. Finances are always to be kept in check; the tangible rewards mustn’t be finalised without identifying the appropriate behaviours to be rewarded. Rewards can be misused and misdirected; behaviours can’t always be changed without social reinforcement. Make wise decisions because reward programs tend to take the wrong direction, a consequence of an unplanned beginning.
- Basing KPI’s on biased assumptions: Presuming that one knows what behaviours should be rewarded to produce the desired business growth, can be a reason for an unsuccessful rewards program. Observe, learn, converse, and connect with the employees to identify the behaviours that need addressing. Basing KPI’s on assumptions leaves a scope for biased opinions, which in turn, leads to undesired growth factors.
- Ignoring the objective metrics: Know the objectives of your rewards program and figure out a way to measure them. A common mistake occurs when only the subjective measures of effectiveness are considered, ignoring the objective metrics. Rewarding the wrong behaviour is never recommended. Remember, what you reward is what you’ll receive.
- Undermining the feedbacks: Rewards program tend to flourish when they incorporate employee and manager input. The job isn’t done yet, with rewarding; it requires taking feedbacks to find out if the reward makes an impact. Ask the recipients for a scope of improvement and apply the principles learned to design better the next time.
- Underestimating the significance of recognition: Individuals who earn the rewards for their exceptional performances must know the specific reason for the recognition. A meaningful, sincere recognition encourages a positive behaviour in the future. Don’t restrict the rewards program to a mere transaction; it can be a great step forward to build personal relationships.
Appreciation is a fundamental need for humans to work with some motivation. Employees respond to appreciation because it is a reassurance of the value of their work. When recognised in a proper way, the productivity is set to increase, for there is a motivation to keep up the good work. Hence, an employee rewards program requires a lot of planning and organisation, to work in an unperturbed fashion; keeping in mind the foremost things to avoid. A well planned ERP can act like a catalyst, and give cause to an exponentially rising upsurge in the business charts of a company.
10 Epic Ways To Reward Your Employees
Don’t Break the Bank – Inexpensive Employee Rewards Programs
Certificate of achievement: Honor the employee how acquires a unique acknowledgment, give him or her an extraordinary nametag and also a certificate that articulates their achievement.
Thank you meeting: A sincere word of thanks costs nothing and is very effective. Saying thanks about something specific may be the ultimate reward. The words “thank you” are powerful. And sometimes all you need to do is to say it sincerely.
Wall of Fame: Create a wall of fame for each recognized employee. Make a point to compose underneath their photo what they did that you’re remembering them for.
Company apparel: Offering employees free company apparel and other logo merchandise can be one of the simple employee rewards programs.
Recognition in front of peers: Feature your representatives accomplishments by recognizing them in an organization meeting, bulletin or on your organization Intranet site.
Department recognition bulletin board: Consistently a designated bulletin board highlights their duties regarding the affiliation, the individual employees, their most noticeable achievements, etc.
Secret Santa-style appreciation: Use the “Secret Santa” concept. Have all employees draw a name of another employee. They would then identify an achievement/contribution particular to that person and send an anonymous note of appreciation.
Work-from-home day: Remember significant events in your employees’ personal lives, and give them a work-from-home day so they can participate without worrying about coming into the office on time.
Sticky Notes: Post a sticky note on their monitor, expressing profound gratitude and saying why. Simple, yet compelling, when it’s authentic.
Standing O: Get all your employees together in the same room. Then welcome the employee you’re recognizing and give him or her an overwhelming applause.
The Morphing Trophy: Get a big trophy and give it to the employee you are recognizing for the week. At the end of the week, they must return the trophy but they need to add one thing to it. Then next week give it to the next winner. At the end of the year, you’ll have a trophy with 52 things stuck to it. It looks crazy and has lots of memories. At the end of the year, retire the trophy and put it in your reception area. Do it every year.
So which one are you trying out for your team?
Got a Marketing Challenge at Hand?
Digital rewards in today’s world
Brands have been utilizing loyalty and rewards program within their customer community to keep their customers happy and well away from competition. From loyalty cards, discount coupons to scratch & win offers, brands have been using rewards as an incentive to create a customer base and also keep them loyal to the brand.
In the new digital age, such rewards have been upgraded. Digital rewards are the new ‘in’ thing that bring many advantages to both the customer and the brand. From making it easier for the customers to get their rewards to spreading the word about a brand, digital rewards have given the marketplace a new tool to expand brand reach and loyalty.
