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Businesses Sacrificing Profit Margins, Tech To Gain Customer Loyalty

Posted, by Rachel (Merkin) Welt on 02/09/2017

Gaining customer loyalty is one of the most difficult metrics to hit in today’s omni-channel B2C market.

Businesses are making two sacrifices to build consumer loyalty: one is an investment in technology and the other is a slimming of profit margins to ensure customers feel like they’re getting a bargain.

Discounts Abound

We’ve all seen it: discounts are everywhere. Whether it’s an online coupon code, an exclusive email club deal or a flash sale, consumers rarely need to pay full price anymore and these discounts are likely only a Google search away.

Read: Smartphones Drive Retail Sales

According to a recent study by SheerID, 75 percent of companies surveyed are sacrificing profit margins to offer exclusive deals to consumers as a driving force around their customer loyalty programs.

Sixty-three percent of the companies are offering promotions year round. They are prioritizing customer loyalty over their margin on purchasing.


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These companies are also depending on repeat customers to help them make their numbers by offering repeat customers discounts every time they visit.

Staying Ahead Of The Shift To Digital

The other way to meet your customers in their comfort zone, outside of offering coupons all the time, is to reach them wherever they are. Let them carry your brand in their pockets all the time by making the investment to get ahead of the digital evolution.

Think about the top five-to-10 apps on your cell phone. How many times a day (or even hour) do you interact with those brands? Now, extrapolate that to the millions who do the same and think of the widespread loyalty opportunities.

According to an MIT Sloan Management Review study, companies that get ahead of the curve moving to a digital ecosystem like innovative players such as Airbnb, Amazon and Uber observed 32 percent higher revenue growth and a 27 percent increase in profit margins.

Going digital and offering discounts may be the best solution for gaining customer loyalty without sacrificing growth, revenue and business goals.

Additionally, offering gift cards to consumers as part of a rewards program may be another way to generate repeat business.


Topics: Loyalty Incentives, Customer Loyalty, sacrificing in business, gain customer loyalty

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