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Despite initial concerns, research shows that the exponential growth in online shopping has not killed off brand loyalty. In fact, good customer service is still one of the main driving factors for consumer spend.
With the cost of acquisition of new customers relatively high through search engines, affiliates or other channels, it pays to keep hold of the customers that you already have on your side, to encourage repeat visits, building for the lifetime value of that customer rather than taking a quick win.
You cannot buy loyalty in the true sense of the word, it has to be earned, but the good news is that there are a number of ways that you can foster it:
Loyalty schemes are a great option, but they can be very expensive to establish and run. They can also be complex if you are focusing on monetising currency rather than creating something to truly reward loyal shoppers.
At Hotels.com, we introduced our Welcome Rewards loyalty programme in the US and much of Latin America in 2008, before rolling it out worldwide. We wanted to make it one of the richest loyalty programmes in our industry, and one of the most simple to use and understand.
The concept we decided on is: stay ten nights and get one free at a choice of more than 85,000 hotels worldwide with no blackout dates. The value that we gain from the ability to communicate directly with our best customers, and give them a valuable incentive to stay with us, makes the programme a highly cost-effective vehicle.
When it comes to other ways of forging direct relationships, whether through email, direct mail, social media or mobile apps, it is very much to do with the quality of the communication that you choose to deliver.
It’s important to consider: have you genuinely got something valuable to say? Is it something the customer really wants or needs? Is it worthwhile enough to interrupt their day? If the answer to those questions isn’t yes, you’re unlikely to see much return for your investment and could disappoint your customers.
It is far better to offer content that is of value to them and does not abuse their trust. They have given you permission to speak to them so make sure you communicate in a non-obtrusive way. It is very easy for consumers to build up a negative image of your company and switch to a competitor.
For instance, with our mobile app, we are launching push notifications. We are highly protective of our customer experience and these messages will not be about the latest deals or flash sales but will have more of a customer support angle, such as day of check-in hotel address or customer reviews. Our app has now been downloaded more than 15 million times globally.
Examining how customers use our app has also helped us to refine our communications. For example, we found that more than 70% of bookings from smart phones are for the same-day. This is very different to the usual behaviour on our website.
This insight has helped us to understand how we can make our communications more relevant to each audience.
The various techniques and tools of personalisation and segmentation really help with making your message relevant to your audience. An email just before the traveller leaves home with the hotel address, weather information and other local details is a constructive exercise.
Emailing a customer when the price drops on a hotel where they have registered their interest is a valuable added service.
Saving money but appearing penny-pinching to your customers is not a good long-term strategy. It might look right on the short-term bottom line but it will not win you many friends.
With this in mind, we recently decided to relax the terms and conditions of our Price Match Guarantee to make it more consumer friendly. Initiatives like this do come at a price but, to be a truly great retailer, customer service at a high level has to be built into every layer of the business.
In our case, from the perspective of our overall customer policies but also the design and ease of use of the website, our multi-lingual call centres and app design. These need to be measured effectively but customer loyalty and a first rate reputation go hand-in-hand and just make good business sense.