If there is one industry that focuses on repeat purchases, it is the beverages industry. The ticket prices are low and margins are slimmer than any other industry. This means there’s a need for high volume sales. Volumes can be created by getting individuals to buy more per visit or getting them to visit more often, which is where a customer retention strategies come into play.
The drinks and beverage industry is extremely competitive. The customer retention strategies need to arm you against not just direct competitors, but alternatives as well. Stiff competition means beverage companies can benefit from customer retention strategies. Effective loyalty programs in the beverage industry are discussed below.
- Starbucks – Tier System of Rewards
Starbucks, the coffee brand, has one of the best customer retention strategies in the food and beverage industry. It has one of the best loyalty initiatives in the world. Starbucks does a fantastic job in motivating loyalty for customers. Starbucks uses premium rewards levels to incentivise customers. The use of tiers fits in well with Starbucks because of the brand image they have created.
These tiers motivate customers to shop more regularly to achieve the gold status. The best motivator in loyalty programs is not just the reward, but the journey, too. With their innovative customer retention strategies in place, Starbucks has even put together a loyalty explainer page and even a video tutorial to showcase the benefits of its customer loyalty program.
In the present social media and mobile marketing era, real-time meaningful communication between customers and businesses reigns supreme. This is why one needs to reintroduce oneself to existing customers and inspire repeat purchases. Bain and Company discovered that increasing customer retention rates by just 5% increases profits by 25 to 95%. This is not a small pay-off. Loyal customers make the best brand ambassadors and spend more cash on a long-term basis than newly acquired clients. As per the Gartner Group, nearly 80 percent of company revenue comes from 20 percent of the existing customers.
Global coffee shop chain Starbucks easily has one of the best retention strategies across the globe. What started out as a small startup is now comprising over 25K stores all over the world. In 2016 alone, Starbucks earned 21.32 billion in revenue. Other beverage chains like Dunkin’ Donuts have also vied for customer attention but Starbucks has managed to slide past competitors. The focus is on personalisation, excellent customer service and loyalty rewards program.
Starbucks provides considerable insights on how to keep existing customers loyal, satisfied and ensure a mutually beneficial relationship. Building a sustainable campaign that focuses on social media and other important communication channels is a must.
While customer retention methods need to be in place, it is important not to copy the competitor. While working in an integrated marketplace, you need to differentiate yourself. This is because the drinks and beverage industry is over saturated in terms of the competition. If one appears to be a follower, rather than helping the industry to forge ahead, customer loyalty will prove elusive. Getting creative with the actual product and related marketing strategies offers its own value. If you find ways to make yourself stand out and quality of product or service to back it up, you will keep your loyal customers in place.
- Jones Soda – Motivating Consumers to make the Purchase
Another important pointer is that data should never be ignored. Use customer loyalty programs to monitor customer behaviour. Tailor marketing and correspondence strategies to the kind of customer who becomes loyal. This fosters an understanding of how you fit into their lifestyle and provide incentives. This also works well if you are transparent in how you operate as customers are becoming increasingly aware of obvious ads and promos. A case in point is Jones Soda. This beverage company offers yet another example of a loyalty program carried out well.
Jones has performed the ultimate task of nurturing new loyalty members. Sending tailored email communications offer members over hundred points for joining alone. Jones therefore, demonstrates how important gaining customer information really is. When members join the program, it enables Jones Soda to market to them in the future, especially if the marketing program is engaging.
Another key area where Jones Soda excels is how they create a sense of community using customer retention programs. By selling soda online, Jones is aware they are asking customers to trust brand and product without tasting it first. While it is hard for customers to trust companies sans a reference point, they do trust other customers. Incentivising shoppers to share opinions with points creates an excellent conversation around the product and offers clients valuable social proof.
Giving program reviewers points and engaging on social media are just some of the ways Jones offers the best deal for program members. The social community builds a sense of trust in the brand. Previous customers love a product, so new shoppers can also gain evidence. With valuable rewards on the table, Jones Soda has taken full advantage of the power of brand advocacy.
- Tips For Beverage Companies
As beverage companies need to focus on selling high volume, the drinks industry needs to have as much information as possible about the customer. Bonus points are given to customers when they register for a customer account. This provides more information for marketing in the future.
#1 Reward Customers
Your brand needs to establish trust by rewarding customers to show prospects how amazing your product is. Reward points are used for actions like leaving a review, sharing stores on social media and even following social accounts. This ensures customers who have not tried products have the confidence to do so.
#2 Share A Percentage of Your Profits
Encourage customers to spend more by sharing a percentage of your profits as rewards. The reasoning behind this is simple. The more they buy with a purchase, the more value they reap from the reward. Keep the percentage reward lower than the average profit margin and it’s a win-win outcome.
Customer retention strategies can make a real difference to the sales volume, lead generation and other aspects of building a robust sales pipeline. Client retention strategies need to focus on creating a sense of trust and boosting brand authenticity, especially in the competitive beverages industry.