How retailers can leverage data to create long-term relationships with their customers
With the abundance of choice that today’s consumers have, particularly online, we’ve seen loyalty to retailers decrease. If a retailer can’t meet the immediate and increasingly stringent needs of a consumer, be it price, product quality, service, delivery time, etc., they simply move on to a competitor. And those shifts are occurring across all channels and at all points in the purchase journey.
This development is important for a couple of different reasons: one, the cost to acquire new customers continues to rise. In fact, it can cost up to five times more to acquire a new customer than to retain an existing one. And two, increasing customer retention rates yields gains to the bottom line. According to the Gartner Group, 80 percent of your future profits will come from just 20 percent of your existing customers. Furthermore, boosting retention rates by just 5 percent can actually raise profits by 25 percent to 95 percent, according to a Bain & Company report.
To help address the retention challenge, retailers are looking to technology solutions that can help them leverage their most critical asset — data, and more specifically, customer data. Data on where, when and how much customers spend provides retailers with the information they need to craft relevant messaging and offers. With that, they can increase engagement and build long-term, loyal relationships. Tools that enable frictionless data capture across shopping channels are therefore at the top of many retailers’ wish lists as they look for ways to improve and personalize the customer experience. And prioritizing customer experience is proven to pay off.
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