Another month has passed with social distancing, working from home and Zoom quiz nights having become the everyday way of life. But what does another month of data tell us about customer loyalty and how your ability to retain valuable customers is being impacted by the ongoing COVID-19 situation?
Last month we brought you four key findings from loyalty data taken from over 600 stores:
- At the end of March, your loyal customers remained your most reliable source of income and as such, deserved a large focus within your marketing strategy
- Customer lifetime value was still your guiding light, with the AOV of loyalty program members remaining 20-30% higher than guest checkouts
- Loyal customers were – even more than pre-COVID19 – a cost-effective acquisition channel, with an increased propensity to leave reviews and make referrals
- Despite more time to browse and shop around, consumers were still open to building relationships, but brands were to failing to kickstart those connections, with fewer customers taking the time to create an account in March
So what does the data from April tell us about customer loyalty during COVID-19?
Your existing loyal customers
In March, we reported that the number of members making orders had remained steady throughout the month, despite global uncertainty. We also found that member order counts were 22% higher in the last week of March, than the last week of February.
In terms of loyalty program engagement, we reported that despite fluctuating through March, the number of points being earned and redeemed rose to 5% and 11% higher, respectively, by the end of the month.
What does April show?
The good news continues here, as loyal customers bring steadily more and more value to stores.
- The number of orders made by loyalty program members was consistently far higher in April than in March.
- In fact, member order count for the last week of April was 44% higher than the last week of March.
- Loyalty program engagement also remained positive. The number of loyalty points earned continued to rise throughout March. Having ended March 5% higher than the last week of February, the number of points earned rose by a further 29% by the last week of April.
- Similarly, the number of points that program members redeemed grew very positively. Having ended March 11% higher than the last week of February, the number of points that loyal customers redeemed rose by a further 20% by the last week of April.
Customers are still shopping with the brands they know and love, and are continuing to engage in loyalty programs despite the ongoing COVID-19 situation.
The lifetime value of your customers
At the end of March, we reported that loyal customers remained more valuable, with the average order value of program members remaining between 20 and 30% higher than those of guest shoppers.
What can we learn about customer lifetime value looking at data from April?
- Despite order numbers steadily increasing throughout April, average order values of both guest shoppers and loyalty program members are yet to recover to where they were in the last week of February.
- However, the average order values of loyalty program members, which remained consistently between 20 and 30% higher than the average order values of guests in April, are still considerably higher. In the last week of April, members still have an average order value 25% higher than at the end of February.
Your loyal customers are worth more to you than any new customers you have acquired over the past month, and your retention strategy should reflect that.
Your loyal advocates
Last month, we reported that customers were actually showing a greater propensity to act as advocates, with the number of program members leaving reviews and making referrals increasing by 26% and 33% respectively.
Has that willingness to act as an advocate changed in April?
- The average number of reviews that were rewarded with loyalty points in April rose considerably higher again, with the last week of the month seeing an increase of a further 34%, reaching 58% higher than the last week of February.
- The average number of members that were rewarded for making referrals also rose significantly throughout April. By the third week of the month, when compared to the last week of February referral activity had increased by 72%, reaching as much as 105% higher by the last week of April.
Your customers have become more and more willing to use their newly found spare time to advocate your brand. This is an opportunity to make the most of as it will pay dividends in future.
Connecting with your new customers
March data told an interesting story that although the number of members signing up to loyalty programs had been steadily increasing, the proportion of new customers who were taking the time to create an account had fallen. By the end of the month, the number of guest checkouts creating an account had fallen by 10% compared to the end of February.
Has this story changed in April?
- The number of new members signing up to loyalty programs has increased significantly in April, reaching 37% higher than the end of March, and 63% higher than the end of February.
- However, the proportion of new customers becoming members has remained lower than it was at the end of February. There is, however, a positive trend with this number improving week by week to reach just 2% lower by the end of April. This suggests that more stores are taking the time to encourage new customers they have acquired to connect and create an account.
Consumers are still willing to connect with brands and share their data. Brands are getting better at encouraging customers to kickstart relationships, but should still focus on implementing initiatives to ensure that newly acquired customers can be communicated with longer-term.
Though ecommerce stores are undoubtedly seeing the impact of changing consumer behaviors, when it comes to your existing customers, the news remains positive as loyal shoppers continue to spend, engage and advocate. Stay tuned to see how this changes in May.
Do you have questions on your own loyalty data or how to adapt your existing retention strategy? We’re here to help – just book a time to chat with one of our team.
In order to provide the most useful observation of the ongoing impact of Covid-19 on customer behaviors, this dataset features the same cohort of 634 stores being tracked across a timeframe which began on February 24th (week 0). This is a trend analysis comparing each week of March with the final week of February rather than a year-on-year comparison, using means with 5% of outliers excluded for each metric. All data has been converted to USD, using the March 1st 2020 exchange rate.
This article originally appeared in the LoyaltyLion blog and has been published here with permission.