Your holiday campaign was successful. You kept your CPA in check while driving higher conversion volume than you were hoping for. Now what?
Every year, retail marketers pull out all the stops to acquire new customers in Q4. Loss leaders are promoted, digital spend becomes more aggressive, and abandoned carts are furiously pursued. In total, a considerable amount of the marketing team’s time and budget are consumed.
However, what’s being done to turn these holiday shoppers into everyday shoppers? Are marketers meaningfully re-engaging after the holidays, or are their budgets and selves too exhausted?
According to a recent Retail TouchPoints survey, most marketers aren’t confident in their ability to retain their new customers. Indeed, one quarter of marketers expect only 10% to 20% of their new customers to come back. Another quarter of marketers expect between 20% and 30% to return.
What’s causing this lack of confidence, and how can retention be improved? According to marketers, the obstacles are numerous, and include:
- Long purchase cycles (49%)
- Lower price competitors (44%)
- Losing to marketplaces like Amazon (36%)
- Lack of customer information to retarget with (35%)
- Insufficient retargeting budget (21%)
While some of these factors may be out of a marketer’s control, there are two immediate areas that can be improved: data collection for retargeting campaigns, and spend efficiency for those very campaigns.
If a marketer isn’t capturing sufficient data about a newly acquired customer — or even a potential customer — then they must sit down with their business intelligence and web teams to sort out where things have fallen apart. If the marketer is unsure where to begin, it may behoove them to request an audit from their media partners.
Have cookies fallen off the site? Is CRM data not being passed properly? There are a myriad of questions that marketers must ask to ensure they are collecting the data necessary to plan out effective retargeting campaigns.
Once the signals are flowing, then even meager retargeting budgets can be flexed & used more efficiently.
With these basics in place, the next step is to revisit what’s being offered to these clients. While the deep discount offered during holiday promotions is likely not sustainable year-round, retailers must still offer compelling messaging to draw customers back.
Unfortunately, many offer promotions that only align with baseline customer experience expectations. For instance, 52% of marketers surveyed offer free shipping as a way to appeal to clients. However, such an offering only puts them on par with the marketplaces they are struggling against. It’s not a tactic to build brand loyalty so much as it’s a means of reducing abandoned carts.
So what is advisable? Here are a few suggestions to improve your Q1:
- Improve the overall user experience. Conduct an audit of your site on multiple devices, and correct any frustrations you encounter. Frustrated shoppers are not repeat shoppers.
Consider a loyalty program. While loyalty programs won’t work for all clients, some will inevitably be hooked. The key here is to ensure the first few purchases and other rewarded behaviors generate bonus rewards that give the user the confidence that they can significantly benefit if they engage regularly.
- Improve your newsletters. If a customer has already made a purchase with you, you should have enough data on file to ensure all subsequently pushed interactions they have with your brand are relevant. At a minimum, this means your CRM must have persona groups that users fall within so that the emails they receive from you are somewhat relevant to their interests. At an ideal, this means your emails are generative based on the SKUs they’ve purchased or looked at.
- Consider DCO. Q1 is a period of self-gifting for many shoppers, so the relevance of the product being advertised is more important than the given promotion surrounding the item. Consider utilizing dynamic creative optimization (DCO) with a well-curated product feed to appeal to these shoppers in January and beyond.
Finally, the best piece of advice is to not give up. When marketers take a serious look at why customers don’t come back, they also get an invaluable look at the barriers that might be hindering current acquisition efforts, as well. When a brand is able to offer a consumer experience that is repeatedly appealing, growth becomes second nature.