Online marketers don’t suffer the restrictions of having a finite customer universe – but for retailers and brands with physical stores, this is a live concern. For a physical retailer wanting to expand their customer base, your choice is to either open new stores (expensive, cash-draining, with diminishing returns); reach new customers through technology (time-consuming and expensive); or to invest in marketing existing stores to drive increased loyalty and frequency from existing customers – which is a far more cost-effective and profitable strategy.
As Tesco proved more than 20 years ago, the key to driving customer loyalty and frequency is to know who your customer is and build a relationship with them through timely and relevant marketing
However, despite its simplicity, too many retailers fail to deliver on this concept. And yet ignoring it could mean losing 5 – 10% in like-for-like performance across your store estate. Unless you’re currently linking at least 50% of your in-store transactions to a customer, you’re missing out on significant revenue and profit opportunities.
Why are businesses failing to develop systems to find out about their customers and build relationships? They presume that implementing it is too complex; they are nervous about GDPR; they have concerns about their internal teams’ resilience – or there is simply a lack of ownership in developing a channel-oriented structure. These fears are needless.
There are three key areas to get right – all relatively easy and cost-effective ways to supercharge your business performance.