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Loyalty Marketing

Loyalty Programs: What is the Return on Investment (ROI)?

Here's how to calculate the return on investment of your loyalty program. Calculate the expected ROI of your loyalty program, or your past ROI.

Francesca Nicasio

Content Strategy Manager

Every business owner understands it’s easier to retain an existing customer than to acquire a new one. That’s why many merchants use loyalty programs to incentivize customers to come back and spend more with them. When done right, loyalty rewards, discounts, special early access, etc. can help to drive incremental revenue and maximize your customer lifetime value (CLV).

All that being said, it’s important to remember that loyalty or reward programs are long-term undertakings. Yes, they’re super beneficial to your company, but to reap those advantages, you need to periodically evaluate your loyalty program performance. Some consider loyalty programs to be money pits — and they can be if you don’t keep track of your loyalty program ROI.

So, let’s back up a bit: return on investment (ROI) is a financial metric that evaluates how profitable an investment is. To calculate the ROI, you need to divide the net profit by the cost of the investment, and express it as a percentage. The greater the ROI, the more profitable the investment.

To get a handle on your loyalty program’s success, you need to measure its ROI. The results will help you decide if your loyalty strategy is working or not. If it’s working, you can continue what you’re doing and double-down on your initiatives. On the flip side, you can rejuvenate poorly performing loyalty programs by optimizing offers, running referral programs, or getting customer feedback.

Listen to this post instead:

 

 

How do I calculate ROI for my loyalty program?

As with any business initiative, the success of a loyalty program can be measured by its ROI. The formula to calculate it is pretty straightforward.

Return on Investment = (Total Revenue - Total Cost of Running the Loyalty Program) / Total Cost

download free loyalty program roi calculator

Loyalty program ROI calculation: A real-life example


Here's an example from a merchant we have been working closely with. I'm not going to share their name, but I can share their anonymized results so you can see how we assess the impact of their loyalty program.

Real life example (1)

Challenges in measuring loyalty program ROI

The formula for calculating your loyalty program ROI is simple enough to understand. However, there are a few challenges that can make it more difficult to accurately measure your ROI.

Attributing revenue to the right sources

One of the biggest challenges lies in capturing key metrics and pulling the necessary data from various sources — such as your marketing, sales, finance, tech teams, etc. You need to make sure that you’re attributing your revenue gains to the right sources.

For example, your regular customers are your most valuable ones, with or without a rewards program. How can you be sure their value is attributed to your loyalty program?

It can also be tricky to figure out if a purchase was triggered by loyalty program benefits or if it’s just a customer’s normal buying behavior. You need to have the right tracking mechanisms in place to be able to accurately calculate a loyalty program’s ROI. 

Some of the ways to do this include using robust loyalty apps (like Marsello), discount codes, coupons, etc. to track customer behavior that can only be attributed to loyalty programs.

With Marsello, you can track the metrics like change in repeat purchase rate and increase in turnover from loyalty members, as we've done above. This will get you a much more accurate picture of your return.

It takes time to see results

Not only will you need considerable time to gather the data required to calculate the ROI, but it may also take time for your points programs to show results. Customers must first be aware of such programs, engage with them, and rack up enough points on their loyalty cards. It may take months (or more) for your loyalty program to start paying off, so you won’t know your true ROI right away. 

💡 Pro tip: Rather than committing to a 3 month trial across all your sites, commit to one site for at least 1 year (expanding to other sites if you see results earlier). Starting with fewer sites but allowing for a longer time period will give you a much better indication of the impact of the program for your business.

Metrics to consider when measuring the impact of your loyalty programs

Beyond the ROI calculation above, there are many ways you can measure the impact of loyalty programs. You can look at how they affect your revenue, customer base growth, and engagement, among other things.  

You could choose to measure success purely based on financial returns or through KPIs such as engagement rate, brand awareness, etc. Here are some of the data points you may need to track.

  • Transaction volume
  • Average order value
  • Total revenue
  • Cost of loyalty program memberships
  • Marketing cost
  • Purchase frequency of members and non-members

The key is to track these over time. Remember, it takes time to build loyalty, so running a successful rewards program is a marathon, not a sprint. 

And before you calculate the ROI of your loyalty program, make sure you’re clear about your business objectives. What are your specific goals? Do you want to increase revenue by a certain percentage? Reduce your marketing expenditure while boosting sales? Grow your repeat customer base?

This will be essential for setting targets for your loyalty program and understanding its impact on your bottom line.

download free loyalty program roi calculator

Direct ROI of loyalty programs

Direct loyalty program ROI can come in several forms, including:

Increased sales and revenue from repeat purchases

A loyalty program can significantly contribute to a business' goal of increasing revenue and profit. According to a 2023 report by Gitnux, the likelihood of selling to a new customer is less than 20%. Conversely, this probability rises to nearly 70% for an existing customer.

By enhancing customer satisfaction, fostering brand loyalty, attracting new customers, and gathering important customer data, your loyalty program can lead to tangible financial gains. You can also make informed decisions about product development and marketing strategies, further amplifying revenue.

Ultimately, loyalty programs serve as strategic tools for driving sales, revenue growth, and long-term profitability in any business endeavor.

Just ask Scotty’s Makeup & Beauty, which was looking for an email marketing solutions provider when it came across Marsello. Very quickly, the business realized the full potential of Marsello’s tools and decided to also set up loyalty programs. This resulted in Scotty’s Makeup & Beauty unlocking new audiences, increasing its customer engagement, and doubling its revenue.

scottys-makeup-and-beauty-discount

Reduced marketing costs through targeted promotions

Acquiring new customers through marketing efforts and sales outreach can be resource-intensive, consuming both time and funds. Customer acquisition costs pile up especially when leads opt for competitors.

Since loyalty programs help drive sales from existing customers, they enable your brand to mitigate the expenses linked with customer acquisition.You spend less to drive sales, which leads to a higher bottom line.

Indirect ROI of loyalty programs

Now that we’ve covered the direct ways to measure ROI, here’s a look at the indirect metrics that you may want to track.

Improved customer retention

When customers feel valued and content, they are more inclined to remain loyal and make repeat purchases. Implementing a loyalty program can significantly contribute to this effect.

