"One unhappy customer tells ten more". You've probably heard this phrase before, and with good reason: building customer loyalty is a major challenge for any brand seeking to sustain its business in supermarkets. But while supermarkets guarantee maximum exposure for brands, being able to "keep" your customers is another matter altogether! In fact, your competitors are also aiming to win over and keep their target consumers, and you have to deal with private labels.
So how can your brand build customer loyalty in the retail sector?
That's what we're going to look at in this article. We'll start with a reminder of the fundamentals of customer loyalty, for those of you who were at the back of the class in economics! Then we'll get down to the nitty-gritty, reviewing the main strategic areas that every brand needs to master in order to defend its customers in supermarkets.
A loyal customer is generally defined as one who continues to make purchases or use a company's services on a regular and consistent basis over an extended period of time.
This type of customer is often considered valuable to a company, as it contributes to the stability of its revenues and can also generate positive word-of-mouth, by recommending the company's products or services to others.
In addition, loyal customers tend to be less sensitive to price fluctuations and more willing to try out new products or services offered by the company.
Customer loyalty is based on various criteria that determine the strength and durability of their relationship with a brand:
Marketing theory recognizes three types of customer loyalty:
Understanding these three approaches is fundamental to market positioning. The retail sector is subject to fierce competition, which also includes the brands of the distributors themselves. Induced loyalty is therefore almost impossible to achieve for most brands, so they try to differentiate themselves, or work on niche or future markets.
But that's easier said than done!
Sidely offers you the opportunity to delve deeper into the key areas for improving customer loyalty.
Now that we've identified the different types of loyalty, we can turn our attention to corporate strategies that align with customer expectations to create a lasting affinity with the brand.
Here, the most appropriate tool is generally the Porter strategy.
Porter's theory, named after its inventor Michael Porter, proposes that companies can gain competitive advantage by adopting one of three generic strategies:
To apply Porter's strategy successfully, you first need to identify your strengths and weaknesses, as well as those of your competitors, and understand your customers' needs and preferences in the marketplace. Porter's approach enables your brand to find a logical positioning in its market, a sine qua non for building customer loyalty over time.
This positioning will also help guide the development of new products. If you have an extensive range, it's a good idea to include a product of the future: it's not destined to account for the bulk of your current sales, but its innovative nature will position you in tomorrow's market. Find out more about how to define and adapt your product range.
Once your brand's market positioning is clear, it's up to communications to take over. The aim is for shoppers to resonate with this brand identity and make it their own. Studies show that consumers are becoming increasingly attached to the emotions they feel at the point of sale, as advertising has done much to associate well-being with consumption.
Brand universe and communication are thus key elements in building customer loyalty for a brand selling in supermarkets. This includes all the visual, sensory, emotional and symbolic elements that define a brand's identity: logo, colors, typography, but also values and corporate philosophy. The aim is to create a consistent, distinctive experience for customers at every point of contact with the brand, whether in-store or online.
Communication then helps to reinforce brand recognition and create a consistent experience for customers, but also to create an emotional attachment and a relationship of trust between your brand and its customers.
If you're looking for loyal customers while addressing the market indirectly, it makes sense to first assess your distributor's ability to retain customers! That's why, if you've opted for a selective distribution strategy, loyalty capacity can be one of the factors to take into account when choosing your commercial partners.
In this instance, the major French retailers have experimented with various tools inspired by the American market, such as loyalty cards, bank cards and other financial services, and even monthly subscriptions giving discounts on every purchase.
These tools also bring another major advantage to the retail giants: as we mentioned earlier in connection with the gigogne assortment, retailers are increasingly using digital contact points at the point of sale to massify data analysis, enabling them to identify specific profiles of typical consumers. In this way, retailers can tailor their listing policies to increase the average basket and repeat purchases. In short, big data enables retailers to improve customer loyalty by analyzing their behavior on the shelves!
So remember to go into this subject in greater depth in your discussions with national and regional buyers. Negotiating sellouts is important, but don't stop there, and try to decipher your distributors' strategies to take advantage of their loyalty strategy.
And if you're working with independents, don't forget that they often have quite a bit of freedom when it comes to sourcing. This means you can share your data with store managers to encourage them to list your products or give them greater prominence on their shelves. The logic of trade marketing is to be able to win together... It's up to you to make them understand that it's in their interest to work with you to implement the best loyalty actions!
Finally, don't forget to include the loyalty factor in your risk of discontinuation. For some brands, a change of distributor means starting from scratch in terms of brand awareness, which in turn means high advertising costs to get your new customers to know you!
Retail is not an enchanted world, and retailers are often reluctant to share strategic data with you, precisely because it gives them a significant advantage in annual negotiations. That's why you also need to develop your own digital strategy.
