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Retailers risk losing customer loyalty as they focus on short-term sales

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Retailers risk losing their loyal customer base as they focus on short-term revenue boost, says a new analysis.

Two-thirds of the surveyed UK consumers say that they feel “annoyed” as a loyal customer if a retailer offers exclusive discounts to new clientele, suggests research commissioned by Collinson. Some 1,006 UK adults were questioned to help retailers deliver smart experiences to influence customers purchasing behaviour. 

More than a half (53%) of the questioned shoppers say that they’re missing out on an offer from their retailer as a result of them failing to communicate properly, 42% feel “annoyed” if they have received an irrelevant promotional offer, and 52% feel “frustrated” when promotions aren’t aligned in-store and online, bringing to the forefront the need for retailers to keep their omnichannel experiences consistent in order to retain loyalty.

When it comes to the frustration felt by customers around discounting, 53% of the polled cohort say that they get “annoyed” if a retailer doesn’t make them aware of the promotions directly, 28% would feel “unhappy” if their loyalty was rewarded with mere discounts instead of VIP experiences such as access to new products and price getaways, and 55% would experience “irritation” if time-sensitive promotions were still available to others beyond the stated deadline, potentially damaging customers trust in a retailer.

Steve Grout, director of loyalty, Collinson commented: “Sales may be an attractive prospect in offering a short-term revenue boost for retailers, but in reality, they can have a much more detrimental impact on loyalty and the customer experience if handled poorly.”

He continues:“Using data effectively, retailers have never been more empowered to understand and meet their customers’ changing needs. There is no excuse to let personalisation slip – even during a sales period.”

“As the research demonstrates, failure to send relevant offers could cost a retailer the loyalty of nearly half their existing customer base. Retailers should be using their data on personal preferences and past purchase behaviour to customise the experience, rather than simply sending generic sales messages. In addition, showing favouritism to new customers, breaking the trust of loyal customers, and poor communication are all deadly discounting sins that could damage valuable relationships if retailers are too focused on a short-term win.”

Image credit: Fotolia 

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