Raj Dhiman takes the lead this week in The Merchant Life newsletter.
He talks about all things related to customer loyalty.
Here's a preview:
"As priorities change, consumers shift their buying patterns and will make 1st time purchases from new brands. Consumers are seeking newness, buying product aligned to their values or supporting and shopping small/local.
To quantify this, McKinsey has found that three out of four American consumers have tried a new shopping behaviour, and most intend to continue the new shopping behaviour even after COVID-19 subsides.
This brings me to The Leaky Bucket.
All retailers lose customers over time, much like how a bucket with holes loses water. To keep the bucket full, water has to be continuously added. In other words, new customers have to be sought out.
The trouble is that a business can lose customers due to factors beyond their control e.g. they move away. Those holes in the bucket are permanent.
Although consumers are inevitably going to seek out new brands, businesses may not be prepared to convert those newcomers into steady, loyal customers.
The risk here is they don’t have the right tools (if any) to patch up the bucket."