Customer loyalty has always been important in all companies. It is five times cheaper to retain a customer than to get a new one. After these last months of uncertainty and a total turnaround in many aspects of daily life, customer loyalty post-COVID is one of the survival strategies for many companies.
This study shows how a totally satisfied customer contributes 2.6 times more income to a company than a somewhat satisfied one and 14 times more than a dissatisfied one.
On the other hand, this McKinsey study shows how during the months of lockdown, 75% of shoppers tried establishments where they had never made purchases before, as well as new brands. The deciding factor for this was product availability.
Customer loyalty post-COVID program
According to Jess Huang, partner at McKinzey, first of all, you have to design a successful loyalty strategy. For this you have to:
- Define what “success” means to your company
- Define the objectives to measure their effectiveness
- Design a program that creates value for the company and consumers
Points to consider:
1. Provisioning:
- The main reason consumers stopped being loyal to their brands was the availability of the products. To avoid this situation, it is necessary to have greater visibility of the optimizations and efficiencies of the supply chain processes.
- Manufacturing and warehousing should be more diversified in order to be able to respond more agilely even if there are lockdown policies in different countries at different times. Companies will have to have several suppliers for the same products as well as keep in mind the possibility of subcontracting nearby suppliers.
According to the EAE Business School professor Marcelo Leporati, “No supply chain, anywhere in the world and in no sector, no matter how stable, is prepared to absorb a 40% variation in demand overnight since there is no availability of labor, equipment, machines, raw materials or productive capacity for such an abrupt change ”. The specialist recommends not storing large amounts of stock in case unforeseen events arise. However, he recommends not leaving anything to chance and proposes to have preferential supply agreements with reliable suppliers who are committed to supplying the merchandise when necessary.
2. Closed feedbacks:
- Asking your customers’ opinion about your products is a personal way to listen to them while improving your products or services. The fact of implementing the comments and ideas raised by your customers makes them part of the product. For many, it will be a source of pride and satisfaction, which will help you to retain them. One of the keys to closing these feedbacks will be to maintain a personalized and non-automated communication.
It will be easier for you to get feedback from your customers if:
- It makes them part of the process and they let them know.
- Reward them for their time and effort.
- Ask follow-up questions.
3. Customization:
- By showing interest in creating personalized products and services, you will make your customer feel special so they will most likely repeat the purchase at your establishment.
- When creating loyalty programs, it is very important that communication is personalized as it will arouse consumer interest. In addition, today, users demand that it be in real-time.
For example, if a customer buys a jacket from a specific brand, the ideal would be to send him offers or information about that same brand, or more jackets, or garments that match the purchase he made. In this way, we provide information relevant to him and make him feel special.
- Personalization generates the following emotions:
- SECURITY. The client feels that you offer your best interests.
- COMMITMENT. The client notices and values the effort you make to consolidate the relationship.
- RECIPROCITY. The fact of wanting to deepen the relationship with your client will make you the first option for the next purchase.
Loyalty programs that stand out from the competition are those that maintain an emotional relationship with their customers. In these uncertain economic and health times, these programs have the opportunity to demonstrate caring and empathy.
There are brands that have based their loyalty programs on only points and discounts. By forgetting the emotional part of the customer-brand relationship, big discounts and low margins have been lost in this cycle of promotions.
On the other hand, the discount on necessities such as health and hygiene goods can show the consumer how this company cares about the well-being of its customers instead of profiting from opportunism and increasing the prices of these products like other companies have done.
Examples:
One of the most recent examples of loyalty programs is Wallmart + with the intention of standing up to the Amazon Prime service. They have recently created this program that benefits the consumer by providing:
- early access to personalized discounts
- chain gasoline discounts
- to be able to scan the products and pay with the mobile in-store without having to go through the cash register
- unlimited free shipping even on the same day
Investing in customization software and strategies is a safe bet that will be reflected in ROI and customer loyalty.
4. Empathize and comfort:
In these turbulent months, empathizing with your customers will bring you closer to them. For example, creating communication campaigns where a message of hope, well-being or humility is sent will make your clients respond positively.
For example, the Marriott hotel chain decided to extend the benefits of its points program to all membership categories during the worst months of the pandemic. This action was very well-received by users who congratulated and supported the campaign on social networks.
Another example of how we can offer comfort to customers is flexible return policies. For example, the American retailer Nordstrom makes its return policy more flexible to gain customer loyalty by prioritizing customer acquisition and LTV (lifetime value). A return can be made without a ticket since the sales clerk will search for the purchase information with the help of the credit card used. In case of not finding it, Nordstrum promises to refund the money in a gift card.
Another example of flexibility is Ikea that allows returns within the next 365 days after purchase.
5. Online and offline communication
Use all the resources at your fingertips such as social networks, the information in search engines, offline media, etc. to communicate to your clients the most up-to-date information on the status of your company. It also adds value that you communicate the hygiene and safety measures taken as well as the new facilities that you offer to your customers.
6. Extra effort in safety and hygiene rewarded
According to the Wharton Baker Retailing Center and WisePlum study, consumers are twice as loyal when the brand does its best to protect their health and safety.
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