For instance, imagine being a long-term participant in a supermarket’s loyalty program, accumulating rewards for discounts or free items. Such incentives foster loyalty, encouraging folks to continue supporting your brand despite alternative options.

Enhanced brand loyalty and customer satisfaction

Loyalty programs enhance customer appreciation by rewarding purchases with discounts or complimentary items, fostering a sense of value. Tailoring rewards based on individual preferences demonstrates care and enhances the shopping experience.

This helps to elevate customer satisfaction levels. Satisfied customers are more likely to return, which just goes to show the role of customer loyalty programs in enhancing overall satisfaction and fostering repeat business.

Positive word-of-mouth and referrals

Referral marketing, aka word-of-mouth marketing is a highly effective and sought-after strategy for customer acquisition. Recommendations from friends and family, along with good reviews on social media carry more weight than brand messages.

This is one of the most significant gains from loyalty programs — devoted customers become brand advocates, sharing their positive experiences and benefits received from your business. Through their advocacy, your company can gain new customers organically, without incurring any additional costs.

Data collection and insights for better business decisions

Understanding customers is crucial for business success. Rewards programs offer valuable insights into loyal customers, including their personal details and preferences. This enables businesses to enhance customer experiences and satisfaction by tailoring their services to meet individual preferences.

Bonus points if your loyalty program works across multiple channels. Going omnichannel with your loyalty efforts means you can collect data from all customer touchpoints, while providing a seamless experience no matter where or how they’re shopping.

Fashion label ALPHA60 was looking to improve its customer-first marketing efforts by providing all its customers with the same great experience. ALPHA60 brought in in-store and online sales data into Klaviyo, allowing the brand to display points balances, segment customers, and send personalized emails, no matter how customers shop.

Alpha60 earn options

By using Marsello for loyalty and marketing, ALPHA60 was able to attain a repeat purchase rate of 70%, wildly surpassing what is considered to be a good repeat purchase rate in the industry (between 20% and 40%).

Tools to track your metrics

Loyalty program solutions like Marsello give you a whole host of tools required to track metrics related to loyalty programs. 

The platform's built in marketing analytics capabilities can shed light on which channels and strategies yield the best results. Plus, you can track your loyalty program performance overtime, so you can improve both in the short- and long-term. 

Final words

Loyalty programs can offer substantial returns on investment for your business. The right program can enhance customer satisfaction, drive repeat purchases, and boost retention rates. It also provides valuable data and insights for informed decision-making and optimized marketing strategies. 

That’s why it’s so important to invest in the right solution AND track your return on that investment. Measuring your loyalty program ROI helps you improve, so you can continue to delight customers and keep them coming back.

Need help doing just that? Check out our ROI Calculator to see how your loyalty programs are performing or talk to an expert to discuss opportunities for revenue growth.

Frame 6 (4)download free loyalty program roi calculator

 

Get advice from a loyalty expert and start driving repeat sales.

Book a demo

 

 

Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program

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    Create new & look-a-like audiences with Facebook Audience Sync

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    Easily use social media ads to retarget current customers or acquire new customers using the Facebook Audience Sync feature from Marsello.
    The Marsello and Facebook Logos feature alongside a Facebook Ad carousel by NZ-based retailer, Madame Fancy Pants.

    Facebook advertising can feel like a minefield, particularly when it comes to creating perfected audiences. Now, you can automatically import your custom segments directly from Marsello with Facebook Audience Sync, saving you time and also ensuring your audience is always up to date!

    The Facebook Audience Sync feature allows you to easily carry over your custom segments to your Facebook Ads Manager account where you can start creating compelling ads that convert customers. You don’t have to load a new audience every time you want to create ads; in fact, the Facebook Audience Sync is designed to update every hour, so it’s always up to date, ensuring that your marketing reaches all your desired customers. 

     

    The world of social media marketing might feel a little overwhelming when you first get started, but by automatically loading your customer segments to your Facebook Ads Manager account, it’s easy to create promotional marketing campaigns that target both new and existing customers – this is where Facebook Audience Sync changes the game. The hard work is done for you as you easily sync custom segments to Facebook with just a few clicks! 

     

    There are some things you’ll need to ensure you’ve done before you can use the Facebook Audience Sync feature. Let’s delve a little deeper.

     

    Getting started with Facebook Audience Sync

    First thing’s first, you’ll need to ensure your Facebook Ads Manager account is set up and ready to go before you can sync your Marsello custom segments.

     

    Once your Facebook Ads Manager account is all ready to go, you can navigate to the Add-ons page in your Marsello admin and easily find the Facebook Audience Sync feature. Here you can connect your Facebook Ads Manager account to your Marsello account by completing the required Facebook permissions and following the set-up steps.

     

    And when you’ve completed the set-up process, you’ll be able to start syncing your selected Marsello custom segments to your Facebook Ads Manager account. Connecting your Marsello account to Facebook opens up a wide range of marketing possibilities to various customer groups and not just those who you’ve added with the Facebook Audience Sync feature. 

     

    One important note: as we’ve touched on, the Facebook Audience Sync tool allows you to create Facebook ad audiences directly from your Marsello custom segments – emphasis on the “custom segments”. By this, we mean that you can only sync segments that you’ve created yourself. If you haven’t created any yet, you can learn more about custom segments in our help center. 

     

    One question you may have is, “How can I sync my RFM segments, i.e. Loyal Customers?” And it’s actually very easy! All you need to do is create a copy of your desired RFM segment (these are your ‘Loyal’, ‘Best’, ‘At-risk’ segments, etc.). From here, you can easily sync this new custom segment across to Facebook Ads Manager (make sure you name your new segment so that it’s easily distinguishable). Your segment will appear in your selectable Ads audiences as “Marsello: ” so if you named a copy of an RFM segment as Facebook-Audience-Loyal-Customers, it would be easily distinguishable in both Marsello and Facebook Ads Manager.

    Now that we’ve got the need-to-know feature information out of the way let’s explore how you can get creative with your custom audiences and Facebook campaigns.

     

    How to create Facebook ads that convert customers

    There are a few different ways to break down social media ads, usually based on your goals. For the sake of keeping things simple, we’ll look at ads as tools for either retargeting or acquisition – meaning you’re using ads to either engage your current customers or attract new customers. 

