Electronic Retailer - October 2011 - 35

Considering the amount of money spent on upsells and impulse buys every year, however, it’s clear that there is indeed a method to the madness. As consumers, we’re willing to consider additional purchases as long as the value is clear. The rapid ascension of mega-deal and social couponing sites is a great example. It speaks loudly and clearly to the idea that people love a deal and will pay extra to get it – even though the deals are really just coupons they’re paying for. It’s a changing tide in the upsell niche, with higher standards, and it has some interesting implications for revenue and retention. Give customers value, even if they have to pay for it, and they’ll become loyalists for your brand.

which to share their good experiences. The typical Facebook user has 130 friends and the average Twitter user has 120 followers; both networks are full of people publicly thanking companies that do well by them. The new defining rule is value. If we’re going to ask consumers to open their wallets again and again, there has to be something meaningful in it for them. Yes, “selling with style” can still get you a few extra bucks, but delivering the substance is what ultimately wins over the customers most likely to deliver sales well into the future.

The Changing World of the Discount Club
For a time, there were questions in the electronic retailing industry as to whether or not loyalty was even relevant. Now the question is less about relevance, and more about how to make it worth the time and effort. Increasingly, the answer lies in upsell programs designed to build loyalty and engagement for retail brands. Discount-based loyalty clubs offer immense potential for a number of reasons. Supersavers everywhere are buying offers, demonstrating their willingness to pay a little for a whole lot of value in return. Plus, the bulk of the value received by club members is actually funded by the merchants themselves in the form of product savings. It’s an arena ripe for upsells, where third-party loyalty companies manage the merchant relationships in a product format that puts the organization’s brand front and center. When these customers use the programs, they see the value and will indeed pay for it – a clear illustration of “winning” in the new consumer-owned society.

So how do you capitalize on the trend and gain customer value in the new mobile universe? Create a loyalty club that offers benefits via mobile phone. For young consumers in particular, printing and redeeming a coupon has a stigma that mobile coupons do not have. For them, it’s cool to whip out their phone to get the deal. This works to retailers’ advantage. Merchant-funded offers can be bundled into private-label mobile apps that come with the “show your phone” redemption. As with traditional discount clubs, these are typically managed by a third party. By packaging mobile products like these in your upsells, you’re not just moving discount clubs, but you’re creating daily, positive experiences with your brand.

Loyalty Enters the Picture
Historically speaking, loyalty hasn’t always received a lot of attention among direct-to-consumer (D2C) electronic retailers. More often than not, it has been the acquisition, the transaction, the sale that matters – not necessarily a long-term customer relationship. But even in the D2C space, times are changing. Economic pressures are demanding more emphasis on the lifetime value of the customer. Sales are down, acquisition costs are up, and profit margins are thin. Does this mean the sales culture is somehow out of touch? Not remotely. It just means it may not be enough. Thanks to a focus on relevance and technological convenience, new opportunities now exist to extend your LVC, simultaneously boosting your average sale while earning strong measures of customer engagement, gratitude and loyalty.

Some Old Rules Still Apply
Most of us are not mobile application developers or loyalty marketers. Yet it’s still within our grasp to have a great experience with our brands on mobile devices, and we can still build loyalty through engagement. We do know there is a need for more revenue and a way to stay in the good graces of our converted customers. The best way to do this is strictly cater to their whims and offer something with truly relevant value. Even then, retailers still have to rely on customer acquisition strategies and smart, proven sales techniques. There will always be a need for understanding the customer, communicating your product’s benefits and delivering a strong call to action. Yet by focusing upsell efforts on something that has a clear, ongoing value, retailers stand to reap not just profit, but the ongoing purchases by a lifetime customer. It’ll put recurring revenue in the pockets of both retailer and customer, and it will put an end to the upsell cycle of cynicism. Casey Kleinman is the president of Access Development, a company that has provided upsell and incentive products to the electronic retail industry for more than 25 years. He can be contacted at casey.kleinman@accessdevelopment.com. 35

Value is the New Rule
We now live in the golden era of the consumer. Information is ubiquitous, and choice is everywhere. In the battle royal for their disposable dollars, buyers now make the rules – and companies that break those rules face summary judgment and public excoriation in online reviews, among mommy bloggers and on Facebook – just to name a few. On the bright side, loyalty offers longterm dividends like never before. Your customers now have online networks in

Monetizing M-Commerce
Another way to get close to the heart of a customer, literally, is to create a positive brand experience on their smartphones. In fact, 90 percent of the mobile phone-carrying population keeps their devices within arm’s reach, even while sleeping. Other studies show that 78 percent of customers look for savings opportunities on their mobile devices when shopping.

October 2011 | electronicRETAILER

Electronic Retailer - October 2011

Table of Contents for the Digital Edition of Electronic Retailer - October 2011