Retailers that want to achieve best-in-class performance in the current economic climate should begin to make customer loyalty programmes a top priority in their strategic marketing agenda, according research from Aberdeen Group and loyalty marketing firm Vesdia Corporation.
The research report, entitled 'Responsive customer loyalty: Creating customer commitment in retail', identifies the characteristics common to best-in-class retailers and highlights the use of customer loyalty offerings to both increase revenues and improve customer buying behaviour.
Among the study's main findings:
- Best-in-class retailers reported an average year-on-year same-store sales increase of 7.4%;
- Best-in-class retailers also reported that repeat sales had improved by an average of 21.8%;
- Best-in-class retailers reported that they had developed cross-channel marketing programmes for a more holistic customer value proposition;
- Retailers without a loyalty programme in place tended to report poor sales and customer retention results compared with those that do operate a loyalty programme;
- Developing lifetime customer value was cited as the top need that is currently driving customer loyalty-related decisions among retailers.
Coalition loyalty marketing
The survey found that 51% of best-in-class retailers use loyalty elements such as rewards. The data also showed that best-in-class retailers are more than 300% more likely than Average or Laggard retailers to include coalition loyalty marketing initiatives as a component of their loyalty strategy.
"In times of stagnant growth, retailers need to develop lifetime customer value through improved customer retention, re-activation, and acquisition strategies to improve long-term stakeholder value," concluded Sahir Anand, senior analyst and chief author of the report.
Need for differentiation
"This study underscores the importance of participation in comprehensive loyalty programmes which enhance a retailer's ability to sustain market differentiation and develop new customer segments," said Peter Davis, president for Vesdia.
The report also noted ROI measurement of customer loyalty programmes as an ongoing requirement for success. In fact, best-in-class companies were found to be five times more likely to be tracking, storing and analysing customer analytics.
The full report has been made available as a free download for a limited time from Aberdeen Group's web site - click here (free registration required).