    Let’s break down these two advertising goals while showcasing how you can use Facebook Audience Sync to create innovative yet straightforward ad campaigns.

     

    Retargeting Existing Customers with Facebook Ads

    According to Niel Patel, 72% of customers are inclined to abandon their carts while shopping. That’s huge! Creating retargeting campaigns might be old news at this stage; however, it isn’t always easy to know how much retargeting is too much. Here’s a hint: your campaigns don’t have to be restricted to powerful tools like email marketing and dynamic retargeting tactics (such as AI-driven product recommendations). Integrating your retargeting efforts into your social media marketing campaigns can be a powerful way to re-engage shoppers in new and exciting ways.

     

    With Facebook Audience Sync, you can easily create audiences from your Marsello custom segments. Your RFM Segments can also be a starting point as they help you to target specific groups of customers who are already organised by data-driven AI. For example, the Lost and At-Risk segments could be fantastic audiences for a win-back retargeting campaign that aims to re-capture those less active customers. 

     

    Note: Remember what we stated earlier – you’ll need to create custom segments that are duplicates of your RFM segments if you’d like to market to these.

     

    Let’s look at a few stats that really break down the effectiveness of retention marketing:

    Infographic with stats about the success rates of retention marketing and acquisition marketing.

    Now, these stats aren’t to say that one form of marketing is better than the other; they’re included here to remind you of the power of marketing to current customers. There are huge gains to be made from marketing to both new and existing customers – you just have to be clever about how you approach your marketing tactics.

     

    With Facebook Audience Sync, once you’ve synced the segments that you’d like to advertise to, you can easily add these segments as the audience for your campaigns. All you need to do is ensure you know what your goal for each campaign is, who your audience is, and what actions you want your customers to take. A common CTA for retargeting customers is ‘Shop Now’, as your marketing to customers who already know your brand, have shopped with you before, and maybe need a wee nudge to shop with you again.

     

    We briefly touched on marketing to RFM segments like At-Risk or Lost customers. Consider the following examples of how you could use retargeting to engage some different customer groups:

    • An example of how you could create innovative campaigns to engage your At-Risk or Lost segments is to design a win-back campaign that retargets these customers after they’ve abandoned their cart. Whether you’re offering shoppers a discount or simply reminding them of your most popular products, remember that your ad should be compelling, concise, and inviting to that particular customer group.

    • You could create a targeted campaign that actively re-engages your ‘Window Shopper’ RFM segment (which is customers who’ve visited your online store but not shopped with you). This campaign could offer this audience anything from a sneak peek to an exclusive collection, to a one-day sale. 

    Acquiring New Customers with Lookalike Audiences

    Customer acquisition can feel like a big task – how can you possibly market to someone who has never heard of your store and whose contact details you don’t have? 

     

    This is why the Facebook Audience Sync feature is so exciting – acquisition marketing is perhaps one of the most effective ways that you can put the Facebook Audience Sync feature to use!

    When you sync your selected custom segment, you can then use this customer list and as the base for a Facebook lookalike audience; this will allow you to target Facebook users who ‘look like’ your customers, be that age, location, gender etc. The more specific you make your lookalike audience settings, the smaller the audience will get, but this will also increase your likelihood of generating traffic. 

     

    So here’s an example of this in action:

    • Stage 1 – You want to create an ad that reaches a wide range of people who have similar interests to your customers, but you don’t want to include any current customers in that list.

    • Stage 2 – You create a custom segment in Marsello that includes all your customers and title it ‘All Customers’.

    • Stage 3 – You sync that list using the Facebook Audience Sync feature.

    • Stage 4 – You use Facebook Ads Manager to create a ‘Lookalike Audience’.

    Creating a lookalike audience will help you to reach Facebook users who are similar to your current customers. When you consider that 2.60 Billion People use Facebook worldwide, that’s a tremendous amount of potential for reaching customers that you otherwise may not have had a way to contact.

     

    But smart marketing includes knowing how to get the best results from a very specific audience. You don’t want to create an audience that consists of a huge number of people only to lose money because most of these people will either ignore your ad (as it doesn’t apply to them) or click on your ad but won’t engage in a way that helps you meet your goal.

     

    Did you know you can go one step further and exclude your existing customers from your Facebook ads? 

    Acquiring New Customers While Excluding Existing Customers

    To exclude your synced Marsello custom segment from your ad audience, you simply need to create a ‘Custom Exclusion’ in your Facebook ad settings. By excluding your current customers, you’ll have a super-refined audience which is based on your current customers (who are proven to like your brand), you’re also avoiding paying for engagement from your already loyal customers.

     

    From here, you’re free to design robust, captivating ads that encourage Facebook users who may not know anything about your brand to click on your ads and shop with you. Remember this as you create your ad: you want to excite, entice, and engage your new audience. Niel Patel has you covered when it comes to social acquisition communication, so don’t be afraid to dig around and look at what the pros are doing to master their social media marketing.

     

    Ready to combine all these tactics together?

     

    Remember those retargeting ads we mentioned? Why not get really creative and make a retargeting campaign that captures those customers from your lookalike audience who clicked on your ad and visited your store but did not make a purchase, turning your acquisition campaign into a brilliant retargeting campaign, all while excluding any current customers from your audience.

     

    Our final piece of advice: no matter what kinds of social media campaigns you create, make sure you’re keeping track of the results, and your ad spend. Set yourself a budget and don’t be afraid to experiment, but don’t let yourself put money into campaigns that feel like they could do with a refresh or an overhaul. Tracking is the best way to ensure your ads are seeing the results you expect. Just make sure you’re tracking the metrics that apply to your marketing.

    Madame Fancy Pants uses a Facebook ad carousel to marketing a 15% off discount featuring leopard print Birkenstocks over a swimming pool.

    Omnichannel retailer, Madame Fancy Pants, is a prime example of retailers using Facebook ads to engage a wide range of customers. Recently, MFP created the Facebook campaign shown in the image above. The campaign targeted a lookalike audience based on their current customers, but they went a step further (as suggested in the section above) and excluded the following audiences:

    • any user who is an existing MFP customer and accepts marketing

    • recent shoppers as they made a purchase.

