By James Done, CEO of Tail
There’s no doubt that Covid-19 has hit businesses large and small the world over, and hit them hard.
Many have had to close down altogether while others have faced a constant battle for survival, missing rent payments, having to furlough staff and all the while trying to come up with new, pandemic-friendly ways of serving their customers – if they were even able to serve them at all.
But I don’t need to tell you how hard it has been – that much is obvious. What I do want to do, however, is lay out a strategy for recovery, along with a few tips on how businesses can better prepare for the unexpected.
Building customer loyalty
Loyalty is key to any successful business and will also be the deciding factor when it comes to recovery. While the quality of your product and standards of service are big factors when it comes to driving loyalty, the fact of the matter is that there is a great deal of competition out there. Therefore, it is important to think about areas of differentiation – things that your business can do to really stand out.
For example, it’s become pretty common to see merchants offering discounts and rewards to attract new customers and retain existing ones. In fact, it’s become so common that having a loyalty programme doesn’t really set a business apart from its competitors. There are a few tweaks such as personalisation that can create distinction, but in my view the real critical area to get right is the user experience when it comes to the ease of redeeming rewards.
While loyalty schemes in the past were a nightmare to implement and keep track of, smartphones have changed all of that. Rather than customers having to pack out their wallet with several different plastic store cards, everything can be done through an app. But even merchants who don’t have the resources to develop a loyalty app can get in on the act too. Several banks offer customers the chance to earn cashback rewards by spending on their cards with participating retailers, so the barrier for businesses that want to create a scheme for rewarding loyal customers is now even lower. Making it easy for punters to redeem rewards is absolutely vital to an effective loyalty programme.
Putting money in your customer’s pocket
Loyalty schemes are often seen in supermarkets, fast food outlets and high street retailers, but there’s no reason why players in other vertical markets shouldn’t be thinking about them as well. For example, a travel agency that offers rewards for people booking holidays would have a useful point of differentiation from its competitors, as well as a better chance of retaining that customer when they book their holiday next year.
It’s about adding value – while travel agencies often try to bundle extras such as car hire, insurance or airport transfers into the deal, it’s very rare to see them offering cashback. But this is exactly the kind of reward customers want – they will value some extra spending money in their pocket over the convenience of booking everything in one place every time. Of course, the kind of rewards that work best in terms of attracting and retaining customers will vary by industry, but cashback will always have universal appeal.
Preparing for the unexpected
The very thought of having to endure something like the Covid-19 pandemic again is almost too much to bear. But we must face up to it and do what we can to be better prepared for the unexpected. A business that is serious about retaining its customers needs to show that it really cares. They need to develop a relationship that goes beyond the purely transactional. This involves providing services that add value beyond simple discounts. For instance, B2B propositions could look at adding educational and training schemes for their products. Gyms and leisure centres could offer health checks and sessions with a personal trainer. There’s also a great deal that can be achieved by producing relevant and useful content for customers.
Many businesses that were forced to close their premises were supported by successful crowdfunding campaigns, driven by customers who didn’t just buy from those businesses regularly, but actually had a deeper connection than that. This just goes to show that there’s so much more to loyalty than simply offering one-size-fits all discounts, and businesses that take their loyalty programmes to the next level will be able to depend on the goodwill of customers when times are tough. Make it relevant, get the rewards right and make them easy to redeem.