How personalization enhances longer term customer loyalty
Building more repeat business and ultimately “locking in” customers to a particular web store is greatly enhanced if retailers can tie their customer loyalty and retention programs even more closely to personalization.
For instance, Best Buy Inc. in October will launch a major new web initiative with the specific goal of boosting the sale of consumer electronics, particularly higher-end appliances, among women shoppers. Specifically Best Buy is launching a new interactive kitchen and laundry design center on BestBuy.com that lets customers use room planning tools and rich media applications to shop for appliances. The new online design center will also be tied to Best Buy’s personal assistant shopping programs in various stores, Sam Taylor, senior vice president, online stores and marketing, Best Buy, told attendees Tuesday at the Shop.org 2005 Annual Summit in Las Vegas. “Our research shows that more women than men spend time shopping for consumer electronics," he says. “But they want help understanding the technology and making a buying decision.”
In the past web retailers of all sizes have spent considerable time and resources on customer acquisition. But during the session “How to ‘Lock In’ Your Customers and Lure Them Away from Competitors,” panelists, including Taylor and Kathy Gersch, chief marketing officer for Drugstore.com, also told attendees that they need to pay more attention to shopper retention.
At BestBuy.com the new online kitchen and laundry design center will enhance customer retention by giving them a new resource to personalize their next major appliance purchase. Shoppers can create their own customized room planner or use a quick start tab to select more than 300 different makes and models of kitchen and laundry appliances. “They can custom build a room and see how the room and the appliances look in different colors or in two or three dimensions,” Taylor says.
Studies from the Sloan Center for Internet Retailing at Vanderbilt Universities suggest that web retailers stand a better chance of retaining customers over a longer period of time if they use more personalization programs and strategies. For instance, with its new design center, BestBuy.com shoppers can create personalized design folders and forward the images and rooms plans to a friend or relative. They can also e-mail their custom plan to a Best Buy store with a personal shopping assistant program and have a personal assistant help them find and select their specified models. “With this new design center we are building loyalty, a community and tying it in to our multi-channel strategy,” Taylor says.
Locking in customers is also enhanced if web retailers make return shopping easier for customers. For instance, Drugstore.com has features that enable repeat shoppers to see their past purchasing histories and check off regularly acquired items in their shopping carts. To facilitate prescription refills, Drugstore.com has an e-mail reminder program, a list of items that are approved for purchase under a flexible spending or health savings account and receipts that can be downloaded and printed to send to an insurance company for reimbursement.
Drugstore also likes to “lock in” customers with loyalty programs that give repeat shoppers a 5% credit to be used on a future purchase in the next upcoming quarter. “We can improve customer loyalty simply by making it easier and faster to shop with us,” Gersch says.
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