It’s impossible to turn on the television or log on to your computer without hearing about COVID-19 and the impact it’s having around the globe. Less mentioned is the effect this pandemic is having on consumers.
It’s imperative now, more than ever, to decrease costs for your customers during this crisis. People have a lot on their mind at the moment, and pacifying their worries can generate customer loyalty that will carry on long after this crisis has passed.
If you don’t know where to start, here are some strategies you can use to start developing customer loyalty through cost savings:
1. Use a GPO or other group purchasing strategy to decrease COGS.
Some companies form partnerships with other companies to increase their buying power; others rely on a group purchasing organization to decrease the cost of goods. These groups allow you to make purchases at a lower cost using a bulk discount, even when you don’t need to buy large quantities.
Joining forces with other organizations allows you to take advantage of the discount without being forced to buy more than you need and sitting on inventory. Cutting costs for your business means cutting costs for your customers.
2. Implement a loyalty program.
A 2018 IRI Consumer Connect survey determined that 74% of consumers are more likely to choose a store that has a strong loyalty program. These programs save money for both customers and businesses. Many studies indicate that retaining a customer can cost five times less than acquiring a new one. Repeat customers can then enjoy savings by continuing to shop with your business.
A good loyalty program is easy to apply for and free to use. Complicated processes and extra charges will deter prospective customers from joining. The easier it is to access savings and benefits, the better. Start with a low-tier, entry-level reward that can be built upon through steady interactions with your business. Customers appreciate user-friendly programs, and they’ll stay with your company if there are increased savings available.
The hospitality sector is a great example of an industry that takes advantage of loyalty programs. Joining is free, and first-time members typically get rewards simply for signing up. From that point on, they acquire points with every stay at hotels or resorts; the more stays they accrue, the bigger the bonuses they earn. This model maximizes the return that a frequent customer receives, and it’s an attractive option for occasional travelers as well — it’s still “something for nothing.”
3. Offer a subscription model.
There are certain products that people will buy repeatedly. Oftentimes, there’s not only a preferred product, but also a preferred brand for that product. A subscription model can help save customers time and money by allowing them to make upfront purchases that they’ll receive periodically throughout the year. This eliminates the need to go online or go to the store to make a purchase every time they’re running out of product. Signing up for a subscription is easy, and finding your favorite item on your front porch every month is much easier than making multiple shopping trips.
The subscription e-commerce market grew more than 100% between 2013 and 2018, making it a service more and more people are willing to consider. Different subscription levels ensure that each consumer is restocked exactly when he needs it. Different subscription packages can also deliver value and convenience for customers who hate shopping, for example, or love trying new wines but know nothing about them.
4. Save your customer time.
Time is money, and it’s important to value your customers’ time. You can use the “speedy meeting” function through Google Calendar to shorten all your meetings by 15 minutes; you can also shift your default meeting time from 30 minutes to 15 minutes to block off less time. People get in the habit of blocking off 30 minutes or an hour, but that amount of time often isn’t necessary. If you offer the time, however, most things expand to fill the time given — and that’s time you and your customers could better spend elsewhere.
Customers will also appreciate knowing you value their time as much as they do. Knowing that your business provides efficient, high-quality service is a great incentive to return. Keeping your customers happy and eliminating wasted time saves everyone money. Time is money for your business as well — use these tactics to more efficiently gain loyal customers, and you’ll both benefit.