We use cookies to help us improve, promote, and protect our services. By continuing to use the site, you agree to our cookie policy.

Accept
June 6, 2018

Use case: Real examples of promotions that drive customer loyalty.

Jagoda Hryszko
« Go back

Companies that offer everyday products know that the frequent need to buy doesn't necessarily lead to customer loyalty. From the perspective of consumers, when a store fails their expectations or just doesn't show them commitment, there are many other brands to choose from to find the same or similar products. Last time, we came across a very interesting promotion from zooplus.pl, a Polish branch of the pet accessories e-commerce giant. Zooplus set their marketing strategy towards building customer loyalty and increasing retention rate. In this post, we are going to show you the tactics they use to keep customers coming back every time their pets lack any products.

What’s the idea?

Zooplus offers their regular customers a “Cost Reduction Program” which allows them to save 3% of every purchase. The invitation to join the program appears in the customer’s cart at the checkout. The cost of getting the fixed discount is small and dependent on a chosen expiration date. For example, to use the promotion until the end of the year, customers have to pay an additional 10 PLN fee, equivalent to a nominal €2.5.

Finally, when an order is made, the discount is assigned to the customer profile.

Let's explore the other attributes and limits attached to the discount.

Limits and rules.

Every time a customer uses their discount, their savings and order history are updated in the customer profile. Zooplus allows a customer to discount their purchases as long as the total value of the order history doesn't cross a maximum of 12500 PLN (€2912). Besides the maximum amount of all orders, Zooplus also assigns a minimum required value to each purchase. Both limits help to secure their budget and also help the store to upsell.

The program is available only in the native country and costs of delivery are not included in the discount. An essential element is that the fixed discount is always limited in time. However, available options offer only long-term expiration dates.

Now, we’re going to explain why this idea works and builds a loyal audience for Zooplus.

Why does it work?

It may seem that forcing a customer to pay for access to a promotion is risky.

In fact, this tactic makes the incentive work more effectively than if offered to customers for free. Why?

People pay much less attention to things they get for free. The symbolic price that Zooplus requires to share in the discount actually increases clients’ motivation to use it. It's already paid up, right?

The paid discount provides customer engagement and keeps the discount memorable.

The other thing is an expiration date. The store puts a time limit on every program and, thanks to this, Zooplus keeps offering the standalone 3% off only to the group of customers who make it the most beneficial for the brand. Otherwise, the invitation to join the program is a one-time offer.

There is one more detail which makes this “Cost Reduction Program” effective. The moment that a customer is offered a discount creates a feeling of endowed progress. A customer doesn't have to look for a discount, place a special code or do anything else, just finish the purchase. At the checkout, a customer can easily remove the invitation to join a “Cost Reduction Program” from the cart but primarily, they get the discount and savings at their fingertips. We wrote previously about "endowed progress" and customer loyalty in this post.

Summary

The Zooplus program is an example of a simple but effective e-tool to sharpen up retention rate. Firstly, promotion limits like minimum/maximum order value and expiration date secure the Zooplus budget and increase average spend. Secondly, the paid fixed discount works as a great incentive. The key to making this kind of promotion work is well-tailored limits and a proper balance between the cost of a discount and its value for your regular customers.

Tagged:
customer loyalty
,  
best practices
,  
referral program
,  
« Go back
Related posts