I'm super proud to announce the release of our first white paper, 'The Tipping Point of Loyalty'. Great work from Sam Short, Chief Data Scientist at Upside, and nearly a dozen retail industry experts.
Find it here: The Tipping Point of Loyalty Report.
We live in a world where everything is at your fingertips. There is so much choice, and so little friction to purchase.
This is great for us as consumers, but the job of the retail marketeer is so much harder.
The battle for consumers’ time, attention and loyalty is fiercer than ever before.
Upside has a unique vantage point on these issues. Through our technology, we
analysed the complete spending habits of a sample of 7,500 consumers to understand which retailers they shop at, how frequently they shop there, and how much they spend.
We’ve analysed this spending data in depth, which you’ll see later in this paper, but also conducted over 120 conversations with large national retailers in the UK over the past 18 months. The feedback has been consistent:
• Customer loyalty was heavily affected during lockdown and is now harder to get back
• National lockdowns have made it harder (if not impossible) to plan
• Customer Acquisition Costs (CAC) have gone up
• Competition over the same scarce resources has increased. The impact of Brexit and Covid on supply chains has been fundamental
• The focus is on quality of sales and margins, not just the sales volume.
None of these challenges are new; in one form or another, retailers have been faced with these challenges before. What has changed is the data and methods available to them to tackle these challenges.
Most retailers would have largely relied on the intuition of very experienced traders, buyers and marketeers to see them through times of crisis, using smart product choices, hard-nosed supplier negotiations and innovative marketing campaigns.
We typically see companies in one of these three stages of maturity:
Those at the “entry level” in their marketing journey measure and optimise
their customer acquisition costs or CAC. Whilst this is an important measure
of the success of individual one-off campaigns, it does not optimise value for
your business. Businesses in this phase typically spend a lot on recapturing the
same customers over and over.
The next stage in development we see is when retailers become more
sophisticated both in terms of their marketing, but also in terms of
understanding customer behaviour. The focus shifts to retention. Metrics
like cost of retention and retention rates are tracked. Campaigns are designed
to drive repeat shopping in an attempt to increase the customer’s tenure with
The most sophisticated marketers and retailers are those that are measuring
share of wallet (SOW) and customer lifetime value (CLTV). Some retailers have
achieved this level of sophistication, and those that have find themselves
paying for expensive consultancy services to provide this data periodically.
Even for the Retailers measuring SOW and CLTV, only a handful are able to
actively take action on these insights. Now, in 2021, there are additional tools available to the forward thinking retail executive.
Open Banking data, and later Open Finance data, has the ability to give retail execs the ability to have an accurate, real-time view on the landscape of consumers.
Not only are they able to analyse their own customer behaviours, but also the behaviour of consumers that are:
a) Not yet their customers
b) Typically infrequent customers
c) Incidental customers
Share of Wallet, loyalty levels, CLTV are not new. But retailers now have:
- The ability to quantify exactly how much each customer is worth to them: Not just based on how much consumers spend in their own stores, but the total wallet value of a customer across all their spend in your category.
For example, our analysis has found that a retailer’s most loyal customers, who we term in this report as their “VVIPs”, usually spend between 10 to 30 times more, annually, than those customers that aren’t particularly loyal to your brand.
- The ability to target and attract potential VVIP customers Upside’s customer spend data enables retailers to understand which customers are high spenders in their category, but not yet shopping with you. Using this data, we’re able to provide retailers with a way to move their customers through the “loyalty journey” and create more VVIPs.
What you’ll learn:
In this white paper we will explore:
- What’s the “tipping point of loyalty” for your customers - what number of
purchases and level of spend does it take to move a customer to become “loyal”
to your business
- How much more valuable a loyal customer is than someone that infrequently
shops with you - “loyalty driver”
- How consumer behaviour differs online vs offline, and
- What loyalty looks like within the different retail verticals / sectors
Armed with these insights, and with access to spend data like this in your own
business, you’ll be able to:
- Know the value of your customer
- Spend your marketing budget selectively on the high value customers
- Apply the minimum effective dose of loyalty incentives to keep your most valuable
customers (VIPs and VVIPs) loyal to you
In each section, look out for the ‘Actionable Insight’ - this is where I will highlight the key steps to take.
a) Actionable insights
b) Get in touch
Send us a quick email and we’ll gladly work with you to unlock this value for