    MFP saw a 3.2x Return on Ad Spend (ROAS) and an almost even mix of in-store and online spend over the month that the ad campaign ran. 

     

    Final words

    As we’ve broken down, your Facebook advertising strategy can be a powerful tool to accompany any of your promotional marketing. However, you have to ensure your Social Media marketing is done right, and that starts with ensuring that you’re marketing to the right audiences.

     

    With Facebook Audience Sync, it’s easy to create custom audiences and then develop targeted ad campaigns that work specifically for those customer groups. Whether you’re excluding that customer group while creating a lookalike campaign, or marketing directly to a specific segment, all your Marsello custom segments can be synced to Facebook Ads Manager in just a few clicks.

     

    Start syncing

    Acquisition Marketing Automation Legacy POS Retention Marketing Retail Marketing

    Fellow NZ-Based Company, Goody, Joins the Marsello Family

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    We’re officially welcoming fellow New Zealand-based Goody to the Marsello family. Read on to learn what this acquisition means for Marsello.

    Marsello's logo alongside the Goody logo

     

    Today, we’re officially welcoming fellow New Zealand-based Goody to the Marsello family. Goody is a loyalty platform and CRM solution used by hundreds of businesses and over 1.2 million members.

     

    As teams, we both believe small-to-medium enterprise (SME) business owners deserve a loyalty and marketing solution that generates real, revenue-based results. Results that are accurately attributable to the marketing you run. The only way that’s possible is with quality integrations with POS and eCommerce that link the sale to the customer and the marketing they receive.  

     

    Combining Marsello with Goody puts us in a great position to bring everything we’ve learned to a broader New Zealand market and to new sectors, like hospitality. Together, we’ll be able to help more New Zealand and hospitality businesses get more sales and better results from their marketing.

    Read more on the acquisition in articles from the following publications:

    We’re excited about what lies ahead as we bring our teams and our products together.

     

    Marsello’s CEO’s stand with Goody’s CEO in front of a lead window and brick pillars.

    Campaign Marketing Marketing Tips Acquisition Email Marketing Retention Marketing

    Discover Email Campaign Templates Designed for Customer Engagement

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    Create consistent, recognizable, and beautiful emails with previously designed email templates! Learn how to navigate Marsello's Email Templates Library.

    With a variety of options to choose from, Marsello’s Email Campaign Templates Library gives you numerous designs for creating stylish newsletters, announcements (such as sales and promotions), updates on stock, and more using the One-off Email Campaigns feature! Each template is designed so you easily create beautifully on-brand emails that see results, without hours of effort and edits.

    Let’s dig a little deeper and learn about each template type.

     

    Basic Templates

    With full customization available, the basic email templates allow you to edit the design of each email so that it best suits your store’s brand, helping your customers to instantly recognize who they’re receiving mail from. You’ll have the flexibility to create emails that truly embody your store without having to start those email designs from scratch.

     

    Marsello's in-app email template library with 6 templates

     

    Themed Templates

    Created by professional designers with years of experience in email marketing, these templates are ready for you to simply add in your store’s branding and relevant content, review, then send! With everything from color palettes to fonts, themed templates are designed to do the hard yards for you.

     

    Marsello's themed email templates within the app

     

    Custom Templates

    This is where things get really exciting! You can now create your own custom templates, allowing you to save the designs of emails you know your customers love so that you can use those designs again in the future. Either save a previous campaign as a template or start from scratch and create your own email marketing masterpiece. 

     

    Marsello's in-app email templates with custom themes.

     

    Final Words

    Email templates allow you to easily replicate the same style throughout your communications and create a recognizable experience for your customers. In turn, your customers look forward to your emails and the likelihood of them engaging with your communication efforts increases. Increase your email marketing ROI and start exploring and designing emails that excite new shoppers and loyal customers alike.

    Excited to start using email templates? Learn how to navigate Marsello’s Email Template Library and get ready to start using them for yourself.

     

    GET MARSELLO

     

    Marketing Tips Acquisition COVID-19 Omnichannel Retail Retention Marketing

    Re-opening Your Store After COVID-19

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    Read about how improving your store's marketing and practices could be the secret to a busy period once the coronavirus pandemic is over.

    Blog banner featuring a store worker changing an Open sign.

    How to Kick Off Strong When the Pandemic is Over

    Have you started planning for your store after lockdowns and ‘shelter at home’ orders are lifted?

    While it’s true that much of the world is still on lockdown, there will come a time when stores will be allowed to open their doors once again. In-store sales will start picking up again as foot traffic increases, and the merchants who are adaptable and have plans in place for any changes to shopping patterns will be in a much better position to continue selling well beyond the pandemic lockdown. 

     

    That’s why it’s never too early to start planning. If you take proactive steps to market and improve your business during this period, you could hit the ground running when the coronavirus pandemic is over; even if that means that your store stays online, embraces omnichannel, or you have to adapt your business model. 

     

    Here are some suggestions on what you can do to prepare your store for emerging from lockdown.

     

    Stay in constant contact with your customers

    Whether or not you’re selling at the moment, it’s crucial that you keep in touch with your customers. Doing so helps you stay top of mind so that when shoppers are ready to make purchases, your store will automatically be on their radar. 

     

    The types of messages that you send will vary depending on the state of your business, but here are some ideas.

     

    Online product launches

    If you have new products in stock, find creative ways to launch (or re-launch) them digitally. Put out teasers, create email and social media campaigns, and try to generate as much excitement as possible. 

     

    Need an example? Check out this email from, T.C. Elli’s, which lets their customers know that they’re launching new products, and they’re doing so in an innovative and exciting way considering the circumstances around COVID-19 – They’re hosting a live video launch!

    T.C. Elli’s Live Videos One-off Campaign

    This clever email also allows T.C. Elli’s to capture customer information for a wide range of their customers, helping them to increase their marketing reach in the future. 

     

    Offers and promotions

    If you’re still open or are currently selling online, continue emailing your subscribers about any sales or offers you have going on. You can make your offers more relevant by either running promotions on items that shoppers are likely to buy or by segmenting shoppers based on their brand interactions and activities. 

