Everyone knows that it costs more to acquire a customer than to keep one. But are your systems optimised to build long-term, valuable relationships? Discover the 3 practices that every retailer should put in place and how your POS system should support them.
With today’s shoppers having more choice than ever, retailers need to find intelligent ways to foster loyal profitable customer relationships rather than one-off low value transactions. Rather than finding ways to constantly acquire new customers, the most progressive retailers are focusing on maximising lifetime value. That is, taking a long term view of the value of a customer and understanding that some (and many) customers will spend more frequently, in higher amounts and over a long-time frame, if they perceive you offer superior value and understand their needs best. Calculating what the dollar value a good customer could represent over their lifetime will change the way you look at your sales, marketing, service and operations strategies.
Often, loyalty and lifetime value strategies get associated with reward card programs. This is with good reason – a huge 71% of Australians belong to at least one store loyalty card program. And POS systems play a critical role in facilitating these programs. However, establishing loyalty and lifetime value strategy goes deeper than just rolling out a rewards program and so does the contribution a POS system can make. As we will now explore…
The most important and sustainable way to build long term loyalty is to optimise your customer experience.
This should be the foundation to get right before embarking on any other loyalty tactics or programs. No amount of loyalty points or marketing campaigns are going to make up for a disconnected or disappointing shopping experience. Exceed expectations and not only will you see that customer return with a desire to spend even more, but most likely, they will also tell others about you too.
So, what role can your POS system play in establishing a consistently excellent experience? Here are just a few examples:
At the most obvious level, the capability of the product search and recommendation engine within your POS system can go a long way to providing a great service experience, empowering your staff to provide relevant suggestions that are tailored to customers unique preferences. Other tools that can make a key difference include customer profiles (including identifying VIPs), the ability to arrange inter-store stock transfers and mobile selling via iPads or tablets. On the other hand, POS performance issues like a slow system that causes customer delays are a sure-fire show stopper.
Effective modern POS systems, of course, have become much more than just the software for staff to manage your customer check out process. For most retailers, they are the core system for managing your data and workflows relating to inventory, fulfilment and logistics, products, customers and sales. They help to make sure you:
Getting these operational elements correct has a major impact on perceived convenience, reliability and choice, which can obviously impact whether or not shoppers decide to make you their go-to brand.
With an omni-channel POS system, all your data and processes are managed in an integrated fashion for both your in-store and ecommerce operations. Customers are then met with up-to-date and accurate information about each product, no false promises are made about stock availability and they can take advantage of unified channel services like Click & Collect.
Almost half of Aussie and New Zealand shoppers spend more with the promise of rewards, and around 56% are more likely to return to a retailer with a loyalty program in place than one without.
Offering a loyalty reward program provides you with some unique opportunities – it incentivises the customer to provide you with a more detailed profile of them, allows you to associate all of their transactions to that profile and, of course, encourages them to shop more with you to access the rewards offered. At a higher level, you can aggregate the profile data you have captured on your customers to get some critical insights. E.g. you may find a particular demographic of your customer base represents the best lifetime value, or is making the bulk of purchases for a particular product line.
A good POS system should offer the ability to create a customised loyalty rewards program as standard. You should be able to provide your customers with their own personal loyalty card, which is associated to their POS System Account Number and branded with your company’s logo and information. Once the customer is in-store, you can scan the card barcode and begin collecting information. Your POS system loyalty program function should offer the following as standard:
Just remember to keep your loyalty program easy to join, simple to use and offering a sense of value regularly to your customers so they have every reason to return.
Australian and New Zealand has some of the highest email marketing click-through rates in the world, according to a 2016 Benchmark Study by IBM.
Make a point of capturing customer email addresses and detailed profiles within your POS system. You can then send out emails using this data that are tailored to that shopper’s preferences. These email campaigns should focus on relationship building over time – starting with a simple thank you (and possibly some form of surprise gift) through to providing exciting news, insights and advice about your area of expertise.
Of course, you should also focus on more transactional elements like cross-sell and up-sell, repeat purchase, discounts and sales promotions or new product launches. But, as with any relationship, it is about getting the right balance between give and take.
Author of Post: Bamik | Date of Post: 2017-12-04