This year, the emerging loyalty and acquisition challenge could lie with an unprecedented trend: a marketplace where customers simply do not want to move.
Insurance customers will likely get better deals for staying with their current insurer. Similarly, despite the threat of higher energy prices, utilities customers are staying put too.
Recent research carried out by Love2shop explored whether customers are considering switching their broadband packages and it confirms that consumers aren’t looking for cheaper deals there, either.
The picture poses a problem for the teams managing customer recruitment targets this year, so how do you persuade people to switch if they don’t want to?
What do 1,500 people say about switching broadband?
When Love2shop asked 1,500 recipients of a Love2shop e-Gift Card if they were planning to swap to a cheaper broadband deal 81% said they were not looking for a cheaper deal. Only 1.3% said they were looking for a better broadband deal.
The results indicate that you could save budget and still enjoy better results in your loyalty and acquisition promotions by switching from rewards like cash and merchandise to non-cash rewards like gift cards.
There may be a glimmer of hope in the data: 18% of respondents indicated that they had switched to a new broadband deal recently, (at time of asking). However, paired with the prospect of low switching from other sectors, it is likely a difficult start to 2022 for sales, marketing, and acquisition teams.
The situation begs the question, what can we do to get closer to those targets?
How can we improve the offer for new customers?
When Love2shop asked the public what they prefer to receive as a loyalty reward, or as a reward for becoming a new customer, they picked gift cards on both counts. So sweetening the deal for the consumer doesn’t have to just involve slashing prices to attract attention from new customers when gift cards are easily accessible.
“Most teams will consider sweetening the deal with a reward, like a gift card or e-gift card before dropping prices to attract new customers,” said Alex Speed, Head of New Business at Love2shop.
“Non-cash prizes like gift cards costs less than an overall scale of price drops and still excites and attracts new customers. Over the lifetime value of a customer, the prize up-front is a cost-effective strategy to stand out to consumers.”
Or, double down on loyalty?
When we’re starting to see diminishing returns on marketing spend it’s prudent to consider switching attention to building loyalty, developing brand engagement, and, eventually, creating brand advocates.
“It might seem counter-intuitive to focus on loyalty when customers are already likely to stay, but it’s a huge opportunity to build long-term engagement that can help acquisition in the future.
“A sturdy engagement plan secures customers for another year and done well, retains them to help stabilise revenue. If this supports the conversion of the loyal, engaged customers into brand advocates and recruiters that adds even more to the ROI in an incentives strategy.”
One small change for big results
Regardless of how your business decides to tackle a changing market in 2022, it’s worth reconsidering how new customers and loyal customers are rewarded.
When Love2shop asked the public what they prefer to receive as a loyalty reward, or as a reward for becoming a new customer, they picked gift cards on both counts.
Read the survey results here.
Over to you
We’re always happy to hear more about your customer acquisition plans, and if we can help you reach your objectives this year, please do get in touch.
