How Clienteling Saves Retail During Recessions
Here’s a sign of the times: various internet “experts” have been debating whether the US is currently in a recession so much that Wikipedia had to suspend editing on its recession page. But in general, if one has to ask “are we in a recession?” it’s a good chance we’re well into one.
And in times of economic contraction, retailers have to shore up their marketing and sales efforts and strategies. Namely, this means focusing efforts on the retention of current clients more than the acquisition of new ones. In general, retention is less expensive and as customers look to switch to cheaper and more generic brands, recessions are critical moments to increase brand loyalty to curb customer churn.
Today’s modern retail brands feel this more keenly than ever not only due to increased competition but because of the relatively low cost of switching brands. When choosing a different brand of makeup is as easy as clicking slightly to the left or right on an Amazon page, your marketing and sales teams have to do more to retain these customers.
How Clienteling Helps Retention
Due to the impending (or current, depending on which side of Wikipedia you fall on) recession, there is no better time than now to move your brand’s retention strategy squarely into the realm of clienteling.
Clienteling, simply put, is efficiently using customer data to create intimate, personal customer experiences. What clienteling isn’t is just “better customer service.” Rather, it’s a much more proactive way to provide an elevated shopping experience, while customer service is generally reactive.
And it works. Clienteling sees retention rates increase by as much as 200%. Considering the benefit of keeping your customer base during an economic downturn, clienteling has a tremendous ROI.
Moreover, modern retail customers expect a level of clienteling. According to Epsilon and GBH Insights (via McKinsey), “the vast majority of respondents (80 percent) want personalization from retailers. Personalization can even be called a “hygiene factor”: customers take it for granted, but if a retailer gets it wrong, customers may depart for a competitor.”
Here are some easy ways to start your brand down the clienteling path.
1. Invest in a Robust Customer Relationship Management (CRM) System
Your brand can’t personalize any sales or marketing without the right customer data. That’s why the vast majority of retailers already have a CRM system in place.
But not all CRMs can do the same things. One feature that’s especially important in clienteling is to have a CRM that tracks omnichannel retail activities. Because retail customers incorporate so much online activity even if they plan to purchase in-store, and even while they are in-store, your CRM must be able to track both online browsing activity and marry it with in-store purchasing.
This extends to social media, email and SMS channels, and referral traffic as well. Make sure your choice of CRM provides your team with an omnichannel view of your customers, so you have the most actionable insights when providing a true clienteling experience.
2. Personalize Messaging via Segmentation
Now that your customer data is in order, an easy way to start clienteling is to personalize your email and SMS marketing. And yes, we do mean SMS marketing. Not only are texts a hyper-efficient way to personalize communications, but studies show that the majority of consumers want to engage with brands via SMS.
Leverage your CRM to intelligently segment your audience into specific groups that will respond to personalized messages. The secret here is that even though your CRM is helping your team send out mass messages, these consumer groups should be highly segmented so each interaction feels like you are speaking to their needs. This is just one way great data management through CRMs can help small teams do more.
Here’s an example. Most brands already send out happy birthday messages with perhaps a discount code. Using better segmentation, you can target a segment of your customers that have an August birthday, who last purchased a yellow sundress, who live within 5 miles of a store location, and then give an in-store promotion for 20% off accessories that have been specifically curated to match yellow sundresses.
That’s the difference between clienteling and just general marketing.
3. Schedule 1-on-1 Virtual Appointments
Something happened recently across the globe that made everyone more adept and comfortable with video chats, and your retail team can take advantage of this to offer more clienteling to your customers. Namely, virtual appointments.
Virtual one-on-ones is a low-impact way to elevate the shopping experience, and many brands have been seeing higher customer satisfaction and retention by offering these appointments.
From offering a virtual styling consultation, or tips on how to best use their new purchases, to a general personal shopper appointment; online video appointments can make your brand “sticky” by bringing this level of service. And feel free to start small. Maybe the top tier of your existing loyalty program only has access to this. Then continue to expand the offering as your team gets more adept and the results show dividends.
4. Focus on High AOV Customers
Recessions don’t hit all customers in the same way. While low and middle-income groups may feel the pinch at the register, higher-income groups tend to see this time as a way to go “bargain hunting.” If your brand has to cut back due to recession worries, the clients to reach and retain are your high Average Order Value customers.
Your CRM can filter customers by their AOV to give you a targeted list of those most important not to let churn. Now your team can develop a strategy to bring these customers back into your store.
One way to do this is to offer bring-a-friend promotions. Since 64% of shoppers spend more when shopping with friends, this can be a double benefit as your already high AOV shoppers not only spend more but bring in new customers as well. So create a “Bring a Friend, Get 30% Off” promotion, put it into an email, and market it to this segment of your customers. Again, actionable data makes it easy for your sales & marketing team to move the needle the most.
For more clienteling ideas, visit the Endear blog. And if you’re ready to start using a robust CRM with clienteling solutions built right in, check out a free demo of Endear today.