FEATURE: Retain a Customer for Life, not just for Christmas

- Marketing - Dec 29, 2014

While Christmas is when retailers see sales soar, it can also be a very dangerous time for these brands.

Competitors will be vying for the attention of your hard-earned customers, tempting them with highly competitive offers, deals and price drops in an effort to secure the largest share of the festive wallet – and this could easily see your customers walk out the door.

Competitors becoming more competitive at this time of year is not the only threat. As consumers are faced with a hectic season of shopping as they buy festive gifts for loved ones, they will most likely to resort to the most convenient purchases.

Furthermore, the use of increasingly sophisticated digital marketing means that competitors will be even more closely connected to your ‘loyal’ customers than you might care to think, likely sending out beacons to lure them in.

With so much at stake, brands must consider how they can keep hold of their customers all year round – so they are not at risk in the run up to Christmas when their competitors ramp up and invest in their customer acquisition strategy. Brands are truly at the greatest risk if they have failed to consider customer retention throughout the previous 12 months, and subsequently built up an army of loyal customers.

The battle of the brands is a consideration all year every year, with the consumer as the judge and jury and Christmas as the crescendo – brands should do everything in their power to ensure consumers have no reason to go elsewhere. To avoid missing out on the Christmas cheer, brands must invest in their customer retention strategy to make this happen.

As part of this, these brands must recognise the role of rewards – specifically to incentivise customers and promote loyalty. The following considerations will help brands in developing a customer retention strategy, which will help them continue building their loyal customer base for Christmases to come:

Plan early

Plan your customer retention strategy early. Leaving it until the run up to Christmas is too late. In fact, start planning now, to be sure to keep hold of customers next Christmas. Doing nothing isn’t an option; make customers feel special and wanted before, during and after the festive period.

Communicate clearly

This is key at all times, but particularly during peak seasons when competitors are creating noise that your customers could be listening to. It is important to ensure customers understand the initiative and value of what they are being offered. Points statements, reward reminder emails and programme enhancement updates are simple and effective ways to drive customer engagement and cement the ongoing bond with the brand.

Reward consistently

Although rewarding loyal customers at Christmas is beneficial to the relationship, it is more effective to reward on a regular basis throughout the year. This slowly builds up loyalty, and means ad-hoc rewards are not overlooked and undervalued. However, focusing on key milestones, such as seasonal or monthly points during the year, which culminate in a Christmas campaign, can help keep the customer locked in to your brand.

Surprise your customers

Providing a reward that a customer isn’t expecting can be a very powerful tool. By giving customers an incentive to win as they spend throughout the year, the perceived value and memorability of the brand is amplified when it comes to keeping hold of customers in the festive season. Customers tend to get used to reward schemes quickly, so it is important that it does not become too familiar. Customers can also, over time, begin to view loyalty rewards as an entitlement rather than a gift.  This can be avoided by regularly refreshing or enhancing a programme over the year, so that the customer doesn’t disengage with the programme once they have reaped their Christmas rewards.

Timing is everything

Rewards and incentives as part of a retention strategy must be quick and easy to redeem, without any high level of effort on behalf of the customer. By offering customers lifestyle rewards and point based loyalty schemes, it makes the incentive easy to redeem, with the financial benefits instantly available for customers to see.

Relevance

There is no optimal number of rewards that should be offered throughout the year, as this varies on a programme by programme basis and is driven by factors including the spread of customer demographics, budget and programme objectives. The most important thing is to remember they must be relevant to the audience and something they really want.

By taking these things into account, a brand will have a robust strategy in place to retain their customers throughout the year – meaning they have less to fear when competitors come calling during the festive season.

By Ian Horsham, Divisional Director of Promotions and Incentives, The Grass Roots Group

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