Digital rewards are both diverse and abundant. These are a few up-and-coming rewards that are catching the eye of the marketers:
eGifts
According to a study by Mercator Advisory Group, it was found that in 2015 most of the money spent on gift cards was redeemed as eGifts. With the heavy increase in digital buying, it makes more sense for brands to motivate customers through eGifts.
Moreover, brands can also use eGifts to rewards employees to acknowledge their hard work on projects or commemorate special occasions. This builds the confidence in the employees and helps with brand loyalty.
Coupons and codes
With greater numbers opting for online buying, it makes sense for brands to give their offers and discounts in the virtual world. Coupons and codes that are sent exclusively to loyal customers makes them feel special and helps retain them.
Mobile wallets
Incentives like cash backs and discounts, mobile wallets have taken online marketing by storm. Creating a niche where customers are incentivised for their buying behaviour has only increased the appeal of mobile wallets.
Benefits of digital rewards program
Increases the brand’s value
The power of digital rewards is that it gives the customer a sense of empowerment. With every amount they save or a prize they win, it helps build an image of a brand that it is not in business for the profits. It builds the image of a brand that genuinely cares about its customers.
Provides the customers with more choices
The brand gives the customers the option of choosing the kind of rewards they want. Either it would be as loyalty points that can be redeemed for discounts or gifts or in the form of promotional codes that are given to an exclusive customer community.
Customised rewards
Each reward program is made around the customer, their preferences, previous encounters with the brand and their redemption history. This makes the program more relevant and useful to the customer.
Instant gratification
Unlike the days when one had to send a letter to a brand with a token to get a gift, the digital rewards program helps both brands and customers get instant rewards. As soon as a customer provides a preferred action (like, tweet), the customer is provided with their reward. It needs less effort from the customer too.
Get rewarded anytime, anywhere
There is no limit to the application of digital rewards. People can be rewarded just by signing up for a newsletter and this can be done from anywhere. Because of the high mobility of the digital market, people can redeem their rewards just about anywhere.
Brings positive interaction between brand and customer
Everybody likes free gifts. Digital rewards help people collect more rewards doing what they do the most nowadays – being a part of the social media sphere. Reward programs also help in spreading the news about a brand since people share the newest offers with their friends and family.
Incentive to be a loyal customer
With the reward point application, people tend to stay loyal customers to get greater rewards over time. But the rewards need to be good enough to keep the customers interested.
Helps engage on the social media
Facebook and Twitter are where most of a brand’s customer base is situated. Potential customers also reside in the digital sphere. Having current customers talk about a brand on their social media helps in increasing exposure and value. Digital rewards do just that by giving customers freebies when they engage with the brand on social media.
Cost-effective
The cost of setting up a digital rewards platform takes less money than the traditional card-based loyalty programs. It is also easier for customers to check-up on their points and look for other offers that are available.
As can be seen, ‘digital rewards’ is the new mantra to creating a brand identity that is more personal and effective.
With RewardPort programs, your brand gets higher visibility among its customers.
Omni channel engagement for small and mid-size companies
A recent study showed that customers are 58 percent more likely to tell others about their experience with a brand than they would have done five years ago. One important outlet for this exchange is the social sphere which gives consumers and businesses the opportunity to reach lots of people.
As the taste of consumers align with new market contexts, businesses must look for applicable ways to engage them beyond building traditional relationships. Most customers expect their vendors to engage with them through digital channels. Interestingly, it is not just one channel but an Omni channel approach. This includes the social media, the web, email and other channels.
Small and Mid-size companies must take advantage of these new outlets to drive their brand. The technological and demographic changes that are sweeping across the economic landscape have changed the playing field. Most customers prefer having their questions or problems resolved without needing to talk with a customer service agent. Furthermore, customers want to engage with a brand on their own terms; either through human interaction or a digital channel. Small and Mid-size organizations that do not offer multiple engagement channels may sabotage their relationship with their customers or remain at a competitive disadvantage.
It is important to have a portfolio of services that connect with your customers when and where they want. The Human and digital channels of interaction must be properly optimized. Every business can get a virtual receptionist team which can double as a virtual assistant. They would screen and transfer calls to a representative of a small business based on agreed schedules. Beyond the administrative functions of this team, they can process orders, make outbound calls, answer customer service questions and schedule appointments.
Another important platform is to run an effective digital engagement system. A good digital platform allows your customers to be educated on your business and product offers, amplify the sales process, resolve service issues, connect with prospects, answer customer questions and so much more.
