Loyalty With Omni-Channels

The bizarre valuations in e-tailing are taking India by surprise. Flipkarts of the world are imitating Amazon but with no innovation drive. The latest trend in retailing is the Omni-channel retailer – master of bricks, clicks and flips – with physical stores, online shopping and catalogues integrated into a seamless entity. This commercial paragon is bracing for a future that will include even more contact opportunities, such as interactive kiosks, personal digital assistants, wireless phones and yet-to- be-invented technologies using IOT and AI. And, in India, all of that must co-exist, given our extreme contradictions and diversity. Where else do you find cash on delivery as a payment option in e-tailing?

The pure-play e-retailer has become a team player, one of several contact channels available between the merchant and the customer. The lesson is that there is only one customer, who may or may not be an omni-channel shopper.

And while the opportunities for multi-channel  etailers are endless and exciting, a host of nightmarish questions must be answered to prosper in this new environment:

Do you maintain disparate data silos, organised by channel, that make it impossible to craft a clear view of the total customer relationship?

Can you go beyond merely measuring customer spending by channel, and track the impact of marketing campaigns across multiple channels by measuring customer value and ROI?

Are some of your best customers invisible to your database if they choose to pay with cash?

Are you creating a trusting relationship with your customers, and in the process initiating a dialogue that offers insight more valuable than any transactional data set?

Most e-retailers will struggle with answers to one or more of these questions. One way a multi-channel retailer can bridge the gap in this new environment is through a well-designed and executed loyalty programme. Such a programme can go a long way toward identifying the best customers, regardless of channel, developing a stronger customer database and encouraging them to spend more in any or all channels. Right now, many retailers find it difficult to link a customer’s actions across multiple channels. Early adapters of multi-channel retailing have learned some important lessons, such as introducing new channels to customers just for the sake of technology doesn’t work. The first priority must be understanding the customer and determining his preferences for browsing, purchasing and after-sales service. To develop a loyalty programme that builds bridges between retail channels and expands knowledge about customers to all channels, retailers must first analyse what they expect to accomplish.

Define measurable objectives. Is the aim to encourage cross-selling between channels or increase profitability in particular customer segments? What objectives can a loyalty programme help with, and what are possible new approaches?

Define the desired customer behaviour. Is the focus to increase purchase frequency or average sale amount? Or is the goal to shift sales volume from one channel to another?

Profile current customer behaviour. Look at current customers and build a channel strategy around them. For example, it would be foolish for a retailer to spend money developing a website if its customer base has limited computer access.

Clearly, there is no one right way to market through just one channel, but there is a right way to market to customers across several channels, and a loyalty programme can help. A successful programme assumes that all channels are included in the customer relationship, measurable objectives have been established, and promises are kept. With this foundation in place, a programme can boast the following characteristics: A loyalty programme must be highly visible regardless of the channel. A website can show special offers for programme members, a catalogue can feature the programme prominently and shoppers in the store should be asked if they’d like to join. To succeed, a loyalty programme must be easy to use in all channels. Minimise the fine print; the more the customers have to figure out, the less they like the programme. The balance of reward and recognition must establish value in the customer’s mind and motivate incremental purchases. Programme rewards should be credited regardless of where the customer prefers to shop.

Keep the promises made by the loyalty programme. If the promise is for a personalised, highly valued service, don’t bombard program participants with meaningless offers that obviously are available to everyone. Recent studies indicate that customers who shop at more than one channel – perhaps looking online and buying in the store or reading the catalogue/leaflet and buying online-spend more money with that retailer than single-channel shoppers.

The best way to coordinate marketing objectives across channels is to build a knowledge base of customer behaviours and preferences. Retailers cannot afford to let legacy systems interfere with building this knowledge base. A well-conceived and executed loyalty programme can be the key to turning invisible shoppers into hand-raising volunteers and profitable customers.

The writer spearheads execution and innovation for clients @CustomerLab

M Muneer