     

    Consider the case of Lightspeed & Shopify retailer, The BCode, a Havaianas and Skechers shoe distributor. Rather than sending out generic email blasts to everyone, The BCode makes use of customer segments. For instance, in the summer, they launched a campaign specifically for customers within their "loyal segment," and were able to convert 13.79% of subscribers – that’s way above the industry average. 

    An email from The BCode the showcases their products and gives a product explanation.

    Company updates

    People want to know what’s going on in your business, so keep shoppers posted on important updates to your company. Have you made any changes to your staff’s work arrangements? Do you have new policies in place? What can customers expect from you during these times?

    Have a look at this email from Australian retailer, OnceWas. 

    An email campaign from OnceWas providing customers with a COVID-19 store closure update.

    The OnceWas team uses a simple design to compliment a clear and concise message: that their Hampton-based brick-and-mortar store has temporarily closed as a direct result of COVID-19. But they don’t just leave the communication there, they go on to offer customers a styling service that encourages shoppers to stay engaged with OneWas and keep making purchases. OneWas further reinforces this objective by adding a link to new arrivals and encouraging their customers to ‘explore’. 

    OnceWas’ COVID-19 related update cleverly encourages customers to keep shopping, rather than dissuading them and that’s a powerful marketing strategy to have in their toolkit. Beautiful design and clear communication are a winning combination in getting customers to keep shopping with you, and OnceWas have mastered this! 

     

    Tighten up your existing systems

    If you’re experiencing downtime due to the coronavirus, take this as an opportunity to tighten up all the operational tasks that you’ve been putting off. 

     

    Here are some ideas:

     

    Count and reconcile your inventory 

    Keeping your stock in check can fall to the wayside especially during hectic shopping seasons. Doing a full inventory count takes several hours (sometimes a couple of days) and many stores can’t set aside that time when they’re busy selling. 

    So if you currently have some time on your hands, now is a good opportunity to really get a handle on your stock. Count your items so you can make sure that the inventory levels in your system match what you have in your physical store or warehouse. 

     

    Streamline manual tasks

    Identify tasks that you’re still doing by hand, and find ways to automate them. 

    For instance, if you’re running a manual loyalty program that involves physical stamp cards, you could look into more modern solutions that allow you and your customers to track and redeem rewards easily. 

     

    Sales and inventory are two other common areas that small businesses should also look into. Many SMBs are still using pen and paper to track stock movements and revenues. If you’re one of them, it’s high time that you switch to a cloud-based POS and retail management system that automatically does that for you. 

     

    Streamlining manual tasks not only saves you a ton of time, it reduces human error and can also help grow your business. Switching to a modern loyalty solution, for instance, doesn’t just make it easier to run your rewards program, it also gives you the ability to offer better rewards and get to know your customers, which ultimately boosts shopper retention and revenues. 

     

    Integrate different platforms

    Already using modern software in your business? Make sure they’re tightly integrated. 

    Let’s say you’re running an online shop and a brick-and-mortar store. In this case, you want to connect your POS system with your eCommerce platform, so that sales, inventory, and customer data flow easily between the two solutions. 

     

    You can even add in a loyalty integration, so you can run a rewards program seamlessly across online and offline channels. And now is the perfect time to start rewarding your customers who have shopped during retail restrictions, thereby encouraging those customers to keep coming back to your store long after you’ve come past lockdown.

     

    One retailer that’s doing this well is Bulo Shoes, a retailer that runs a fully-integrated and robust retention strategy that runs across their online and brick-and-mortar stores.

     

    “We linked Marsello to our online and physical stores with a loyalty program and automated email marketing, making it easy for us to communicate with customers regularly and to offer them rewards that keep them coming back," says Silas Gomez, eCommerce manager at Bulo Shoes. 

     

    “With the recent COVID-19 developments, we have been able to direct our customers to our online stores and keep them updated with any changes.”

    Bulo Shoe's loyalty program's online widget.

    Bulo Shoes’ integrated strategy has paid off tremendously. The company is seeing 27x ROI by interlacing a generous loyalty program with a cleverly curated email marketing strategy.

    Bulo Shoes also has a 13% repeat purchase rate across all their stores; they're seeing an engagement rate of 45% and they've generated over $7,800 in reward redemptions alone. 

    Keeping your physical and digital stores in sync means you never have to worry about double-selling products and you can provide a more seamless and rewarding shopping experience to your customers.

     

    This is just one example of how you can integrate the apps in your business. Depending on the software you’re using, there are plenty of other solutions that you can connect, including:

    • Accounting software

    • Payment processor

    • Staff management

    • Reporting and analytics

    The easiest way to connect your platforms is to use add-ons. For example, if you’re selling online, you can research the apps that your shopping cart integrates with. 

     

    That said, if you can’t find direct integrations, you can use a solutions like Zapier and IFTTT, which enables you to connect various apps together. 

     

    Check out our recent blogs on top apps for Shopify and BigCommerce & Lightspeed and save yourself the times spent researching.

     

    Leverage data

    It’s best to make data-backed decisions when planning for your re-opening, particularly when it comes to what products to market and sell. 

     

    Admittedly, COVID-19 makes this task a bit tricky. While historical data still has some value, it may not be as reliable, given the drastic changes that have occurred. 

     

    That said, there are a couple of things you can do that can help you determine your sales and marketing strategy going forward.

     

    Engage in social listening

    Pay attention to what your customers are saying online and on social media. What have they been up to? Have they developed new interests? Are there any products or services in particular that they’re looking into?

     

    The answers to these questions can shed light on insights you can use when making stock, purchasing, and merchandising decisions for your re-opening. 

     

    Look into search trends

    Use tools such as Google Trends and Keyword Planner to see what people are searching for online. What keywords (related to your vertical) are seeing more searches than usual? 

     

    Uncovering those search trends can take some digging, but you might discover useful nuggets along the way!

     

    See what people are wishing for

    If you have a wishlist feature on your website, you can use that to figure out what people want to buy. Dig into your wishlist data and use it to determine which products to market and sell.

     

    When you combine the above with historical data and traditional demand forecasting, you’ll be able to effectively plan your assortment and sales initiatives. 

