Use digital technology and personalisation to beat the discount challenge

Simon Miles, digital director, Coca-Cola Enterprises
Simon Miles, digital director, Coca-Cola Enterprises

Highly targeted digital marketing can help brands retain customer loyalty, writes Simon Miles, digital director at Coca-Cola Enterprises.

Building a cohort of loyal customers is key to the success of any brand – it always has been. What’s changed is that today’s post-recession shoppers are spend-savvy and unlikely to change their ways any time soon.

In this climate, retaining brand loyalty right through to the point of purchase is a big challenge, particularly for FMCG brands.

The question of where and why customers spend their money is "marketing 101", yet the proliferation of digital tech­nology can afford brands new insight into these age-old questions by giving them vast amounts of new customer-profiling data.

Digital allows brands to be smarter in how they create the perception of value across different customer demographics – for example, price promotions to specific audiences at key times of purchase.

We have applied this thinking to "the Diet Coke break". Digital enables us to incentivise shoppers to take one by delivering mid-morning promotions to office workers through social or mobile channels. If a shopper doesn’t fit the demographic, then they don’t receive the promotion. This is a far more targeted, and potentially profitable, promotions strategy aimed at creating bespoke,personalised offers for different audience groups.

Digital allows brands to be smarter in how they create the perception of value across different customer demographics.

Of course, shoppers should not be disadvantaged for displaying loyalty. Again, it’s about the perception of value. For a loyal customer already prepared to pay the standard price for a product, it’s better to enhance the value proposition by giving other incentives to purchase, such as unique digital content like videos, competitions and apps, as a reward for their loyalty.

Whether driving consumer loyalty through content or price promotion, timing and context is key, and retailers and brands need to work together to better understand the effect of factors such as weather, location and time of day on each customer’s purchase.

No matter how loyal a customer may be, reaching them at the wrong time, when your product is simply irrelevant to them, will reap no benefits. Digital marketing tools enable brands to make the time of communication as relevant and exact as possible, whether this is via iBeacons targeting customers within metres of your fixture, social-media campaigns engaging fans’ interest in a particular area, or SMS messages encouraging purchases linked to the weather.

The shopper obsession with price may be causing a headache for brands and retailers alike right now, but greater investment in personalised digital marketing holds the key to retaining loyal customers without hampering profitability through widespread discounting.

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