26 May 2020
Hitting their peak: How brands plan to retain new customers post-lockdown
Brands hope that with a mixture of top class customer service, constant newness and engaging content they can retain the swathes of new customers they have attracted since the lockdown began.
While many businesses have been forced into hibernation as a result of the nationwide Covid-19 lockdown, others are benefitting from a swell of new customers.
With many "autopilot brand choices" out of stock, consumers have been forced to buy substitute brands , return to products they haven't used for years, or start shopping from different categories. This has introduced new products to their "brand repertoire", explains managing partner at creative consultancy Brandon, Richard Taylor.
"A new habit may only be formed if we've purchased the same new product multiple times over multiple months and just how long probably depends on the role that product plays in our lives," he suggests. "It is more likely that people may stay with these newly tried brands if there is a noticeable functional difference such as taste, quality, nutrition or convenience."
The key to keeping hold of new customers gained during the crisis will be to drive mental and physical availability, says Taylor, using messaging that is distinctive and making the brand easy to buy.
"It is then a question of which brand owners are bravest and are going to invest in times of uncertainty as we plunge into a deep recession. That depends on the appetite in the boardroom and cash in reserve," he points out.
To manage demand, Gousto has created a waiting list of new customers.
One brand working out how to convert swathes of new customers is frozen food company Birds Eye. As well as families, the brand has attracted more 'empty nester' consumers and pre-family shoppers during the lockdown, says UK general manager Steve Challouma.
Speaking on a recent edition of Xeim's The Lowdown webinar series, Challouma described this influx of new customers as "fantastic", because they are usually lighter buyers of frozen food and tend to be higher income consumers. He believes it will be important to invest more in marketing to gain greater reach, while also broadening the media mix to span both family and adult-targeted programming.
As shoppers have rediscovered cooking at home, as well as shifted back to 'big shops' and accelerated their adoption of online shopping, there will be much for Birds Eye to learn about consumers post-lockdown.
Normally we have four or five key peaks across the year and we're basically operating at peak every day.
Kristof Fahy, Moonpig
Challouma anticipates a "lot of fine-tooth comb work" looking line by line at what products have sold well, combined with an analysis of category, EPOS and shopper data. He expects Birds Eye will sell larger volumes of big packs as consumers stock up their freezers, while ecommerce presents a "fantastic opportunity" to be creative by bundling products together.
Inevitably there will be a degree of simplification of ranges and giving more space on shelf to some of the blockbuster products within the category. We'll need to be able to respond from a promotions and pricing point of view to this recessionary environment, Challouma stated.
Is it better that we offer more everyday low-price conditions versus the volatility of deep promotion cuts? That's something that we'll work on over the next couple of months with the retail customers.
With high street stores still in enforced lockdown, online greeting card and gift company Moonpig has experienced a "significant increase" in customer demand during the Covid-19 crisis, with app downloads more than tripling. Welcoming a surge of new customers, while satisfying loyal brand fans, has proved a tricky balancing act, explains CMO Kristof Fahy. "These are unprecedented times. There wasn't a path laid out and every business has had to find its way," he explains. "Bottom line, you have to ensure the health and safety of all your staff, which is the most important thing. Then we started to ensure we had the right products and then simplified our products to ensure we could supply more customer demand."
The brand needed to manage consumer expectations, pushing back from offering next day delivery to delivery in five or seven days to ensure the supply chain could remain socially distanced. Fahy explains that the surge in custom has given the business "real energy" and reacting to opportunities in days - not weeks - focuses the mind.
Within days of the lockdown coming into force, Moonpig launched eCards, enabling consumers to send instant messages via email, and rolled out a 'stay at home range' of cards, which currently represents 10% of sales.
A design from Moonpig's 'stay at home' range supporting social distancing.
Overall frequency of purchase has increased, with the vast majority of business coming from everyday occasions such birthdays and anniversaries, as well as gifts - in particular flowers. Fahy says every category of the business is in "significant growth" and his team is "running at" the opportunity.
"Normally we have four or five key peaks across the year and we're basically operating at peak every day," he states. "That is a testament to the team at Moonpig that we've actually managed to do that not just for a week at a time, but effectively for almost a month now."
Fahy insists that the only way to retain customers going forward is to offer them an excellent experience from day one, which is why investing in customer care and CRM is key. The team works hard to ensure new consumers understand the "full Moonpig journey" and that they are consistently presented with new products to choose from.
Investments in getting the Moonpig app up to scratch will pay off when it comes to attracting and retaining customers post-pandemic, says Fahy.
"We've had a really good app product in play already and our job now is to keep optimising that product and making sure it can deliver the best customer experience,,, he adds.
"If we deliver that right combination of simple to use, easy to find what you want, great reminder service and an overall good customer experience we have a really good chance of retaining a huge number of these customers that have come to us."
HAVING A THREE-POINT RETENTION PLAN
Having operated in crisis mode for weeks now, brands are starting to imagine what life will look like once the lockdown begins to lift. Union Coffee marketing and ecommerce director, Kerttu Inkeroinen, has developed a three-point plan for retainingthe almost tenfold increase in new customers the company has attracted since the lockdown began.
The best way to retain customers is to ensure the first purchase experience is compelling, she says. For this reason, Union Coffee decided to streamline its range to ensure it could deliver on time.
"There's little value trying to go back to customers in a month's time and say 'Would you like to buy again?' if that first experience wasn't right," Inkeroinen explains.
"The second part of the plan is working on understanding this new customer cohort and who they are. What that customer looks like might be quite different to our customers in the past."
Union Coffee is considering new product offerings to appeal to new consumers.
The team are analysing data on the purchase preferences of this new customer cohort, as well as preparing a survey to gain a deeper understanding.
Aside from soaring coffee sales, the brand has seen demand for brewing equipment surge, which has prompted the team to consider creating starter kit bundles and experiment with coffee selection packs. Union Coffee has also experienced a rise in gifting, an insight the team has taken into their communications by encouraging customers to share a 'virtual coffee'.
Inkeroinen explains that Union Coffee wants to show it can be part of consumers' daily coffee routines, which means creating more content around its products, as well as telling new consumers more about the brand and its ethos.
"That goes from encouraging email sign-ups and social following to carving time out to build on our CRM and referral systems. With our products we are not looking for a one-off purchase. Coffee is a regular purchase, so it's looking at how we can build on that and be reactive," says Inkeroinen.
"Obviously there a lot of people working from home and that might change in a few months' times, which might change their patterns of coffee making at home. It's making sure we can keep offering something that they want and keep those habits even if the situation changes."
She is clear that the brand is not prepared to fight it out on price in a bid to keep new customers once the lockdown lifts, as that would not help Union Coffee build brand loyalty.
"We can't be competing on the price because we are speciality coffee and there are ethics behind it. It's now more important than ever to make sure the new customers are not just looking at the price point and coming to us on the offers, but that they are buying into the whole package of the brand," Inkeroinen adds.
Read the rest of the article and discussion on the Marketing Week website here.
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