     

    Re-open with a splash

    Re-opening your store is a big deal, so it’s fitting that you make your relaunch… well, big. Create a huge campaign around your grand re-opening. 

     

    Rather than just putting your “OPEN” sign back up and hoping people will come in, proactively implement strategies to drive traffic.

     

    Here are a few ideas:

    • Launch celebratory offers and sales

    • Hold an in-store event complete with giveaways and swag bags

    • Email local press or influencers in your area to generate buzz

    • Market your grand reopening to email subscribers

    • Create a lead-up-to-opening campaign on your social media

    • Consider paid social media advertising to boost awareness

    Implementing a combination of the above tactics will allow you to open with a splash. And when you combine these steps with the data-backed insights that we talked about above, you’ll be able to maximize traffic and sales. 

     

    Re-emphasize health and safety

    Consumers will start shopping again, but they will likely be more cautious going back to brick-and-mortar stores. 

     

    Alleviate your customers’ concerns by communicating and enforcing extra health and safety measures. These measures will depend on your specific store, but will likely involve something along the lines of:

     

    Encouraging space between shoppers

    Maybe you need to keep your store displays and fixtures farther apart to give people more space to move around. You could also encourage physical space at the checkout counter by putting markers on the floor that are six feet apart, so shoppers know where they should stand while waiting in line.

     

    Limiting physical contact

    You could limit contact between customers and employees through things like self-checkout as well as by keeping your staff lean. You could also limit the number of people who can enter your store at any given time.

     

    Added cleanliness and sanitation practices

    Clean and sanitize your store often. Give extra attention to high-touch areas, such as popular product displays and the frequently visited sections of your store. If you have baskets or shopping carts, wipe them down before each shopper touches them. 

     

    And whatever measures you decide to take, communicate everything to your customers. Display prominent signage in-store and include your policies and action steps in all your customer communications. 

     

    For best results, use a reassuring tone in your messages. For instance, when emailing customers about your grand re-opening, craft a message that strikes a balance between promotional and reassuring. You want to welcome customers back to your business while making them feel safe and confident that they can shop at your store. 

     

    It’s never too early to prepare for retail’s bounce-back

    While no-one knows for sure when retailers can open their doors again, it doesn’t hurt to be prepared. Laying the groundwork today will put you in a position to succeed tomorrow and beyond. 

     

    Let us know in the comments how you’re planning to re-open your store and excite your customers. Good luck and stay safe!

    Shopify Acquisition Loyalty Marketing SEO

    Guide to Getting Your First Key Sales in 2022

    ClockIcon  READ
    In this blog, learn how to generate quality leads for your first key sales and turn new customers into life-long brand advocates.

    In retail, momentum is one of the best ways to generate your first key sales. 

    Getting momentum and customers early on not only puts money in the bank (so you can re-invest in your growth), but it gives you the motivation to keep going.

    So, how exactly can you drive your initial sales? We’ve put together 10 ideas to help you gain paying customers as you kick-off, as well as important sales KPIs and keys to building an effective sales process in your new retail biz. 

     

    Top sales KPIs to track your progress 


    Tracking sales KPIs is the only way to know if you are making progress in your retail business. The sooner you start tracking your progress, the sooner you will see trends in key metrics such as customer loyalty, churn rate, and how it costs to bring in a new customer. 

    Below are some of the best sales KPIs you should include in your analytics. 


    Customer Loyalty 


    Your loyal customers Repeat customers spend 33% more than other customers, so it is worth focusing your marketing efforts on them specifically.

    Loyalty can be measured through: 

        • Net Promoter Scores (NPS), i.e. how likely they are to recommend your brand to someone you know 
        • Customer Loyalty Index surveys 
        • Returning customer analytics
        • Loyalty programs and points redemption (customer loyalty platforms like Marsello track this for you!) 

    If you can build customer loyalty from the very first sale, they will help you build momentum as you grow. 

     

    Customer Lifetime Value 

    The Customer Lifetime Value KPI is how much your business can reasonably expect from a single customer. You can use this to identify your best customer segments and therefore where to focus your marketing budget. 

    Companies that prioritize customer experience have profits 60% higher on average than those that don’t. This emphasizes the need for ongoing customer relationships and long-term investment. Loyalty is not a once-off marketing tactic. 

     

    Customer Churn Rate 


    Another sales KPI is your Customer Churn Rate. A high churn rate indicates that although someone has signed up, they are not sticking around. It is measured by 

    For retail, KPIs that go alongside churn rates are

        • Customer loyalty and NPS scores 
        • Retention and returning customers (do customers make one purchase and never come back?) 
        • Loyalty program redemption (are customers engaged with your brand’s rewards?) 

     

    Customer Acquisition Price 


    Customer acquisition price measures how much it costs your business to bring in a new customer. The lower this number, the more efficient your marketing and sales process. 

    Ideally, you want your average purchase order per customer to be much higher than the cost of acquiring them. This is why you should focus on customer loyalty just as much as marketing. 

     

    Average Order Value 


    The Average Order Value is calculated by dividing the total revenue by the number of orders placed. Tracking average order value doesn’t just give you insight into customer behavior. It also correlates with a stronger profit margin.

    Using upsells, rewards points, and bonuses like free shipping thresholds are all ways that you can incentivize higher average order values when you start out. 

     

    Key elements for an effective sales process from the start 


    No matter what you’re selling, there are a few proven factors for success in sales. These steps integrate into any sales process, whether that is through website copy, market positioning, social media, or email marketing. 

     

    Identify customer needs clearly 


    Before you can make your first sale (or any sale), you need to know if your product serves your ideal customers. 

    This is done in the planning stage of your business. Ask questions about your product like:

        • Do you have a unique value proposition?
        • Have you done the market research? Is this something people ACTUALLY want or need?
        • Who are your competitors? What are their measures of success?
        • Why do people NEED or CRAVE your product? 
        • Have you done a test run to see if there is demand before investing everything in a product? 

    Putting in the effort to clearly identify your customers’ needs will set you up for success with your first few sales. 

     

    Build Rapport
     

    Prior to launching and getting sales, it is important to start building a rapport with potential customers. 68% of customers leave a brand because they feel like you are indifferent to them. Building rapport and community is crucial!

