December 18, 2017 How to Increase Customer Loyalty Using Digital Coupons, Discounts and Deals
Customer loyalty is important to any business’ bottom line, but you probably don’t know just how valuable it is. On average, forty percent of a business’s revenue comes from just eight percent of its customer base (i.e., repeat customers). But businesses are spending as much as eighty percent of their budget on new-customer acquisition. Obviously, you need a new customer to create a repeat customer, but the message here is spending time cultivating a loyal customer is a better use of your time than trying to get new customers in the door.
On average, forty percent of a business’s revenue comes from just eight percent of its customer base (i.e., repeat customers).
The good news is offering digital coupons, discounts and deals can help both with getting new customers, and fostering loyalty to win repeat customers.
Coupons?! The buy one/get one free kinds of deals beloved by 70s-era housewives everywhere?! Yep. Coupons are making a comeback. Just look at some of these Coupon Statistics for 2017:
- 79% of consumers look for deals in loyalty and reward programs before making a purchase
- 73% of consumers rely on coupons more than they did three years ago
- 90% of consumers use coupons, finding them from a variety of online and offline sources
- 90% of mobile device users have at least one subscription to access coupons, promotions and special discounts
Coupons and discounts work because they get new customers to your store (online or otherwise), they help you build a following, and they’re easy to track.
The cheapest and easiest way to offer a coupon or discount is digitally, through a coupon code. Coupon codes can be tailored to help you track where and how they were redeemed. They can be disseminated in text or over the radio, tv or podcast. And, unlike, a paper coupon, there are no printing or shipping costs.
Ready to create some digital deals of your own so you can attract new customers and, more important, keep them coming back? Here are six ideas you can try today:
Offer a monthly, weekly or seasonal discount. Keep your promotion relevant to current events, holidays and seasons.
Benefit: Repetition can help keep your brand fresh in a customer’s mind. Offering a discount gives you a reason to reach out to customers and therefore stay on their list of go-to merchants.
If you’re launching a new product, you might wonder if customers will be hesitant to try it because it can be risky to invest in something you’ve never tried before. And without any customer reviews to consult, there’s no guarantee they’re gonna love it. Give shoppers some incentive to buy your new product or service early.
Benefit: Promote the feedback and reviews from those who “early-adopt” your product to keep the purchasing momentum rolling after your launch.
Sell off old or overstocked merchandise
If products are taking up space in your inventory and you’d like to make room for new items, offer a promotion to move those old or overstocked goods.
Benefit: Customers using coupons typically spend twenty-four percent more than those with no coupon. If you’re looking to off-load some inventory, the price-point you’re offering your product at may be a loss-leader, but enticing folks to shop with your coupon means they may spend more in the long run.
Retargeted discounts to previous customers
A previous customer has already given you a bit of data about their shopping habits. For example, if someone purchased kitty litter and a cat toy, odds are they have a cat. Use this data to tailor offers to them going forward.
Benefit: Once someone patronizes your business, there’s a twenty-seven percent chance they’ll become a repeat customer. If you can get them to make a second purchase, their likelihood of making more purchases jumps to fifty-four percent. People who have already trusted you, and spent money with your business, are low-hanging fruit. Keep them coming back with promotions tailored to their past purchases.
If your company is like most, you have a presence on all of the major social media channels, you send emails, and maybe even have a blog. Offer deals wherever you’d like to drive traffic.
Benefit: Verbiage like “Follow us on Instagram to get special offers” or “Subscribe to our email list to get loads of discounts” can help you grow your following. Channel-specific offers help you build a larger, captive audience of people interested in your business.
Remember that episode of Seinfeld when Elaine ate a bunch of terrible subs just to earn a free one? (Watch the clip.) People love being a VIP, an insider, one of the cool kids, or in Elaine’s case a Submarine Captain. Create a loyalty program to help you identify your VIPs and reward their (multiple) purchases with extra discounts.
Benefit: When earning a new customer, regular coupons and discounts provide a benefit to potential customers on the front-end. They may have never made a purchase, and after using your coupon, and may never make a purchase again. However, with a loyalty program, you’ll reward customers after they’ve made multiple purchases. Think of Elaine and those subs. She was a repeat customer 24 times over before she got her free sub. Whereas, a Buy One Get One Free offer may have earned her a free sub after just one purchase without having to subscribe to anything.
There’s a reason 84 percent of companies offer discounts and coupons on a regular basis. Digital coupons, discounts and deals are a versatile way to get a good ROI.