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Why set-up an expensive loyalty program if you let your members opt-out easily?

February 15, 2021 by Amy Arnell

Studies show that it’s 5x easier to retain a customer than acquire a new one. Given this, it’s safe to say that e-retailers should invest in customer retention. Reward schemes can transform a company’s marketing strategy. BUT, only if they’re done correctly. Carry on reading to ensure your loyalty program was worth the investment. 

 

Summary : 

 

 


 

Didomi Whitepaper | Customer Permission in Retail & E-commerce 

"Industry professionals have estimated that for every £1 spent on consent and preference management systems, they receive somewhere in the region of £37-46 in return."

Find out in this whitepaper how to delight your customers and grow your sales while staying compliant with privacy regulation 

 

E-commerce Whitepaper_Socials_VF (EN)

 

Retaining customers - the number one priority for e-commerce 

 

You’d be hard pressed to find someone in e-commerce who says that Amazon’s business model is not the model they aspire to. Amazon revolutionised the game with its focus on logistics and quick delivery times. But, it’s number one key to success is customer retention. 

 

According to Marketing Metrics, the chance of making a sale with a new consumer is between five and 20 percent, while the odds of selling to a customer who has already made a purchase from you is between 60 to 70 percent. 

 

It’s clear that e-commerce should focus on repeat business, but how can this be done? 

 

Discover Didomi for E-commerce

 

Loyalty programs - a business opportunity, but only if done correctly 

 

How about a loyalty program? This is a scheme used frequently to retain customers, cause them to buy in higher quantities, shop more often, or interact with your brand more frequently. It ticks all the boxes for marketing teams, but only if done correctly. 

 

Because what happens if a loyal customer buys a cup of tea with you every day for a month, and then you reward them with a free cup of coffee? The offer isn’t relevant, and the system falls apart. How could this have been avoided?

 

Well, you could have simply asked the customer whether they prefer coffee or tea. 

 

You have this loyal customer database, and, given high costs of acquisition, you know how valuable they are. But do you know how many of them actually engage with your content and messages? How many people have opted in to your reward program? And can they opt-in to the promotion that offers them free tea, and out of the promotion that offers them free coffee? 

 

If you don’t invest in customer preference and experience, your users will opt-out, as your reward scheme is not relevant to them. The time and investment you put into your loyalty scheme was wasted, as you didn't focus on how to ensure and maintain that crucial opt-in.

 

Ultimately, why are you setting up an expensive loyalty program if you let your customers opt-out easily? 

 

Privacy will drive trust and loyalty, an integral part of good customer experience 

 

How do you improve customer experience to reduce your opt-out rate, optimise the effectiveness of your reward scheme and maximise that all-important customer retention rate?

 

This is where consent and preference management comes into play. 

 

There is little you can do without consented user data. From getting insights through analytics, to reducing cart abandonment or customising your website to individual users, your users’ consent rate should be a key KPI to follow

 

Consent rate should be a key KPI to follow - continuously optimise to drive opt-in.

 

How much sense does a loyalty scheme make if you don’t have that crucial opt-in? Not much.

 

Loyalty programs are opt-in and permission-based, and must make it clear to members what data is being collected, and for what ends.

 

From the first interactions on your website (or your app) to the depth of your most elaborate email nurturing strategies and loyalty reward programs, every contact with customers should be based on their explicit permission for you to gather and use their data.  

 

75% of consumers say they won’t purchase from a company they don’t trust with their data (Harris poll for IBM, 2018). Giving users choice and getting their opt-in is critical.

 

The link is clear: customer experience is a crucial differentiator, and a major factor in customer experience is trust.  

 

Image taken from a study conducted by Salesforce. 

 

There is not much sense in setting up an expensive, elaborate reward scheme if you don’t have a system for optimising this crucial opt-in rate. 

 

Pierre & Vacances Center Parcs Group generates trust among consumers by providing a better preference management experience, with the added benefit of reducing overall marketing opt-out rates. Want to find out how? 

 

Download case study

 

And, how can your company be next? 

 

The solution for customer retention  

 

In order to optimise opt-in, retain customers and avoid the coffee vs. tea debacle we mentioned earlier, why not just ask your customers what their preferences are yourself? 

 

Ask your customers how they prefer to be contacted 

 

Consent and preference management is at least as important, if not more important, than sending attractive promotions to your loyal customers. 

 

If you give your customers a choice about what data they share with you, you build this crucial relationship of trust. Ask them how often they would like to be contacted about offers and reward schemes, which offers they would like to opt-in or out of and how they prefer to be contacted by you (phone, email, post). 

 

For example, the bespoke Didomi preference management solution for Pierre & Vacances Center Parcs included consents for various marketing purposes, across all of their channels (email, phone, mail, SMS) and specific delegated consent workflows for offline consent collection (call-center and frontdesk). Want to find out how? 

 

Download case study

 

Giving your users choice about how they are contacted will improve opt-in rates 

 

Ask them for information on their likes and dislikes - a personalised experience is a better experience, and 84% of customers say that being treated like a person, not a number, is very important to winning their opt-in, and, consequently, their business.  

 

Giving your users choice about how their data is used will improve opt-in rates 

 

If customers have been given real choice, and have specifically opted in, they are far more likely to engage with your offers, open your emails, interact with your brand, and, hence, buy more. If they trust you, they are more likely to buy again. 

 

It's clear that opt-in rates are a crucial differentiator, and consent and preference management really is the backbone of this strategy. 

 

Don't let your members opt-out easily!

 

In putting your users in control by giving them choice, you build this relationship of trust. Furthermore, in personalising your retargeting efforts and emailing strategy, you treat that customer like a person, not a number - a key element in maintaining their opt-in, business, and loyalty. 

 

In the digital era, termed as the “Attention Economy”, brands have to make an impact for customers to take notice. Ask your users when you can have their attention, at what time and at what frequency. 

 

According to Matthew Crawford, "Attention is a resource—a person has only so much of it." So, take the time to understand your customers, and make every interaction count. This is how you will drive up revenue. 

 

Improving your consent rate will increase your revenue

 

The Didomi Preference Center 

 

How can you access and store this vital information about your customers? Setting-up a dedicated Preference Center (PC) is the best way to build and sustain authentic customer engagement. 

 

A Preference Center, or “preference management center”, is a space dedicated to the management of subscription settings. More than an elaborate unsubscribe page, a Preference Center is an entire system to collect and manage preferences, on any channel, device and environment, and functions as the basis for better permission marketing.  

 

It allows you to collect consent and preferences both online and offline (delegated consent), and to design the best consent workflows for your users, giving them a simple way to manage their consents and preferences. 

 

A Preference Center will allow you to collect all the vital information earlier mentioned about your customers’ preferences, and then can be integrated with all of your tools (Salesforce CRM, Hubspot CRM, Adobe Campaign), to ensure that these preferences are shared across all your systems.

 

It also allows users to re-configure their choices at any time if they change their mind, allowing your brand to stay relevant and powerful in your marketing. 

 

Discover our Preference Center

 

In e-commerce, acquiring visitors is expensive, activating them is a daily hassle, and losing them to competitors is the worst. Building an omnichannel Preference Center with real communication choices is the best way to reduce the likelihood to lose them forever.

 

Prioritise trust, optimise opt-in, and ensure your loyalty program was worth the investment. 

 

Schedule a demo

 

DIDOMI CASE STUDY 

Pierre & Vacances Center Parcs Group streamlines customer opt-in across multiple countries and languages. They generate user trust and revenue by providing a better preference management experience. Want to find out how they did it? 

 

Download case study

 

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