5 Ways To Improve Customer Retention During The Holiday Season
The holiday shopping season from October to December is the most important time of the year for retailers (and most businesses in general). Consumers around the world spend more money during the holiday season than at any other time of the year. Savvy business owners looking to capitalize on this spending spree need to implement strategies to increase their company’s customer retention rates.
Customer retention is a BIG deal.
- The most significant retail revenue driver is customer retention. (KPMG)
- On average, a business will lose 20% of its customers annually because they fail to take care of their existing customer relationships. (Marketing Wizdom)
- It costs roughly 5x more to market to a new customer than to an existing one. Depending on the industry you are in, it can cost up to 30x as much to acquire a new customer vs. retaining an existing customer. (Boston Consulting Group)
- 82% of companies agree that retention is, in fact, cheaper than acquisition. (Cross-Channel Marketing)
- Existing customers are 3 to 10x more likely to buy than a cold lead and are 50% more likely to buy new products and spend 33% more than new customers. (MarTech)
So what can your business do during the holiday season to keep sales going throughout the year? Here are five ways for your business to increase customer retention during the holiday season:
1. Improve The Customer Shopping Experience With Engaged Employees
60% of Americans find the holiday season stressful, and 15% reported that their greatest cause of stress was making the right gift choice. If you can make their lives easier, consumers are more likely to do business with you again. A great way to improve and streamline their overall shopping experience is by engaging and motivating your employees to deliver world-class service.
- 47% of customers would take their business to a competitor within a day of experiencing poor customer service (24/7)
- Organizations with higher than average levels of employee engagement realized 27% higher profits, 50% higher sales, and 50% higher customer loyalty levels.
- Companies with employee engagement levels of over 50 percent retain over 85 percent of their customers. (Demand Metric)
The holidays can present a series of tough scenarios for your employees: large crowds, high stress, returns, product dissatisfaction, and more. The customer experience could mean the difference between a one-time buyer and a lifetime customer. A simple yet effective holiday employee incentive program is exactly what your business needs to build loyalty, improve employee morale, and create a winning corporate culture during the most wonderful–and most important–time of the year for sales.
2. Keep Shoppers Coming Back With a Loyalty Program
62% of consumers don’t believe that the brands they’re most loyal to are doing enough to reward them. 80% of people who stop doing business with a company felt the company could have done something to retain them. A loyalty program will keep shoppers coming back for more, and is a valuable tool for businesses to remarket to customers.
55% of consumers said rewards programs affect their decision as to what mass-market retailer to shop at this holiday season, according to a study by eMarketer. An open-loop, reloadable prepaid card is a great way to reward your customers. The cards are great for a wide variety of programs, such as rebates, contests, prizes, referrals, etc., making them an all-in-one loyalty device. The cards conveniently store all of the funds in one place, and payouts can be made instantly. A holiday prepaid card delivers a personalized experience, offers choice, and gives your customers immediacy. By offering open-loop cards as al holiday loyalty reward, you also give customers an opportunity to earn a reward they can use towards more holiday gifts.
3. Post-Holiday Shopping Incentives
For many businesses, the “Holiday Hangover” is a real thing. Once the holiday dust has settled, customers tighten their wallets, stop shopping, return items, and turn their attention back to regular life, which can lead to low sales and huge revenue hits.
Thank your customers for their holiday loyalty and improve your post-holiday sales with an incentive, such as special sales, personalized offers, free shipping, or additional bonus points on their loyalty card. Make sure to follow up with customers via email to ask about their experiences. Offer coupons or incentivize referrals to bring in sales, push products, and strengthen brand awareness. Speaking of referrals…
4. Holiday Referrals
A customer this is happy about their purchases loves telling their friends. These people are the strongest brand advocate your business can have. 49% of U.S. consumers say friends and family are their top sources of brand awareness. People who are referred by a friend are 4x more likely to buy from a business, and one offline word of mouth impression drives sales at least 5x more than a paid impression. 92% of people trust recommendations from family and friends more than all other forms of marketing.
5. Reward Customers For More Than Just Their Purchases
A loyalty/incentives program isn’t just about rewarding customers for spending money. Although only 35% of retailers reward customers for activities other than a purchase (Intelligence Report 2017), rewarding non-purchase activities via your loyalty program will help improve brand loyalty and engagement, especially during a competitive holiday season. There are many ways to engage and reward customers for non-purchase activities, such as:
- Joining your loyalty program
- Posting/Engaging on social media
- Filling out a customer experience survey
- Posting a product review
- Sharing products with friends and family
‘Tis the season to be jolly… and keep your customers coming back for more and more (and more). Check out our 2019 Holiday Incentive E-Book below to see how DCR Strategies can help you win the season with innovative incentives that make an impact:
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