So you’ve created a great loyalty program and your customers are doing exactly what you want. Now what? While momentum is building, you feel there is something missing. Best in class retailers like Target are using subscription services to springboard repeat purchases and increase sales. Subscription services build customer loyalty through value add services such as customization, delivery, and timely communications about the availability of essential products.
Adopt a customer centric approach as you create your subscription service:
Mine your data to understand your customers.
Your loyalty program data tells you everything you need to know about customer shopping behaviour. The biggest opportunities exist with customers whose shopping patterns differ from the status quo. Ask suppliers for data on the majority of customers shopping in their categories to get a broader sense of the industry. Using this customer data, retailers can pinpoint areas where they can increase their frequency of purchase and also create cross-selling recommendations.
Remind your customers when it is time to purchase.
There are many products that consumers use and replace regularly. Think about daily vitamins, cosmetics or laundry detergent. Usage of these products tends to follow a pattern with predictable times to replace or replenish. Use your loyalty data to determine these predictable patterns and when to remind consumers to replace the dated product. As an incentive to drive purchases, you can occasionally use loyalty points or coupons to encourage consumers to purchase on a regular basis.
Create a subscription service that speaks to the customer.
After motivating customers to subscribe to regular reminders (or, better yet, pick-up a prepacked order of essentials), remind customers about the time and effort you’re saving them by replenishing products for them. Promote your subscription service as easy to use and, where possible, fun. Better yet, tie the service back to your tracking or loyalty program to give them special offers or first trials on offers they might want based on their purchase history. Think about how you could apply the Birchbox model to your retail business by creating curated boxes of newly launched products, for example, giving subscription customers an exclusive first trial of the products.
Make sure you can deliver.
It’s important that your backend and in-store systems can deliver on your subscription service. There is nothing more frustrating than being reminded to come in store to pick up an essential only to discover that it’s out of stock. If something on a customer’s subscription list is in short supply, inform customers about when it’s available or deliver the product directly to them when it’s back in stock.
Make the purchase convenient.
Put yourself in the customer’s shoes. How can you make their purchase more convenient so that they feel rewarded for their loyalty? The retailers with the best subscription services do not rely on financial incentives but focus instead on ways to make purchases faster and easier. Offer a variety of options to allow customers to determine what works best for them. From prepayment to home delivery or delivery through a pick-up window, these retailers realise that exceptional service creates an emotional connection with the consumer that is hard for competitors to break.
A subscription service can create great returns with proper management. By following these steps, you will find yourselves well on the way to building customer loyalty through a subscription service that exceeds customer expectations.