20 Oct 2020 A Guide to Marketing Food & Beverage Businesses During COVID-19
Did you know, acquiring a new customer can cost five times more than retaining an existing customer? There’s a much greater chance that an existing customer will take up one of your offers, compared to a new prospect.
Let us give you the stats.
The probability of selling to an existing customer is 60-70%, while the probability of selling to a new customer is a significantly slimmer, only 5-20%.
With this in mind, could you and your business benefit from rethinking your priorities? Should you be doing more to reward returning customers?
If you answered “yes”, you’re not alone. Only 40% of companies have an equal focus on acquisition and retention.
In tough times, capitalise on existing customers
Whilst the mistake of failing to capitalise on existing customers is common, the coronavirus pandemic is unforgiving. The June 2020 Australian National Accounts Report showed that accommodation and food services declined by 43.3% since June 2019.
It’s time to be strategic. No more overlooking your most valuable prospects.
So, what are the best ways to nurture existing customers, and capitalise on their loyalty?
Well, we’ve got a few suggestions.
Build a loyalty program
Sigh. Not another gimmick, right?
Don’t worry. We promise that the best loyalty programs are the most simple ones. A super straightforward way to earn points is what we’re talking about. After all, unique offers presented in a convenient way is what makes loyalty programs so enticing.
Make the connection between points and savings tangible. “Save $10 on any meal when you earn 100 points”. “Earn a free coffee with 50 points”. That kind of thing. This is perfect for food and beverage businesses who have a customer base who buy frequently, and acquiring more sales is realistic.
If your customer base has a tendency to spend larger amounts less frequently, you may consider a tiered system. This would incentivise your customers to spend more, in order to increase the value of their rewards.
Program mechanisms aside, a loyalty program is likely to be received favourably in today’s pandemic. The savvy shoppers will be looking to redeem rewards or save a little wherever possible. It’s a great way to stay top-of-mind and remain the preferred business when prospects are looking to spend.
Create a membership base
If you’ve got a base of loyal customers, you’re already half way to creating a successful membership program.
Now, it’s just about turning those customers into committed and engaged members.
A membership program often has an upfront joining fee, in return for a bundle of ongoing rewards. In saying this, the trick is to make the upfront cost feel like less of a fee, and more of a way to redeem an instant reward.
So, our first recommendation is to create an enticing sign-up offer. Giving away value at this initiation stage is the best way to successfully complete the hardest step – attaining the member. For example, you may give away a popular bottle of wine as an incentive, or offer free shipping.
From there, it’s down to creating relevant offers and promotions to retain the member. You could offer tailored promotions. For example, you could offer a discounted bottle of shiraz to those members who consistently purchase red wine, rather than whites. More about tailored offers later.
You may even use your current members to expand your membership base through referrals. Think about rewarding members for recommending you to others. You could incentivise public reviews and sending email invitations to friends. This is a great way to expand your database and ensure it keeps growing through trusted referrals.
Create a tailored experience for loyal customers
One of the massive benefits in attaining a membership or loyalty base is the ability to better know these customers, and market to them accordingly.
After creating the list, you can then look to capture, segment and target specific customers within that database. You’ll be able to attain reports on your members, and classify them according to rules, and create relevant promotions for each member type.
One example of this is called “dynamic content”. This means that a specific piece of content (such as an offer or discount) is displayed only for a specific audience type. For example, a customer in the top quartile of the points attribution may be offered an exclusive offer. Not only would this make them feel valued, but also, these bigger spenders may be the most likely to take up the offer. Overall, it allows for more tailored and agile marketing.
How do I get started?
Whilst the entire loyalty project may seem overwhelming, there are many different ways to organise the program. Here are some ways to implement and maintain a program with ease.
Branded punch cards
A punch card is a quick and easy way to implement a reward system in-store at your Point of Sale (POS). Using this system, customers will be incentivised to make a certain amount of purchases (e.g. 10 coffees) in order to receive a reward (such as a free coffee).
The ease of implementing this option may mean it’s your preference at this stage. However, there is a downside. The fact that the process is not digital means that user’s data will not be stored in any electronic lists. You will not be able to reach out to them with other promotional material, nor track purchase history or collect consumer data. This means that the ability to engage the customer ends there.
In saying that, it still offers the benefit of incentivising customer loyalty. A beautifully designed card is also importing for branding.
A POS to CRM Integration
If you’re looking to redeem the benefits of collecting consumer data, this digital set-up may be for you. It allows consumer data (such as the number of coffees purchased) to be collected at the point of sale, and then communicated to the Customer Relationship Manager (CRM).
Once the purchase data is within your CRM, you can choose to set up automated emails to deliver the reward. You can also choose to send other promotional campaigns to your list, provided they have opted-in.
This set-up would require a few elements. Potentially they could include:
- A POS system, such as Roller or Retail Pro
- A CRM or automation software, such a Mautic
- An integration tool to connect the two, such as Zapier
A Customer Loyalty Platform
The above process involved a manual connection between your point of sale, and a CRM system. A digital customer loyalty software would do this automatically, and deliver a whole platform specifically for loyalty program. This has many benefits for you, as well as your customers. You will enjoy a seamless set up, as well as digital analytics and a backend to manage the set-up digitally if you wish. Customers can enjoy features such as a loyalty app or dashboard, where they can track their purchases and monitor their rewards.
You Won’t Regret It (and Your Customers Will Love It)
Overall, it’s worth putting in the effort. If your returning customers are your most valuable prospects, it makes sense to invest in them. Reward those who have remained loyal, and come out of the COVID-19 pandemic top-of-mind.