Improve Your Customer Acquisition and Retention with the Right Reward

Developing a strong customer acquisition and retention strategy can seem like a daunting task for even a seasoned marketer. There’s a plethora of articles out there extolling the virtues of this approach or that technique, and pretty much all of them have something of value to say. The problem is finding the time to read, to digest and, really importantly, to act on the advice that’s offered.

An often overlooked quick win in the battle to improve customer acquisition and retention is the simple act of offering the right reward. 

Retail and service providers can capitalise on this, from massive national retail operations to local boutique hairdressers and coffee houses. National retailers have the buying power to offer flexible rewards that are attractive to a variety of potential customers, while small operations tend to have a fairly simple product range that lends itself to a simple offer.

For the vast swathe of businesses that are neither local with a homogeneous product nor national with vast resources, how do you go about choosing the right reward? Here are four simple things to keep in mind.

1. Choose rewards that are simple

The whole point of a reward is that it’s a way of enticing customers away from your competitors and through your doors or ensuring that existing customers keep coming back without being lured away. If it takes too much thought on the part of your customers, it’s less likely to be enticing. You want something that can be explained in 140 characters or less.

2. Choose rewards that are helpful

You need to think through your loyalty scheme and look at your customers and your product. ‘Buy a tent, get 20% off your next tent’ won’t really help people as, rather obviously, tents aren’t something you replace regularly. ‘Buy a sleeping bag, get 20% off a second sleeping bag’ might work if you are trying to attract families, but ‘spend over £100 and get a £20 voucher’ has a far broader appeal, it’s genuinely helpful and it’s relatively simple to explain.

3. Choose rewards that are enticing to a wide range of customers

Ideally you should choose a reward that offers a lot of flexibility, letting your customers decide how they reward themselves. It’s very easy to make assumptions about your customers and that can colour your decisions when it comes to choosing a reward on their behalf. This in turn could limit the reach and effectiveness of the reward. There’s a strong case to be made for developing a loyalty scheme that works across multiple outlets to attract a wider range of customers. Sometimes the reward will go to other places but often you’ll attract new customers the other way.

4. Choose rewards that add to your bottom line

The most important factor of a reward that’s designed to improve customer acquisition and retention is that it works for your business. You need to make sure that you are bringing in profitable customers, not just rewarding people that shop the deals, and to do that you need to make sure that you keep a close eye on how the scheme is performing through redemption statistics and subsequent changes in customer behaviours.
The temptation with a customer acquisition and retention reward scheme is to overcomplicate. It’s a simple trap but it’s also simple to avoid. If you keep in mind three types of customers that you want to attract and retain, and if you look at the reward techniques deployed from those three perspectives, you should be able to develop an approach that adds genuine value to your business.
Choosing a reward and distribution mechanic that is simple, helpful and enticing for your customers will keep bringing them through your door. Making sure that it adds tangible value to your bottom line is what’s going to give you longevity.