    One way you can create ongoing rapport with your potential customers is to build a loyalty program. Effective loyalty programs can help build hype and a sense of belonging for your customers which all contribute to more sales. 

    A good example of a loyalty program community is Our Bralette Club. They have a loyalty program that not only resulted in a 278% increase in revenue generated from program members alone but also creates a fun, inclusive community for their “Peach Party” members. 

     

    Present a solution
     

    When you boil it down, sales and business are just identifying problems and solving them for people. Whether that's showing customers how to build their spring wardrobe, selling the highest quality dog treats on the market, or helping people get into hiking by giving great boot recommendations. 

    Your marketing, visual assets, storefront, and website copy should all emphasize why your product solves their exact needs. 

     

    Close the deal 


    Once you have done your market research, started building rapport, and have a product people want, the most important step is to actually make the sale! 

    We have a few tips to help increase your chances of closing the deal:

        • Make your website as user-friendly as possible - According to a study by eMarketer, the only thing online shoppers like more than customer reward coupons is a quick and easy checkout process. 83% of shoppers marked this as their top priority for loyalty.
        • Set up abandoned cart emails- People get distracted, people change their mind mid-payment- increase your chances of making the sale by setting up automated email campaigns for abandoned carts.
        • Start collecting customer data - Set up a loyalty campaign that rewards loyal customers and gets them to sign in. This will help with retargeting and building relationships.
        • Create an omnichannel marketing campaign - omnichannel marketing campaigns allow you personalize and target specific groups to increase your chance of converting them to sales.
        • Sweeten the deal - How can you convert interested shoppers to paying customers? To make those first sales, consider sweetening the deal with rewards points for people who sign up and spend thresholds for things like free shipping.

    Create upselling opportunities 

    Businesses with higher Average Order Values have higher profit margins. That’s just simple math! Creating upselling opportunities is a great way to increase the amount a customer spends in a single transaction. 

    Examples of upselling opportunities you could try out are:

        • Free Shipping - Let customers know how close they are to a free shipping spend threshold 
        • Free Items - Give customers a free (exclusive!) gift if they spend a certain amount 
        • Loyalty Points - Set up a program that lets customers earn loyalty points and rewards for every dollar they spend which they can exchange for other products or exclusive experiences 
        • Similar Products - Give targeted recommendations for items usually brought together
        • Discount Bundles - Group together similar products and offer a limited time discount to buy multiple items.

     

    10 marketing ideas to help you get your first sales 

     

    Ready to make your first key sales and get that momentum going in your new retail business? Whether you’re selling online, in person, or both, these marketing ideas will get you started. 

     

    Start marketing before you launch your products


    Aim to build your audience even before you officially launch your business. You can do this by creating a website or social media account, and then posting high-value content that appeals to your target audience. You could also join relevant groups or forums and start connecting with their members.

    Doing so benefits you in a couple of ways. For starters, finding an audience prior to creating your product or business enables you to validate your ideas and determine if there’s a strong demand for your offerings.

    What’s more, building an audience early on paves the way for a stronger launch. If you already have an email list or existing social media followers, then you can unveil your products to an audience who already knows who you are, and are thus more likely to buy from you.

    Andrew Alexander, the owner of FindaBusinessIdea.com, put this strategy to work in his own business and has seen tremendous results.

    “In 2011, I was making posts on niche forums, Facebook groups, and other niche websites [...] Three years later when I released a program of mine… I already had people who were familiar with my name and what I wrote about, so the content I put out there (before I even had a product) allowed me to get my first $1,200 in sales within the first few weeks of launching my business.”

     

    2. Be clear about your Unique Value Proposition (UVP)


    One of the biggest challenges when it comes to getting your first sales is standing out in the marketplace. If your company is brand new, it can be difficult to win over shoppers, particularly if you’re selling something that people can buy elsewhere.

    An effective way to get around this is to identify your unique value proposition and then market to a specific niche that would benefit from your UVP. Doing so enables you to be more targeted with your messaging and positioning, which then allows you to cut through the noise, so you’re speaking directly to your niche.

    Jonathan Prichard, the CEO and Founder of MattressInsider.com says that finding his business' UPV and niche helped keep his business from sinking.

    “When I began my mattress company, I almost went bankrupt selling the same thing every other mattress company in America sold, which made it difficult to stick out. Luckily, I found the custom mattress size niche and was able to reposition the business before we went under,” he shared.


    Jonathan’s key advice is to showcase your UPV in compelling ways.

    “It’s a no-brainer that this is going to make you stand out from the crowd to draw people in for your initial sales. If you don’t stand out in the market you’re entering, you’re not going to get those sales that will keep you afloat, thriving and motivated.”

     

    3. Tap into your existing network

    Your current network could hold the key to unlocking more momentum in your business. If you haven’t done so yet, start reaching out to your friends, family, and existing supporters to see if they can help spread the word or send shoppers your way.

    This step doesn’t have to be complicated. As Kathleen Cutler of Bespoke Commerce notes, you can get going with just a pen and paper.

    “Write down your most connected friends and family who've bought from you in the past. Email them directly to ask who they might know who'd be interested in your eCommerce shop. Follow up with the referral leads directly with highly targeted and personalized communication.”

     

    4. Create an engaging storefront (both online and in-person)

     

    As a retail business, your storefront can either drive traffic and sales or send people packing. This is why it’s important to keep your window displays attractive and enticing. Here are some general guidelines to keep in mind:

        • Always have fresh merchandise and themes – See to it that your storefront keeps up with seasonal trends. Update your displays every week or two with new merchandise to give customers reasons to check out your store.
        • Keep elements at eye level – Decide on the products or elements that you want to draw attention to, and then position those key components at eye level. This ensures that people will immediately see the most important elements of your displays.
        • Avoid clutter – Overcrowded displays can cheapen the look and feel of your merchandise. Prevent that by keeping your display clean and uncluttered. The objective is to use your best products to attract customers, and encourage discovery while they’re inside your shop.

    Here's a great example of a display following the above best practices. Created by Smack Bang, the window display incorporates clear links to the brand colors and aesthetic (which match the online store) and showcases Smack Bang's outstanding pet products by cleverly displaying them at various levels. 

