As Retailers Use New Tactics to Drive Loyalty, Here’s How to Tell What’s Working (and What’s Not)

Several companies are experimenting with new initiatives to improve customer loyalty, including Amazon.com paying customers to pick up purchases and retailers like Abercrombie & Fitch, Anthropologie, and Gap ramping up discounts. Others, like Jenni Kayne and Madison Reed, are leaning into membership programs — but are these efforts truly worthwhile?

Companies often turn to business intelligence tools for answers, but amidst ongoing market uncertainty and quickly shifting consumer expectations, the retailers with the advantage are those that can measure and optimize in the moment to evaluate their tactics.

Using Technology to Measure and Optimize Efforts

Offering a powerful rearview look at past results, business intelligence systems can report on what’s already happened, such as whether a promotion or marketing strategy translated to an uplift in key performance indicators like sales and foot traffic. However, the data is usually lagging by 30 days to 60 days. Analyzing customer feedback and behavior, on the other hand, can offer clues on the why behind the what, indicating what strategies may or may not be popular with customers. Customer insights from surveys, social media, online reviews, and website and app engagement activity can more immediately reveal how consumers feel about an update a company makes to drive loyalty.

For example, if a retailer is planning to debut a new product and develops a marketing campaign with a sizable promotional budget, the company can harness the power of customer feedback to assess the impact from day one instead of waiting months for results. The retailer can use post-transactional surveys for on-the-spot insights, asking questions like, “Did you notice the new product we launched?”; “Did you consider buying it/did you buy it?”; “What factors contributed to you considering/purchasing the item?”; and “If you bought the item, how would you rate it?” The retailer would be able to immediately measure awareness and consideration of the new product — a forward-looking indicator of sales — and then make any necessary adjustments.

In addition to soliciting direct customer feedback, there’s a wealth of indirect signals companies can gather to measure the effectiveness of paid membership programs, exclusive offers, seasonal promotions and other efforts.

These can be captured at every touchpoint by using artificial intelligence-powered analytics that glean learnings from what customers say about a given product or promotion in contact center interactions, social media mentions and online reviews. For instance, the retailer can search for when customers use phrases like, “I wish” or “You should,” which provide opportunities for retailers to better meet customers’ needs.

Sentiment about a given strategy can also be detected when customers browse a retailer’s website from home or use their app in-store for curbside pickup, returns or checking out. For instance, retailers can use digital analytics to monitor whether users ignore or interact with web or app banners promoting a new product or offer. In-store camera systems can also be leveraged to analyze foot traffic around promotional displays to see how people interact with offers and guide in-store navigation.

Based on analysis of these and other signals, retailers can unlock opportunities to improve the placement and content of promotional messaging to drive further awareness and excitement around these types of announcements.

Additionally, frontline retail employees are a great resource for understanding what the customer is looking for. They’re uniquely qualified to provide insights because they understand business objectives, can identify issues as they're unfolding, and suggest how to address customer challenges.

Final Thoughts on Driving Long-Term Loyalty

A well-timed promotion or customer incentive can certainly boost foot traffic, but what sustains retailers are efforts that have a lasting impact and result in ongoing visits, with the brand becoming the store of choice for consumers.

Mike Debnar is principal of retail and digital innovation at Medallia, an experience management software platform.