“To each their own” is an old saying that rings very true in an era when customer data is abound. When looking at the behaviour of customers, it is obvious that tastes differ – from how they shop to what they shop for. How retailers react to these varying degrees of tastes and more importantly, what solutions are offered to satisfy them, are the key differentiators to winning in market.
Digitization of everyday life and human interactions has filled massive data warehouses with bits and pieces of information about all of us. How do you take advantage of this knowledge and build customer loyalty and engagement? You could have an untapped or underutilized resource of acquired, relevant customer data.
In the mighty world of retail, the “silver bullet” is to get the right proposition to the customer in the right form, at the right time – which typically is as they plan a purchase decision. The promise of personalization is a great start to demonstrating your understanding of individual customer needs. The ability to satisfy a customer’s unique taste, based on collected shopping behaviour data, aids in building customer loyalty and sales growth.
Working through this kind of data may seem daunting at first, especially if you think that each customer requires their own personal offer. This is not necessary the case. While each customer wants to feel they are having a personalized experience, the fact is many shopping behaviours can be grouped together. Your analytics solution provider (whether internal or a third party) should be instrumental in developing manageable groups of like customer that can be effectively targeted with similar offers. Once that data has been collected, reviewed, and segmented, here are four offer strategies that can be successfully employed depending on objective:
1. Show a customer that their business is welcomed and offer a Thank-You
This is a promotional proposal designed to reinforce loyalty. It’s the type that most retailers think about, when someone mentions “personalized offers”. It is usually an offer for an item that was purchased in the past and is likely to be purchased again. With these offers a retailer is securing the next purchase occasion.
2. Allow a customer to explore a variety of products
Sometimes referred to as an “upsell offer”. This is for the customers that have engaged with some of retailer’s products and built up trust throughout the experience. Based on the past purchase behaviour, this offer entices the purchase of a similar new item (maybe more premium, maybe a different brand) that a customer has not bought in the past but is very likely to enjoy.
3. Make sure a customer feels catered to and cared about
By processing information, it is possible to predict what would work well to complement the products that are already in the basket. For example: let’s say most families with children buy cookies, milk and honey. But there are those within the segment that buy only cookies and milk. This presents a cross-sell opportunity to show a retailer understands their needs and actually carries a great variety of honey that the customer might not have paid attention to.
4. Provide a customer with a reason to spend more
Offering perks and points to customers if they exceed a certain limit of spending (usually a slight stretch above their average) offers a solution that kills three birds with one stone: the customer is not constrained to a specific product that a retailer wants them to buy; they increase their overall basket size; and they are rewarded with an incentive to come back again (if, for example, they are offered extra loyalty points).
These strategies can lead to success throughout the customer journey. When executed with rigor they provide a clear indication that the tastes and preferences of each customer are being taken into account and are in fact very personal to what the customer wants.