    They've even added links to their store and socials with window decals which is a clever way to encourage social media engagement – something they reward with their customer loyalty program.

     

    For eCommerce stores, your homepage is the online equivalent of a window display, and the same design principles apply. Be sure to showcase your seasonal products and new arrivals, and avoid cluttering up the page with unnecessary information.

    Anna Beck, a Shopify Plus-powered jewelry retailer, has mastered a well-branded, visually appealing online user experience. Their online store is always tastefully-designed with a beautiful homepage banner featuring their high-quality product photography.

    Anna Beck's online store with three ornate gold rings featured in a full-width product photo under the fold.

    With their logo at the top of the page, a simple set of navigation options, and clear but unobtrusive banners, Anna Beck's online store feels inviting and enjoyable to explore – something that's essential for 'E-tail' success.

     

    5. Collaborate with other companies

     

    Consider tapping into the audiences of other retailers and brands. Identify non-competing companies that share your target customers and see if you can team up with them. Collaboration between brands and retailers is becoming an increasingly popular strategy, particularly when it comes to eCommerce companies teaming up with physical retailers.

    Case in point: Australian women's ethical surf brand Salt Gypsy. Salt Gypsy started as an eCommerce store specializing in women's surfwear (swimwear that meets the needs of surfers). While Salt Gypsy has a bricks-and-mortar location, they've been able to grow their brand and make waves into new areas by branching out into technical surf equipment – namely, surfboards!

    Now, numerous stores in Australia and locations around the world have teamed up with Salt Gypsy to sell their merchandise – and their boards (designed specifically for female surfers) are flying off the racks! Sometimes, the Salt Gypsy team gets a chance to pop into one of these locations like they did at Byron Bay surf store, Surfection.

     

    And the Surfection team is quick to cross-promote Salt Gypsy too! It's exactly this kind of co-marketing that creates life-long customers from just one sale!

     

    6. Team up with influencers


    Research shows that 92% of consumers trust influencers more than traditional celebrity endorsements, which means that building relationships with the right individuals can pay off for your brand.

    If it makes sense for your business, start identifying social influencers who can amplify your messages. Use tools such as Peg, Reachbird, and Scrunch to find the right people and create outreach campaigns.

    You can engage influencers through a number of ways, including:

        • Free products
        • Content collaborations
        • Sponsored posts

    For best results, throw in a special offer or discount that influencers can promote to their followers. That’s what Lokus Nutrition did when they ran their influencer campaign.

    “We targeted Instagram users with audiences that matched our desired customer. We reached out to them directly and engaged an Influencer Marketing Agency to help,” explained Paul Miller, president at Lokus Nutrition. “We [then] offered a 10% discount code for our Instagram influencers to use in their posts.

     

    7. Tap into relevant groups and websites

    In addition to sending freebies or discounts to influencers, see if you can apply the same strategy when reaching out to websites and social media groups.

    According to Paul, they also reached out to Facebook groups whose members matched their target market and offered a discount for all group members.

    The Lokus Nutrition team also reached out to websites that were coming up with gift guides, and sent those sites free products to sample, review, and include in their guides.

    Consider doing something similar in your business. Identify groups, forums, or websites that are frequented by your target audience, and then explore partnership opportunities with them.

     

    8. Encourage referrals

    Create momentum and drive additional sales by encouraging your current customer base to refer your brand to their network. To streamline this process, use a referral program that makes it easy to track referrals and rewards.

    Carolina Lifestyle, a women's clothing retailer, implements this strategy quite well through their customer loyalty program. Carolina Lifestyle's referral program instantly rewards their customers with 100 loyalty points (the equivalent of $10 off in-store) for every friend who successfully makes a purchase.

    The program not only attracts new shoppers, but it lets the brand reward their existing customers, which builds goodwill and brand loyalty in the process.

    Marsello-Loyalty-Program-Case-Study-Carolina-Lifestyle-Banner

    Marsello lets you automate the referral process with instant unique URLs for different social media platforms, email, and SMS, then reward customers for successfully referring their friends who complete a purchase. 

     

    9. Consider third-party online marketplaces

     

    It’s worth considering if marketplaces like Amazon, Etsy, and eBay are good sales channels for your brand. These websites reach hundreds of millions of users daily, so with the right marketplace strategy, you can drive additional sales.

    Each website is different, but here are a few general pointers for how to succeed in online marketplaces:

      • Craft compelling listings – Make your product listings as compelling as possible by using attractive images and rich media that showcase your items from various angles. You should also craft unique and compelling copy to effectively communicate the features and benefits of your items.

      • Optimize your listings for search – You want your products to show up on relevant searches, so optimize your listings by incorporating targeted keywords in your titles and descriptions. Just remember not to overdo it! The key is to write for people, not bots.

      • Build up a strong seller reputation – Marketplaces like Amazon, Etsy, and eBay strongly favor sellers with high ratings and reviews. So, strive to build a stellar reputation by selling high-quality products at fair prices, and by providing excellent customer service.

    10. Win back lost sales


    Are shoppers leaving your website without completing their purchases? Don’t let those potential key sales slip away. Implement abandoned cart email campaigns to remind shoppers about the items left in their basket.

    Take a leaf out of OnceWas’ playbook. Whenever someone adds an item to their cart but leaves without completing the sale, OnceWas' Marsello-powered marketing triggers an automated email flow to give the customer the opportunity to finish their purchase and even throws in the added incentive of a 10% discount.


    Marsello-OnceWas-Abandoned-Cart-Email-Flow


    Automated win-back flows are just one of the many ways you can implement automation into your marketing to help you get more and more sales and scale your business. Book a demo with one of our team to learn more about marketing automation and all the other features available with Marsello. 


    Book a demo


    Final words

    Gaining your first key sales may seem daunting, especially if you’re just starting out, but it’s completely doable! With a bit of resourcefulness and creativity, you can start winning over those initial customers and obtain the momentum you need to keep going.

    Need a hand tracking sales KPIs, automating your marketing campaigns, and building engaging loyalty programs to keep those sales rolling in? Marsello is the all-in-one retail platform to help you start, grow, and scale with ease. 

     

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