And the main advantage of digital is precisely that it enables you to pursue all the marketing objectives making up the AARRR matrix, and representing the different stages of the marketing funnel:
And as we'll now see, all your digital actions can strengthen your brand's customer loyalty, and lead to more in-store sales in the long term!
Social networks are an extraordinary vector of popularity: even if you're not a burger aficionado, it's hard to miss Burger King's communications, so much so that the brand's marketing efforts allow it to be talked about on the networks. This reasoning also applies to retail brands: by being very active on your customers' favorite platforms, you rekindle memories of your brand and influence their purchasing process the next time they store in store.
But social platforms also help us understand how to improve customer loyalty. In fact, your shoppers don't hesitate to give their opinions on the web. For your brand, it's a simple way to assess customer satisfaction, but also to be proactive by adopting the right reactionary strategies to these words: get involved in discussions, respond to comments. Digital technology also offers a unique way to stay in touch with what's being said about your brand. It's called social listening!
Social networks and websites can also be used to organize contests or special events to raise brand awareness: in a multi-channel marketing approach, combine your online and offline operations to increase their reach and generate more in-store sales.
Remarketing, also known as retargeting, is an effective marketing strategy for strengthening the relationship between a brand and web users. The use of web beacons enables you to deploy advertising campaigns to Internet users who have interacted with your tools (websites, social networks, etc.). This technique, also known as retargeting, can help to keep the relationship with your brand alive in a variety of ways:
This makes your online marketing an extremely powerful loyalty lever. Costs per point of contact are much easier to measure than with traditional media such as television. And above all, you're in control of the data you collect, and can support your in-store sales with actions over which you have total control.
⚠️ Email retargeting only works if visitors to your website have consented to give you their email address, in order to comply with the General Data Protection Regulation (RGPD). Since the implementation of the RGPD and on the recommendations of the CNIL, websites have had obligations with regard to cookies, in order to safeguard the personal data of Internet users. Find out more about your obligations in terms of transparency and data retention.
In the final analysis, loyalty lies in the quality of the relationship between the brand and its customers. That's why brands have every interest in studying the various actions that impact customer relations. This is known as FDRC, for customer loyalty and relationship development. Digital tools offer tremendous opportunities to accelerate the dialogue between your brand and its customers.
And after-sales service is no exception, with many companies now handling customer requests via Whatsapp or Messenger channels, for example. In general, these channels have the capacity to accelerate and streamline customer relations. In fact, the quest for greater efficiency is driving some brands to implement chatbots.
Old but gold! This is probably the most timeless item on this list, and one that will always work: setting up attractive loyalty programs. Offer rewards, discounts, points accumulated with every purchase, or other exclusive benefits to build customer loyalty. There are numerous reward programs to encourage your customers to buy again: collectable items, the chance to take part in a prize draw, or the accumulation of points leading to the dispatch of a gift after a certain amount has been spent. As mentioned above, multi-channel marketing can help to converge physical and digital contact points.
This technique increases your customers' repeat purchases, and you can also add specific promotions, such as discount coupons on the purchase (BRI) of other articles from your brand in the same product range. In this way, you can boost your sales and introduce your customers to products they wouldn't necessarily buy on their own.
To deploy the right customer loyalty systems, it's important to be able to assess the strength of customer loyalty.
While mystery shopping has lost none of its in-store appeal, brands can now use their own digital channels to get answers fast, and without having to negotiate with their retailers.
The Net Promoter Score (NPS) remains an essential tool for measuring customer satisfaction and loyalty to a brand. It is based on a simple question: "To what extent would you recommend this brand to a friend? To find out more, read our article on Net Promoter Score.
Websites, social networks, emailing and other digital platforms can all be used to set up satisfaction surveys, which can be used to gather opinions but also to ask your customers specific questions (surveys are a good example), or to ask them in an open-ended way: "What could be improved for etc.?
Reminder shots
Before saying goodbye, let's remind ourselves of two points to keep in mind:
📉 Promotions: if there's one bad reflex that needs to be eliminated as a matter of urgency, it's the systematic use of promotions to build customer loyalty: if all players start lowering their prices, the whole market will decrease in value, dragging down manufacturers' margins with it! What's more, once consumers have become accustomed to low prices, a return to more remunerative prices for your brand will often be perceived as unjustified by customers. In short, there are plenty of good reasons to launch promotions, but loyalty isn't one of them!
🛠️ Quality control and compliance: when you sell your products to mass retailers, design errors can have serious consequences (for food products, they literally involve health risks). To protect consumers, avoid the risk of bad buzz and preserve your image in the long term, make sure you excel in quality control and master recall procedures in the event of a detected risk.
