How Your Existing Customers Can Help You Meet The Challenges Of COVID-19

How existing customers can help you meet the challenges of COVID-19.

We’re living in unprecedented times. COVID-19 has thrown up economic uncertainty that none of us were expecting to face this year. As the CEO of a scaling business, I understand only too well how plans and forecasts are being affected.

We made the difficult decision to begin working remotely before we were instructed to by the UK government, and the adjustment period – though smooth so far – has been full of learnings.

However, I can honestly say that I have never been more glad that my Co-Founder, Dave and I decided to build a business that centers around customer loyalty and retention. There may be little that I can do to help my staff,  friends or family in the current situation. However, I do believe that LoyaltyLion is in exactly the right place to help merchants around the world.

There is no easy way to predict how consumer behavior will change over the course of the coming weeks. However, there are some common themes surfacing from retail reports:

  • Firstly, with so many people socially distancing or isolating, screen time is increasing as people look to combat boredom. In fact, China reported that daily time with mobile internet rose from 6.1 hours to 7.3 during the quarantine period.
  • Secondly, to date, consumer confidence remains relatively high. 83% of consumers surveyed stated that they would continue to buy clothes online at the same rate, with 10% saying they would actually buy more.
  • Finally, customer acquisition costs across channels such as Facebook are getting steadily higher as offline stores focus more budget online. Typical acquisition channels are also falling in effectiveness as conversion rates change.

COVID-19 will not affect all merchants in the same way. Initially, sales may soar for those in sectors like groceries, health and household, pet supplies, and other everyday goods providers. However as people get used to a new routine, other sectors that saw an initial dip will start to pick up again – for example, fitness and gym equipment providers may spike as customers get used to working out at home. Similarly, fashion and jewelry stores may see more sales as people use their free time to shop online more.

Wherever you sit in this spectrum, there will be different points at which to ride the wave but at LoyaltyLion, we believe that your existing customers will be the key to your success. This is why.

The time to move marketing spend around

The effectiveness of typical acquisition channels such as PPC and Facebook advertising is likely to continue falling over the coming weeks. However, rising customer acquisition costs provide an opportunity for merchants to start experimenting with shifting their focus to retaining existing customers.

It’s a well-documented fact that it costs at least five times as much to acquire new customers as it does to retain existing ones. Even so, it can be difficult to take the leap and divert resources from the channels that deliver new customers, even when they do not deliver the greatest returns. Encouraging your customer base to return and repeat purchase rather than churning could pay dividends in countering rising acquisition costs.

Cash flow is king – focus on the highest returns 

Data from LoyaltyLion has shown that for most ecommerce stores, the top 20% of customers are responsible for over 50% of revenue. This insight can help merchants focus on marketing efforts and investment in the segment that will make the biggest difference to their bottom line over the coming weeks.

This is a chance to remind VIP customers that they are valued and that their loyalty will be rewarded if they continue to engage and spend. This customer segment will be the most impactful in helping you to keep your cash flow strong.

Where confidence is low, trust and advocacy is everything

Falling and spiking traffic is something we will see over the coming weeks. With experts predicting that there will be additional browsing but less buying as more people move into isolation, it’s a good time to focus on building trust. Existing customers are most likely to act as advocates and they can be easily motivated to leave online reviews and make referrals.

Your most loyal customers will be passionate, both about seeing your business succeed and cheering their friends and family by introducing them to products they love. It’s important to keep your program generous so that customers are more inclined to keep the advocacy coming. Having more social proof online during this period of increased traffic will help you draw in new audiences, whilst helping to boost conversion now and once the crisis passes.

In a crisis, community matters

Our research shows that almost 70% of consumers say their loyalty is motivated by the knowledge that a brand shares its values and beliefs. We see more and more stores building communities around their brand values, whether through the types of rewards they offer or the content they create.

Despite social distancing and isolation, a silver lining of COVID-19 is that globally, real-life relationships are strengthening and communities are coming together to support each other. The same can be true for brands that take the opportunity to communicate their beliefs with their existing customers.

This is an issue affecting everybody, and your customers are facing the same uncertainty you are. Communicating with sympathy and empathy is vital to strengthening relationships and creating a sense of community at a time when consumers need something to feel connected to.

Offline moves online

With many governments now enforcing the closure of shopping malls and retail outlets outside of grocery stores, Darwin’s famous quote is becoming very relevant.

“Those who survive are not the strongest or the most intelligent, but the most adaptable to change.”

For many businesses, it is now necessary to close physical stores and move their operations entirely online. While this may appear an initial headache both in terms of logistics for those businesses, and competition for existing online merchants, it also represents a longer-term opportunity. This is a trend that could very well persist once COVID-19 has passed, and as these changes force new consumer habits to form, we may see a permanent lift in ecommerce sales across the board.

These are just a few of the ways that I believe focusing on retention can help you not just to deal with whatever the next few weeks might bring, but to thrive as we come out the other side. To quote Rudyard Kipling,

“If you can meet with Triumph and Disaster, and treat those two imposters just the same.”

Our businesses are currently being tested in new ways, but we are learning lessons that we will carry forward when we return to normal ways of working. Whilst this period will continue to challenge us, I believe that LoyaltyLion will come out a stronger company that can better serve its customers. I hope the same is true for all our merchants.

LoyaltyLion is standing by to help wherever we can. If you’re an existing customer and you need to discuss how to adapt your program for COVID-19, don’t hesitate to contact If you’re not yet a customer but want to talk about any of the retention strategies in this post, then get in touch with one of our team.

This article originally appeared in the LoyaltyLion blog and has been published here with permission.

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