Customer loyalty is share-of-mind rather than share-of-wallet

I am not a hoarder by nature and love quality things. My strategy is to give one thing away if I buy something new. But I must confess, I have one frailty – I am crazy about hand painted silk scarves. I remember my mother wearing those smooth, luxurious strands of art, and me – dreaming of my own little collection. I consider it a treat, so my purchases are rare but that doesn’t stop me from visiting boutiques once in a while and browsing web stores several times a week. And that’s what bugs me sometimes…  I feel under-appreciated as a customer by all those stores I frequent. At least in my mind I’m an avid fan but it just does not seem to register on them.

To put it in perspective if I walked past the same display twelve times a week in the store, surely a salesperson would reach out.  What does it take for a girl to get some attention (and a special offer :-). That is the thought behind this article – my loyalty is not about the share of the wallet, but about share of the mind. I really think if these guys knew how badly I covet scarves, it would be such an easy sell. All I need is a little prompting.

Why retailers should measure share of mind on digital channels?

Retailers have always understood the importance of footfall. Here’s how Ipsos defined it in context of bricks-and-mortar stores:

  • Conversion rates – know how many of your customers actually generate sales.
  • Marketing effectiveness measurement – know which strategies are driving most sales.
  • Shopper behavior – identify trends and timing of the highest performance.
  • High performance location – know which stores have higher conversion rates.

Extending these measurements to the digital channels helps a retailer understand:

  • What is the digital path of the customer leading UP to the sale?
  • What is the digital activity of the customer FOLLOWING the sale?

Why does it matter? Here are some research findings.

  • multichannel-journeyGoogle’s research  shows consumers take a multi-device path to purchase. The graphic on the right illustrates the typical journey. The numbers are from 2012 but the current ones are even greater for mobile!
  • Forrester research shows that  51% of older (35-44 year old) consumers are using mobile for a product research as part of the purchase journey. If the retailer cannot trace the role and the contribution of the channel in the consumer journey, then the marketing is skewed towards the last click on the journey.
  • Getting customers to purchase again is 5-7 times less expensive than a search for a new customer. Industry research suggests that a retailer’s customer retention is 27% on average. What’s your metric? If it’s less than 27% you are probably like those boutiques who are missing the opportunity with me.

How to measure digital footfall?

If you are struggling to capture the customer’s digital footfall – across platforms and marketing channels – click on the button below for a demo. Like the best things in life, it’s free.

Photo by Morice Young Design Attribution 2.0 Generic (CC BY 2.0)

Leave a Reply

Your email address will not be published. Required fields are marked *