When your Omni channel platform gives an outstanding experience to your customers, they ultimately become your brand advocates. It is essential to buttress the fact that great customer service occurs on multiple fronts. There is no leading brand that can retain a large share of the market by using one channel to reach its audience. Customers need a relevant, compelling and consistent service to remain loyal to a brand. When your business has many advocates pushing its case in the market, it creates a positive impact on your bottom-line.
On the long run, one positive customer experience reduces the number of service inquiries that you get. The customers who are loyal to your brand begin to share their good times with others. The place of good customer service goes beyond the one on one relationship you share with your customers. It is important to entrench your brand and connect with your market through the multiple channels that are available. With a careful forecast, investment and plan, any business can be able to position their brand as leaders with a viable Omni channel framework.
Effective Promotional Marketing
There is one Marketing question that always begs a detailed answer – What is the right way to go about planning a product promotion activity? It’s easier asked than answered. Over the many years that we have been working with Marketing divisions across Industry types, we have actually drawn up a list of 10 important issues that Managers must consider while planning a Promotion. While they may not be in Chronological order, each point jostles for attention. This is an attempt to assist the Marketing manager build a template for every promo; remember every promo needs the same amount of consideration before an idea is finalized.
1. Identify the role of incentivization
Providing added value to customers by making available an “incentive” instantly influences purchase. If the customer is convinced that he is getting more than the value he is spending on the product, it will persuade him further to make the purchase. The strategy lies in convincing the customer that he will not only receive the worth of his rupee but also supplementary benefits. These incentives may be in the form of free samples, gifts, discount coupons, demonstrations, shows, contests etc. All these measures motivate the customers to buy more and thus, it increases sales of the product. The promotion must be able to change the perceived value or price of the product or service.
2.Communicate with your consumer – offline & online.
Social media, smart-phones and the Internet are the buzzwords of marketing of the future. The customer is becoming more and more technology-friendly and accustomed to the ways of approaching products through these media. By making product promotions accessible via such media, the customers are significantly encouraged to utilize the benefits offered to them. Not only do these media influence the behavior of the customers, it is the swiftest and most effective way of reaching out to your befitting target-audience.
3. Collect, manage & nurture data.
Sales promotions are not only effective in the acquisition of new customers but also in the retention of your existing customer-base. It is essential to recognize the significance cultivating a relationship with your existing customer-base. In-order to develop and nurture relationships, it is important to firstly collect and create powerful databases. Secondly, they must be managed to eliminate unusable data in order to effectively target the usable database. The customers must be made to feel their value in the company in order to extract long term loyalty.
4. Be relevant
Sales Promotions must not only be relevant to the type of product being sold but must also suit the needs of the target-audience. If the customers are able to relate to the promotion being offered are able to comprehend it effortlessly, then the chances of the promotion resulting into a sale are higher. The sales promotion must also be able to hit the consumer at a particular behavioral stage.
5. Make sure to Customize and localize
The promotions offered must be customized to suit the requirements of the customer with regards to their demographics and psychographics. The promotions must be also be designed according to the attitude & behavior of the target-audience. They must be able to provide instant gratification on a temporary basis in-order to convince the customer to take immediate and simplistic action to achieve results of the offer.
6. Clarify objective and provide tangible benefit.
The customer will only be convinced to make the purchase of the product if they feel the value they are receiving is more than the amount they are spending. The customers must be able to measure the added value they receive along with the purchase. By offering clear objectives of the promotion, the brand is able to foster a trustworthy relationship with the customer – which is key in terms of long-term loyalty benefits.
7. Maintain timing, duration and frequency
Sales Promotions if introduced at a appropriate time can yield greater results. India is a very time driven economy; festivals, occasions and seasons are great influencers in the consumer’s purchase decisions. The promotions must be able to provide the customers with instant gratification over a temporary period and must not be repeated too often, as the customers will then be unable to differentiate the added value of these offers in comparison to the original product.
8. Engage your customer
The customer wants to be felt important and appreciated; and if the brand recognizes this need of the consumer and nurtures it, they can witness groundbreaking results. The brand must endeavor to involve the customer in promotional activities as much as possible. Any activity that engages the customer to interact with the brand – for instance contests, sweepstakes or coupons will instantly appeal to the customer’s psyche and induce a sense of association and bonding with your product.
9. Integrate sales promotion with the communication strategy
Sales promotion is an aspect of a promotional mix that includes –advertising, personal selling, direct marketing and public relations. While sales promotion is an effective tool itself, it must be used in accordance and relation to the other tools of the marketing strategy as well. Once the promotions are complemented by the other elements of the promotional mix, the efficiency of this tool will automatically be intensified.
