Uncovering Opportunities in Retail with Preference Centers
At this point, we are all very aware of the impact COVID-19 has taken on our lives. (That’s probably the understatement of the year.) It’s impacted almost every industry, but the retail industry in particular has been hit hard. While the country was essentially shut down for 45 days (or more), so were all of the retail shops we loved to frequent.
We (the customers) were all stuck in our homes and spending a lot more time online shopping than ever before. According to this study, U.S. retailers' online year-over-year (YoY) revenue growth is up 68% as of mid-April.
This has provided an opportunity for digital retail marketers to enhance their online brand presence, and presented the challenge of aligning their digital marketing with current customer shopping behaviors. One way to accomplish this is to maximize preference centers.
What is a preference center?
A preference center is the place in which your customers (aka subscribers) have the ability to select and adjust how often and in what ways they’d like to hear from you. Your preference center is a digital communications hub—giving you the ability to manage your subscribers’ preferences across email, SMS, and other channels. Preference centers give the subscriber the ability to weigh in on the outreach experience they prefer, based on these three ways:
- Content - What do they want to learn about? For example, a photography equipment store wants to offer monthly projects to challenge their subscribers. Do they like sports? Nature? Portraiture? Maybe they aren’t interested in projects and only want to know when the sales are happening. Ask them what they want, then deliver content that appeals to each. In some cases, it can be as simple as swapping out the main image of your email, or it could be the entire content of the newsletter. In either case, the closer you align with your subscriber’s interest, the more you’ll resonate with them.
You can also regionalize your content. A large, lawn-care company asks their subscribers what region they live in and uses this to recommend the right fertilizers and the right uses regions to provide the right lawn-care products and the right time to use them for their customer’s area.
- Cadence - When do they want it? Give your subscribers the power to choose how often they hear from you. Everyone is different—while some may enjoy hearing from you weekly, it may irritate another subscriber. Here’s one way to handle this: Send a daily newsletter for those who want it and a monthly “roll-up” newsletter from those who want to hear from you a little less often.
- Channel - How do they want it? What is your preferred channel for communication? Email, SMS, MMS, or maybe even a phone call could be how a customer prefers to receive their messages.
Avoiding Global Opt-Out - The Cost of Losing a Subscriber
How much is a subscriber worth to you? If they opt out from your emails, you permanently lose one of the most important ways to encourage them to shop with you again. Over the course of a couple of years, that lost revenue adds up. The metric commonly used for measuring this is the Customer Lifetime Value (CLTV), and it’s a good number to keep in mind when working on your subscriber retention strategy. One of the main strategies is simply keeping the subscriber from globally opting out.
Preference centers are also key in providing customers with other options rather than unsubscribing to avoid a global opt-out. Once you lose a customer, you can lose thousands of dollars.
To calculate the average lifetime value of the customer (or subscriber) recency, frequency, and monetary value are all taken into account. Sometimes, the customer that spends the most money, is not necessarily the most profitable customer.
Now more than ever, the content you send needs to be targeted and timely. A well-built preference center can help you do that while also building trust with your customers and strengthening your brand.
Want to learn more about how retailers are leaning into their digital engagement right now? Join us for the webinar on June 23rd, “From Bricks to Clicks: How Retail Marketers Are Leaning into Digital Engagement.”