Reaching a new audience: How to build customer loyalty in retail

By now we are all painfully aware of the cost difference between acquiring a new customer and keeping an existing one. Every new person walking into your retail establishment represents the opportunity to maximize your marketing dollars for years to come.

Creating that first favorable impression is critical. But what can you do to persuade a customer to stay beyond the initial offer? First, it’s helpful to think in terms of how much a new customer is worth to your business. Next, consider why the customer came to you. Lastly, put effort into cultivating the relationship through an effective, personalized, omnichannel experience, so he or she will become a life-long fan.

Understanding the Value of a Customer 

It’s worth building customer loyalty once you realize how much is at stake by calculating customer lifetime value. This figure ranges considerably based on your unique business, but you can calculate the average customer’s potential worth by:

  • Calculating the average purchase value: Divide your company’s total revenue over the course of one year by the number of purchases in that same time period.
  • Calculating the average purchase frequency: Divide the number of purchases by the number of unique customers over the year.
  • Calculating the customer value per year: Multiply the average amount purchased by the average purchase frequency rate.
  • Calculating average customer lifespan: Determine (or estimate) the average number of years a customer purchases from you.
  • Calculating customer lifetime total value: Multiply customer value by customer lifespan to determine how much a person can ultimately mean to your store.

By one estimate, the average Starbucks customer is worth roughly $25,272! When you imagine that amount of money walking into your store, you may pay more attention to creating an excellent experience for that individual, versus thinking of that person as a $5-$10 purchase.

Ways to Build Customer Loyalty in Retail  

Ask: Why did the customer choose you?

A good rule of thumb is to “Ask and you shall receive!”

  • learn how to build customer loyalty in retailHave associates ask shoppers, “What brought you to the store today?”
  • Solicit feedback with a quick survey upon signing up customers for your rewards program at the register or attach an incentivized survey offer to the purchase receipt.
  • Follow up online purchases with a quick one-question “click-to-respond” email or text prompt to learn why first-time shoppers chose you.
  • Engage in social listening to find out what people are saying about their first interaction.

Though simple, this one crucial insight will help you understand the starting point for your new relationships. You can’t possibly know where you are going if you don’t know where you’ve been.

Ask: What does the customer need going forward?

There are many ways to discover what a new audience needs from a subsequent purchase:

  • Use existing data like customer support logs, customer purchase histories, and surveys.
  • Interview your sales team. What are they hearing from customers on the floor?
  • Hold a focus group interview session where you pay a few first-time shoppers for insight.
  • Map the journey with data tracking to see where a customer clicks before coming to you.
  • Set up an online suggestion portal or a physical suggestion box to gain feedback.
  • Conduct a SWOT analysis of competitor Strengths, Weaknesses, Opportunities, and Threats. 
  • Complete keyword research to see what first-time visitors on your site searched to get there.

Cultivate Relationships with a Rewarding, Personalized, Omnichannel UX

You may not win every customer for life, but three components are an essential basis for loyalty:

  • Omnichannel Experience: Combining online, mobile, and offline points of engagement is highly impactful for retailers who wish to create lasting customer relationships. One study from IDC Retail Insights found that omnichannel retailers saw a 5-10% increase in loyal customer profitability, a 15-35% increase in average transaction size, and 30% higher lifetime value than retailers who focused on a single channel.
  • Personalization: Technology has made it easier than ever for consumers to find exactly where to purchase a product. Likewise, it has become easier for retailers to learn about buyers to make more relevant, helpful suggestions. Today’s shoppers are willing to share location data, browsing history, survey responses, poll data, make online reviews, download an app, and view branded content if there is a meaningful benefit attached, such as earning loyalty points faster, receiving a discount, or receiving more tailored communications in the future. Customers especially love to be surprised and thanked with free gifts and gestures based on their preferences.
  • Rewards: Rewards add to the value your retail establishment offers. You’re not the only act in town, and shoppers know they hold significant purchase power. Rewards can be in the form of a punch card that incentivizes shoppers to visit or make purchases. They can be in the form of points accrued to reach a gift or percentage off coupon. Or the loyalty program can revolve around a particular service you wish to promote in-store. The fact of the matter is: rewards work! One study asked consumers about loyalty and 79% of consumers said that loyalty programs make them more likely to continue doing business with brands. Furthermore, these shoppers typically spend 36% more after they join the rewards program than before.

Rewards add to the value your retail establishment offers.

How to Build Customer Loyalty in Retail With Shopkick

One of the ways retailers are connecting with new shoppers is through Shopkick, an innovative mobile shopping rewards platform. Our retail partners develop simple mobile campaigns that may include videos, lookbooks, and rewards points offered in exchange for shopper engagement. Customers earn points for every shopping interaction—such as walking into stores, scanning product barcodes, making purchases both in-store and online, and engaging with branded content—that they can use toward gift cards, which creates a favorable brand impression and drives loyalty. Many buyers are first-time customers who became aware of the retailer and its offerings through the Shopkick app. And, those shoppers already familiar with a brand tend to make a purchase after engaging with that brand’s campaign via Shopkick. This proves that Shopkick is an effective way to boost incremental sales as well.

Want more innovative ideas for reaching new audiences and building customer loyalty? Read our success stories or contact Shopkick to learn how to become one of our partners and start driving greater loyalty right away.

Image courtesy of wavebreakmedia


Get In Touch




Shopkick is the fun and easy way to earn free gift cards for the shopping you already do. Download the app now!

Reaching a new audience: How to build customer loyalty in retail



Shopkick is the fun and easy way to earn free gift cards for the shopping you already do. Download the app now!

Connect with our team

Shopkick Partnerships deliver lasting results for your business. Fill out this form to learn more about Partner benefits.

Get the Shopkick Insights newsletter

Research and inspiration delivered to your inbox each month.

Follow us on Facebook

Recent Pins