The age of information and connectivity has powered millennials with endless product options and an equally baffling number of ways to assist them in making a choice. However, what makes millennials stay loyal to a brand is the experience more than the economics. In his session at the Retail Jeweller India Forum 2018 (RJIF), Hitesh Malhotra, Chief Operating Officer, Nykaa, elaborated on the need to woo millennials and treading the fine line between new and loyal customers, develop an in-depth understanding of the customer journey and how to best influence their decisions to achieve sales conversions and quantify brand loyalty.
A clearly demarcated customer profiling is important to understand and predict buying patterns. While millennials are brand loyal but the parameters to understand loyalty have changed. “We have optimised our marketing costs and tried to understand our customers to such an extent where we also have their loyalty,” explained Malhotra, adding that the first technique of identifying potential customers can be made easy by using stealth technologies like uploading customer lists on social media to gauge their preferences and seeking agency help to map phone numbers with social footprints. An in-depth research deduced three types of customers –“the beauty aficionados, short-on-time and make-up newbies.” The first category comprises of hard core loyalists who will buy from a single retailer because they don’t want to deviate from the experience and brand value they are used to. The second category has professionals who are exposed to online shopping and value convenience and prompt product delivery. Women in their early 20s, inspired by make-up blogs and with a huge network of influence constitute the third category. “Understanding this split will help any business strategise and have recurring customers,” he explained.
Tracking customer touch points
The next task is to identify and understand the touch points of the different groups by tracking websites and social media channels that customers visit and their networking patterns. For this, it helps to work with a sample from the database and study their socialising habits in the virtual and real worlds. Malhotra explained how they got in touch with a television channel that claimed a 186,000 viewership for a particular show airing at 8pm every Saturday. The same show, when streamed on the OTT platform Voot, had a staggering 1.6 million viewers at the same time. “Traditionally, markets would have spent a lot more money on TV advertisements but it’s evident that the content is being consumed 10 times more on OTT platforms due to convenience of viewing on portable devices.” In this case, not advertising on OTT platforms is missing out on the right touch point.
A brand’s best efforts in search engine optimization and their presence in social media conversations translates into sales and quantifies brand loyalty. Malhotra informed that Nykaa has reached a market position where if 100 customers look up the brand on Google, 50 will buy from them. While sales impact from mainline and hoardings are difficult to calculate, “statistics have helped us deduce that 71% of our site visitors coming through a reference and 67% customers exposed to print advertisements make purchases.” Such market considerations are vital to confirm the touch points.
Quantifying brand loyalty
A brand should next focus on defining the type of loyalty they hope to achieve. The Indian jewellery industry is such that “jewellers cannot expect repeat purchase like in FMCG or for perishable products. If, for instance, a jeweller has a 6,000 loyal customer base buying jewellery at least once a year from him, his focus should not be the 6,000 sales. Instead, the jeweller should concentrate on the nearly 40,000 social media conversations by those 6,000 customers through word-of-mouth promotions to influencers online,” he added.
Malhotra stated that online retailers have the advantage of evaluating consumer behaviour and understanding their loyalty from the multiple data points on their website. If, for instance, 100 customers visit the Nykaa site, few will chat with customer service experts, some will read the Nykaa DIY questions and answers, large number of them will compare the prices with that of competitors, others will search for a particular brand, very few will add to the cart, some may go to a coupon site to lessen the amount while only a handful (2-3) will eventually make a purchase. “These numbers lead us to a customer’s three-phase journey – educate, motivate and facilitate,” he explained.
Educate, motivate and facilitate customers
For an industry such as jewellery, that thrives on opinion, this is a crucial phase of the buying cycle. Since “jewellery retailers lack the expertise in educating customers adequately about their product of interest”, Malhotra stressed on the importance of ‘content in the form of videos and do-it-yourself blogs.’ Another way to achieve this phase is by displaying the top 10 purchases by your most trusted customers to positively influence the mind set of new customers. Motivating customers equals to convincing them that buying from that specific brand is a superior decision. “Product-specific commercials on major media channels with celebrity endorsements are a part of this convincing phase.” Retailers should also use their networking skills to have loyal customers, market experts and socialites review the products and create a credible impression.
Malhotra concluded his presentation by categorising customers and how best to nurture loyalty inthem. “If you want new customers, educate them. If you want to get more out of your existing customers, work on facilitation. If you see more people walking in and less people buying, motivate them.”