5 questions to ask about customer loyalty

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In a retail market where new customers are thin on the ground, keeping hold of existing ones becomes even more important for powering growth. But how do retailers and consumers view customer loyalty? And what is the most effective way to use the now ubiquitous loyalty card?

Asking the right questions is the start for getting the answers you need. Ask yourself the following:

1. Have you identified your most loyal customers?

The starting point for any effective loyalty programme must be identifying those customers who are already loyal. These customers merit attention and investment: a loyal customer is over 10 times more committed to you than a uncommitted one. Reward them appropriately.

2. Do you have a multi-channel strategy in place?

Customers who shop on line are also more likely to be spending more in store. An effective loyalty programme must therefore cover all available channels to create a single customer view that will reflect the reality of the customer’s  relationship with your organisation and drive more effective marketing.

3. Do you ask customers what they want?

Up to 30 percent of your marketing budget may be wasted talking to customers about the same thing they didn’t respond to last time!

4. Can you offer products for every segment of your customer base?

Every time a customer has to go outside your store for something they want, their loyalty is potentially eroded. By making sure that you cater to every segment of your customer base, you minimise the potential for defection.

5. Are your price promotions accurately focused on the products that matter to price-sensitive customers?

Price is only one part of the package. Unless the products you mark down are the ones that customers want, you may not be reinforcing their loyalty – no matter how generous your discounts.

The common theme behind these questions is that customer loyalty is powered by customer intelligence.

As a recent report* shows, retailers are now understanding that the most valuable aspect of loyalty cards isn’t the short term lift they can provide for sales through promotions and incentives. It is the customer intelligence they facilitate by providing such a great fund of information and detail about consumer preferences and habits.

*Retail Loyalty and The Customer, Conlumino Research

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About Author

Cindy Etsell

Principal Marketing Specialist

Cindy joined SAS UK in 2010 as a Retail Consultant. Her focus is to help build and drive SAS UK’s retail business, with responsibilities that include increasing the awareness of SAS to potential retail customers, liaising with existing customers to ensure satisfaction and speaking on behalf of the company at key industry events. Her knowledge and skills enable her to quickly address customer challenges within a specified budget and timeframe, ensuring positive outcome for SAS and its retail customers. Cindy brings a vast amount of experience to SAS. She started her career as a sales associate with Canadian retailer T. Eaton Company where she worked her way up to section head learning the trade and complexities involved in running a successful retail business. Since then, she has held roles in a number of major organisations, including Hewlett-Packard, SAP UK, and most recently Cisco which she joined in 2006 as industry business development manager for retail.

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