10. Integrate sales promotions with social media
Sales Promotions must be run on social media such as _ Facebook, Twitter, Foursquare. Linkedin and Pinterest. Sufficient word of mouth is generated via social media that not only increases awareness but also heightens reach of the promotions. Integration with social media immensely intensifies the effectiveness of the campaign. The reach of social media must not be overlooked and must be used effectively to create viral effect.
10 Mistakes to Avoid in Sales Promotion
Numbers never lie and if numbers are to be believed, take a look at following industry figures of impact of sales promotions:
- Total Reach Value: 90%
- Total Recall Value: 89%
- Positive Impression On Customer: 52%
The relevance, reach and impact of meticulously planned sales promotion on customer behavior is unsurpassable; which inversely also means that if your sales promotion is not planned well, it could negatively affect your brand and business with equal values!
So, how would you ensure a flawless sales promotion plan that affirmatively reaches and affects as many people as possible? Here are the common mistakes that you should avoid to maximize the impact and minimize the remorse:
1. Thinking Single Channel
Sales promotions can elevate the sales and profits dramatically in a short time. To fetch optimum outcomes of the sales promotion activity that took much of your hard work and huge capital, it is necessary that you utilize all the channels of promotion available to you. The current advancement of print and digital media offers a beautiful amalgamation to explore infinite opportunities to boost your sales and brand value. When your consumers see you everywhere, they get inured to your brand and you gain their acceptance. Do not keep it only online (which may be fine if you are an online company) or only print promotion. Integrate all the channels ingeniously to stand ahead the crowd.
2. Not Setting A Goal Or Deadline
Launching a sales promotion program without fixed deadline or measurable goal will lead it to whole big null point. Set a start date and end date to streamline your efforts to complet everything within the stipulated time frame. This will help keeping each component of the program in track. By setting up goals, you will always have a figure in hand to achieve and to measure the success of the campaign.
3. Fixing On Presumptions
Don’t presume customer’s behavior. Never plan your sales promotions assuming that the segment you have created defines your real or limited customer base. It is very much possible that a profitable share of customers in high concentration is in the segment you do not tap your sales promotions for. Study your data patterns well to have a diverse profitability.
4. Not Solving It For Each Stakeholder
While planning your sales promotion program keep in mind how would it impact each of your stakeholder or retailers or any other patron associated to your organization. You may launch a promotional plan that attracts new customers with some special offer or benefit but would it be fair for your regular and loyal customer who may not have that benefit? Take each stakeholder into your consideration for an overall successful sales promotion program.
5. Making It Too Complex
Keeping your sales promotion plan simple makes it easy for you as well as your customers. Your customers will feel more connected and involve when the processes are simple without much complicated terms and conditions. With a simple sales promotion activity, capturing, handling and processing the data for result analysis and profit calculation gets extremely easy and effective. So, do not unnecessarily complicate things.
6. Not Keeping It Relevant
Relevancy is the essential most factor of any sales promotion program for its success and positive outcomes. Relevant program helps you in targeting your right customers and communicate with them for awareness and sales. Relevancy of the sales promotion plan also ensures that your customers are reminded about your brand or product with full intensity.
7. Communication Gap with yourTeam
For successful promotional plan, it is imperative to involve and inform all those part of your value chain that includes your team members, distributors, retailers about your plan. This provides the required thrust to pull it to an extended level for broader effect and profit.
8. Not Testing Your Assets
This is a very common mistake that is easiest to avoid. It doesn’t take much to test all your assets that you plan to consume within your promotional program to be active, available and useful. For example, you may roll on an email campaign with a broken link due to lack of adequate testing. This is a sheer waste. Avoid it.
9. Not Capturing The Data
Without capturing the data appropriately, it is impossible to measure the effectiveness and successfulness of any activity. Capture the data to realize if your plan has delivered what you expected. Capturing the data can also benefit you to apprehend new market segments and opportunities that you never thought of before.
10. Not Using The Captured Data
This is the biggest mistake companies commonly get trapped into. Before planning the next sales promotion plan, it pays largely to dig in the previously captured data to concentrate upon profitable segments along with exploring new dimensions for unconfined growth.
For a short word, make your sales promotion plan to attract new customers while also encouraging your brand power and loyal customers effectively.
