In the run up to Christmas, businesses focus marketing efforts towards a seasonal surge and much of that shopping is taking place online. During Christmas 2015 retailers saw £24.4 billion spent online – a 12% annual increase on the previous year, according to the IMRG Capgemini e-Retail Sales Index.
IMRG Capgemini has predicted a further 11% growth for 2016. Black Friday saw a significant shift towards online spending, with the number of shoppers falling by 7% on the high street and 5% at shopping centres compared to 2015, while online sales rose by up to 25%.
New Year traditionally presents a challenge for businesses in many sectors aiming to attract and retain cash-strapped consumers. This looks set to be particularly the case in early 2017 as a number of analysts have suggested that retailers in particular held down prices in the run up to Christmas, with price rises likely in the New Year.
Businesses face a pressing need to ensure revenue streams continue beyond Christmas and New Year. It is no longer enough to send out generic offers and rewards to the entire customer or prospect base. Here is a three-step strategy that can boost digital marketers’ New Year results and make sure that customers are not just for Christmas but are for life:
1. Reward with immediacy
Design New Year marketing to maximise ALL the new business leads that came in during the Christmas period. This is not necessarily limited to customers who actually bought items from you, but may also include potential customers who contacted you with enquiries or abandoned their carts. Instant digital rewards work well to convert one-off Christmas shoppers into regulars.
2. Empower a choice of rewards
Digital rewards designed to attract and retain customers need not be limited to money-off codes. Instead offer new customers and returning customers a portfolio of rewards that they can choose from, without necessarily collecting points over many months. At the same time, align customer rewards with the brand. If your organisation is targeting Millennials, for example, make sure that initial marketing and subsequent rewards reflect this demographic. For example, a life insurance company might target young customers with the offer of a free coffee in exchange for some interaction with their life insurance offer.
Digital marketing and associated customer reward schemes are also most effective when they are closely tailored to demographic groups – even, ideally, personalised to individual customers. In January, the most effective reward schemes will be those that have an element of ‘endowed progress’ – an effect whereby ‘people provided with artificial advancement toward a goal exhibit greater persistence toward reaching the goal’. In other words, if you issue them with a few extra loyalty points up front in the New Year, they will be motivated to stay with you and achieve the points total they need for the reward of their choice.
3. Share the love
Use digital customer rewards to incentivise reviews and online referrals. Review platforms have a very powerful impact on customer acquisition – highly positive online shares generate a 9.5% increase in purchase intent. At the same time never forget that the most effective brand advocates will be people who feel they have an emotional connection with your organisation. Empower individual employees to respond in a human and open manner on social media and to take responsibility for issuing small customer rewards where appropriate. If these rewards are tailored to the individual customer, all the better.
Banish the post-Christmas blues
Retailers are perhaps most affected by the post-Christmas slump. However many other sectors, from finance to utilities, depend on a steady stream of new business and could benefit from a fresh look at marketing in the New Year period. Market leaders must use the flexibility and adaptability of the latest technology to measure the success of their digital initiatives and adapt their activities according to the results they are getting, perhaps even on a weekly or daily basis. Artificial intelligence and data analytics technologies can provide an increasingly detailed picture of the buying habits, and likes and dislikes, of each individual consumer as well as granular information about how your marketing is doing.
A quarterly review, when the Christmas and New Year period is history, will come too late for the organisation to make the necessary tweaks for the season. If this sounds like your organisation, it would be worth spending time during quieter periods in 2017 planning for how the organisation will respond to customer and sales data in a timelier manner in the future.
Customer acquisition is becoming more challenging in a very competitive digital marketplace. It is key not only to use Christmas marketing to attract new customers but also to ensure that this is followed up effectively in the New Year. January 2017 looks set to be uniquely challenging and effective incentives could prove critical to an organisation's future.
By Adam Whatling, head of engagement and development at Love2shop Business Services