Loyalty programme tells partners when to market??
Knowing how to react during the economic crisis is one thing.Knowing how your customers are likely to react is an even more valuable differentiator.??
Payback, the German partner loyalty programme that claims participation by 60% of German households, has conducted a comprehensive survey among its members to enable its partner companies to press ahead with effective marketing campaigns even during times of economic crisis.
At regular intervals, the new “Payback Consumer Monitor” will provide information to participating companies on the current attitudes, concerns and purchasing behaviour of customer. In this way, Paypack says it can open up a new, flexible segmentation approach for all the marketing activities of Payback and its partners.
Research so far has shown that already, consumers are reacting in very different ways depending on the sector. For example, the study shows that Payback customers are not yet cutting back on food, cosmetics or travel in the short or medium term. However, the situation is very different for industries such as consumer electronics, car components, textiles and furniture. In these areas, companies can expect marked customer reticence and a massive slump in sales in the next few months if they do not take targeted countermeasures and create strong purchasing incentives.
“In concrete terms this means that, particularly in tough economic times, companies will no longer be able to apply a one-size-fits-all approach to their customers. Instead, the affected retailers must seek to understand the actual consumer requirements and their specific lifestyles”, explains Burkhard Grassmann, management spokesman for Payback.
“Only companies that actively invest in effective communication will emerge from the crisis as winners. Companies – particularly those operating in at-risk sectors – have to understand that they must do more than apply traditional marketing activities, such as flyers or classical advertising.”
Future behaviour Payback is claiming the research not only gives a snapshot of how consumers are behaving currently, but gives valuable pointers to how they will respond in the future. In fact, the online survey among 2,500 Payback customers revealed that consumers’ purchasing behaviour will differ significantly in future according to how they believe the economic situation will develop. Payback’s Consumer Monitor differentiates between four target groups: “Crisis denier”, “Crisis resistors”, “Smart shoppers” and “Crisis victims”.
Whereas the buying habits of “Crisis deniers” still demonstrate an extremely high level of stability in all categories, “Crisis resisters” will cut back on their spending in future, particularly in the areas of clothing, consumer electronics, car components and furniture. No major change in consumer behaviour is expected in basic categories such as food, cosmetics and household goods.
“Smart shoppers” on the other hand limit their spending in all categories except basic foodstuffs. They intend to purchase more of these products from discount stores and, above all, in shops closer to where they live.
The results of the study among “Crisis victims” are alarming. They are cutting back in all categories and intend to limit their purchases to the bare minimum.
The anonymous Payback study was developed using a two-tier approach, with shopper segments (online buyers, bio buyers, brand buyers, etc.) being linked to the customers’ current perception of the economic crisis. This perception and the associated segmentation are not static.
Payback assumes that the individual segments will shift significantly over the next few months, which means that communication activities will have to be adapted accordingly. “We expect a marked shift in buying habits over the next few months. The ‘Crisis deniers’ group will tend to get smaller, while the number of people in the ‘Crisis victims’ group will increase”, predicts Burkhard Graßmann.
This segmentation approach enables companies to target the different “crisis types” directly and dynamically and to adapt their promotion strategies and range of products according to demand – e.g. by strengthening their store brand strategy, offering special discounts or launching voucher campaigns.