Customer feedback is a precious resource for any business that wants to improve and grow, which is why retailers and brands must offer a variety of rewards to secure the supply of information from shoppers
Getting the most out of customer insight relies on securing as much information from your customer as you can and being able to establish, as close as possible, a true one-to-one relationship with them.
But as with any relationship, both parties need to put something in to get something out. This is why fashion retailers are looking harder than ever at how they can reward customers for both their custom and their information, with the aim of increasing loyalty as a result.
As a starting point, many retailers or brands with an online offer - such as young fashion brand Firetrap - will sign customers up to online newsletters to enable them to start gathering data. Firetrap gives customers a 10% introductory discount as a reward.
Reaping the rewards
Other businesses reward customers for helping out. Etailer My-Wardrobe recently ran a customer user survey on its website covering everything from site design to favourite brands. The survey was launched in an email that was sent personally by company founder Sarah Curran. As well as asking questions about site usability it also allowed the etailer to find out more basic details, such as age profiles, about its customers. Respondents received a £50 gift voucher - a clever way of both thanking them for taking part and driving sales.
“We packaged it not as a discount but as a gift voucher, but technically it was a 30% discount because it was £50 off a £150 spend,” says My-Wardrobe communications director Lauren Stevenson.
She says the personalisation and the open-ended nature of the questions meant that responses were richer in detail than expected, and some of the changes suggested in the survey were actioned within 48 hours of the results being received.
Stevenson says rewards are key when asking customers for help: “Whenever we do anything that is asking something from our customers we always give them something back - whether it is a voucher or a prize draw.”
Laura Summers, online marketing manager at multichannel retail specialist BT Fresca, says targeted offers can encourage customers that may have never opened or clicked through from an email marketing communication to participate. “We’ve seen a lot of retailers promoting one-off discounts quite heavily. Used strategically and evenly spaced out, they can increase the revenue from loyal customers by three to five times,” she says.
Such online offers can also allow retailers to up-sell and cross-sell across their customer base, with discounts applied only to the customer that the retailer wants to target at a given time. In-store promotions, on the other hand, have to apply to all customers regardless of their spending habits.
Offering discounts is a hugely popular tactic for retailers and brands to increase sales and loyalty. It is often assumed to be the best tactic, but sometimes simple things such as a wrapping service, next-day delivery for the price of standard, or just great customer service can be more effective at driving loyalty.
“There is more to it than simply giving reward schemes or money back - there is more of a trend towards treating the customer and giving them an incentive to repeat the same behaviour again,” says Tony Hammond, product manager at retail solutions provider Torex.
And this incentive doesn’t necessarily have to be a ‘thank you’ for spending. “There is big potential for rewarding customers for how many times they visit the site, or how many times they contribute to the site or offsite to social media. It may not be about buying stuff, it may just be about engagement,” says Dan McNamara, account director at web agency Enable Interactive.
Giving something back is all about driving loyalty to the brand. “It’s about long-term customer growth, reward and retention so that they become a lifelong customer rather than quick wins,” says Summers.
And targeted communication may be enough, according to Hammond. “It’s not just about rewards. You can make a customer spend more regularly with you just by letting them know there is something new in store - that’s one of the biggest temptations for people to come in,” he says.
Although fashion retailers and brands have shied away from traditional in-store loyalty schemes because of the length of time it takes to build a customer history, online gives them new, cheaper opportunities to build customer histories and data. Home-shopping retailer Littlewoods, for example, operates a scheme where shoppers can build up points towards discounts.
Alex Morris, experience director at Enable Interactive, says: “There is a vast opportunity there. It’s a powerful device to connect with your customers and to show you appreciate their custom.” Yet it’s a missed opportunity for many. “It’s quite surprising more people aren’t embracing it - it’s there in the back of their heads but no one has really jumped on it,” says Morris.
At My-Wardrobe, the etailer is just about to relaunch its loyalty programme, in which customers currently earn £20 for every 500 points they earn. The retailer also has a VIP area on its website called the Concierge, where its top 500 customers get extra benefits.
Stevenson says: “The great thing about a loyalty programme and being able to use things like a survey to give something back is that it makes customers think they aren’t just a customer, they are a friend,” says Stevenson.
Rewards are also offered on My-Wardrobe’s Facebook page. The company recently celebrated its fourth birthday by giving away £400 every hour on the page. “We saw our traffic and our Facebook fans double as a result. Everyone loved it and said it was really fun as an emotional engagement tool,” says Stevenson.
Loyalty schemes can also be used by retailers and brands to move customers between bricks-and-mortar stores and the web, such as incentivising store shoppers to shop online by offering free delivery and returns, or persuading an online customer to venture to a store by inviting them to an in-store event. By moving shoppers across two or more channels, customers’ average spend can increase by between 3% and 10%, according to BT Expedite.
But as well as speaking to their customers online, retailers want to speak to them in store too. Retail survey provider Empathica does this by getting customers to fill in surveys handed out in store, and putting the completed survey into a cash draw. “Using the common medium of the till receipt, retailers can solicit feedback directly from thousands of their customers every day, getting feedback via the web, over the phone and via text messaging,” says Gary Topiol, managing director of Empathica. Even My-Wardrobe connected with customers face-to-face by opening a pop-up shop in London.
Hunting for data
Torex also works with retailers to capture data at point of sale. Richard Willis, retail solutions director at Torex, says: “One of the biggest challenges for fashion retailers is how to capture customers when they are in store. When you shop online it’s very easy to capture that customer through log-ins and track their shopper trends, but it’s about how you follow that through to the store without putting another piece of plastic in their wallets.”
As a result, technology is also moving into stores, with digital coupons likely to become more widespread as retailers look to both reward customers and capture their data. “Something like digital couponing through your phone is definitely where we see the trend going,” says Willis.
Hammond agrees: “We are seeing a definite trend to have more real-time digital coupon incentives so you can incentivise customers to buy a product by sending them an SMS or email.”
Customer centricity isn’t just about appearing to put the customer first, it is about truly doing so and understanding their wants, needs and desires. Topiol says that for this reason relevance is key: “Customers get inundated with irrelevant offers but retailers need to do much more to understand ‘me’, otherwise customers will just block that line of communication because they’ll feel the retailer hasn’t earned the right to communicate with them.”
However, if customers do feel they are getting something back and it isn’t just a one-sided relationship, the rewards for the retailer or brand will be immense.