These are a few common mistakes you need to be aware to ensure a flawless sales promotion. You should do everything possible to learn whatever you can about the complexities and nuances of your industry or profession–and not just once, but regularly. By knowing the potential bottom-line of impact of your sales promotion, you’ll have the information to invest the energy necessary to host a strong flawless sales promotion that will deliver boosting results over the time period it covers.
Got a Marketing Challenge at Hand?
How Brick-And-Mortar Retailers Can Beat Ecommerce Price Advantage
The online ecommerce juggernaut may seem invincible, but players like Flipkart, Snapdeal, or Amazon have a major Achilles heel. Research shows that exceptional customer service is the number one factor influencing how much a consumer trusts a company, and 75% of consumerssay they have done business with a company because of positive customer service experienced in the past and the experience with buying process
Retailers hoping to fight online giants will have plenty of ammunition at their disposal if they use this insight to up their in-store game. Brick-and-mortar retailers can counter razor-thin margins offered by ecommerce sites through superior customer service. But first, they have to listen to what shoppers need and want, and use this data to propel their customers beyond the lone factor of low prices.
Here are 6 strategies that may help conventional brick and mortar store owners compete with ecommerce sites:
Know your customer:
It is now more important than ever for retailers to take a genuine effort in understanding their customers. I’d suggest that you initiate programs that help you know your buyer and his preferences. Some effective ideas include capturing customer data through CRM practices, a loyalty program, social media strategies, etc. Online companies score over conventional store owners, because they know so much about their customers. But with a little imagination and ingenuity, this information can be collected and used effectively. In fact, large retail companies have already started to implement strategies around this idea.
Engage customers:
Large retail companies have data but they have to use this information to communicate and personalize their relationship with their customers. Personal information about buyers is probably the biggest weapon in their arsenal that could help them handle competition from online companies. Retailers, large and small, can use this data to send information about offers, receive feedback and engage customers. With tools like email, SMS, missed call, apps, Facebook, Twitter, Instagram, implement such ideas would be a cakewalk.
Blend the good aspects of online and in-store shopping:
Imagine you are the owner of a retail store and a customer checks in asking for a particular material of cloth. Being an earnest businessman, you inform the person that although the material isn’t in stock, you can get it for him in two days time. Problem solved, you’d say? But wait! There’s more that you can do. You can direct this customer to your Facebook page and tell him that he can choose a color of his choice and inbox the preference to your page. You, in turn would see to it that the chosen color is set aside for the customer. This can then continue as a tradition wherein your customer can order from home and yet assure the quality of the product before buying. Another instance where online and offline shopping can be integrated is when retailers blend in-store shopping and online payment. Apple has already marched towards this end. iPhone customers can scan bar codes of products and purchase them through their Apple Pay app.
Enhance the Shopping Experience:
Installing mobile charging pods, keeping children entertained with a separate kids’ play area, matching the customers pace, etc. can go a long way in enhancing customer experience. The last aspect is particularly important. It is more than likely that your in-store customer has already researched about the product before entering your place. He is already aware of the different models available online and has probably chosen your store because yours was the lowest price of all and also because he’d like to be sure about the quality of the product. Understanding such customers and creating a positive experience for them is important.
Service first then sales:
I recently had the misfortune of purchasing a product through a teleshopping network. Whilst everyone in the company was happy to sell me their product, none of them shared the same enthusiasm when I had to complain about the product quality. If I had taken the pain of shopping through a conventional brick and mortar shop, I could at least visit the place and get the problem sorted. But it’s been a month now, and I am yet to speak to a ‘customer relations person’ who could own up to the problem and offer a solution. This is where brick and mortar shops can easily outshine their online counterparts. By demonstrating to your customers that their complaints matter, you’ve not only earned their trust, but also given them the satisfaction that there lies a solution to their problem.
Webrooming:
Webrooming refers to the process of researching products online and then visiting the store to purchase them. A report by Merchant Warehouse estimates that around 69% of customers with a smart phone, webroom. And to put this trend into numbers, Forrester Research estimates that this trend is likely to result in $1.8 trillion in sales by 2017. There are several reasons why customers prefer webrooming as against showrooming. Merchant Warehouse says, 47% of them don’t prefer paying for shipping, 46% wanted to touch and feel the product before buying, 36% of them wanted the store to match the online price and around 37% wanted it to be easy to return the product back to the store if they didn’t like it. So have a great presence online and on social media and run good offers there incentivizing the customer with coupons to use it offline.
Even in the age of online shopping, consumers want to be able to trust retailers before they buy a product. Retailers can take advantage of this factor by keeping customer engagement at the heart of their strategizing.