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Offer clash: why it happens and how retailers can prevent it

Seize Digital
Author: Lucy Sharman-Munday
 
To engage customers, increase loyalty and drive sales, retailers often employ several promotional tools at once. It’s not uncommon for retailers – large or small – to have a loyalty program in place while also deploying point-of-sale promotions, in-store offers, online promotions, and offers through social media. And for larger retailers, who may operate different store formats with varying margin structures that require specialized promotional strategies, customer engagement becomes even more complex.
 
But when all of these channels are activated, a bigger challenge arises when a single customer engages with more than one of them: how does the retailer “see” that customer?
 

The lens effect

Too often, that customer will appear to be five different customers. The retailer in effect is seeing the same person through five “lenses,” each lens corresponding to one of the promotional channels. The online lens sees a customer who has bought an item through the ecommerce site, but not the customer who purchased a complementary item in the store a week later, nor the customer that posted a recommendation of those items to their Instagram feed. The problem is, they’re all the same person.
 
The lenses, which should have provided clarity and insight, actually made it harder for the retailer to see the customer.
 

The dangers of offer clash

This kind of myopia – or more accurately, data silos – creates even more havoc when the retailer deploys promotions through its various channels. If the same customer receives different promotions through the different channels he or she engages with, this results in a phenomenon called “offer clash.” And when you have different divisions – each with their own priorities, margins and promotional strategies – targeting the same customer segments, it becomes even more critical to understand and connect your customers’ behaviors across channels and businesses.
 
When a customer receives different or competing offers from the same brand, they are either forced to choose one of the offers, get confused between the offers, or disregard them altogether. And regardless of whether they actually redeem an offer or not, what they have definitely received is an inconsistent experience with the brand.
 
Offer clash is particularly damaging because of its compound effects; not only did the retailer not influence the customer to redeem an offer, but it signaled to the customer that it doesn’t really care enough about them to see them as an individual, impacting their ongoing relationship with the brand. And of course, that retailer just spent marketing dollars on an ineffectual promotion.
 
Failure to understand customers as individuals and adequately track their behaviors and preferences across touchpoints hinders retailers’ ability to provide relevance and value in their marketing and retention initiatives. And without relevant offers and high perceived value, retailers can experience significant attrition. For instance, research shows that of consumers that abandon loyalty programs for not meeting their expectations or failing to deliver value, 57% will shop less or quit shopping with a brand altogether.
 

Unifying data to prevent offer clash

Fortunately, there is a way for retailers to avoid this situation, simply by making sure that every customer action captured by their channel “lenses” are connected into a single, in-focus view of the customer. To do that, retailers need to link all customer personas with a unified customer ID, so they know who a customer is whether they are interacting with the loyalty program, making a transaction with their credit card, logging into their account on the ecommerce site, or visiting the retail brand’s Facebook page.
 
Connecting customer data across channels is important not just for the sake of uniting the lenses and creating a holistic view of the customer – though this is crucial – but also for meeting customers’ expectations for brand interactions. Customized, relevant offers that consumers expect is impossible unless a brand can extract data from loyalty programs and other customer touchpoints, organize that data in a centralized way, and then leverage it effectively.
 
With the right technology (and the right partners), brands can move beyond simply meeting their customers’ expectations, and start anticipating and exceeding them. Eagle Eye is one of those partners: we can help connect you to your customer, enabling you to create better customer experiences, make your loyal customers feel they’re understood, and drive revenue for your business. Contact us today to learn how.