3 ways food and beverage subscription businesses can convert traffic spikes into loyal customers

With social distancing the new norm, our favourite bars and restaurants are mostly closed until further notice. However, that doesn’t mean customers are willing to go without. Our new normal is logging into Zoom for virtual drinks and parties, or ordering a delicious meal or food box to change things up a bit.

If we take a glance at mid-April’s beverage subscription numbers, we can see a huge impact from this new normal, with a 243% increase compared to last year according to Nielsen. Currently, 50% of ecommerce subscribers have more than one active subscription. 

According to a snap poll on March 18th 2020, 60% of 18 to 24 year olds surveyed had already increased the frequency with which they use delivery services, while 40% of the 35 to 54 year old age group said they would do so. 

According to the same poll, 32% of consumers said they find the idea of ordering drinks to their homes from pubs, bars and restaurants appealing, with the proportion higher for those who drink out regularly. 

“Amidst changing regulations and expectations, having access to favorite and familiar foodservice and delivery items is offering consumers comfort during this difficult time,” says Christina Furlong, Consumer & Market Insight Specialist for Kerry Europe.

With this sudden boom in demand for food and drink subscriptions, many ecommerce merchants have access to a new and captive audience. Now is the time to focus on converting new visitors into long-term, loyal customers who will continue to order once social distancing and lockdown ends.

Here are 3 key strategies to convert sudden traffic spikes into repeat, loyal customers:

1️⃣ Turn guest shoppers into loyal members

Right now, there are zero opportunities to build trust through the traditional bricks and mortar experience. Customers can’t wander into your shop, cafe or restaurant and be charmed by your decor, your wait staff or the experience you offer.

The attention to detail that’s present in your physical space must therefore be translated effectively online. The ecommerce experience you provide for your customers is the first and last place they will interact with you. It’s crucial to provide an experience that is trustworthy, authentic and easy to engage with. 78% of shoppers are motivated to create an account if the sign-up process is easy, so encourage potential members to join your program by making it as quick and easy as possible.

For example, microdrink retailer, Waterdrop, motivates guest shoppers to create an account by offering them 100 points if they become a member.  

Waterdrops Loyalty Program

In order to make the sign-up process easier for shoppers and not lose their interest, Waterdrop uses a simple form that requires basic information.

Thanks to their strategy, now Waterdrop has over 80,000 members who have an average spend that is 66% higher than guest shoppers. They have also increased their members’ repeat purchase rate by 58%.

When guest shoppers become a member of your program, you can unlock data about their individual buying behaviors and deliver more personalized communications in return. This will help you to build longer-lasting relationships whilst also helping to make your email marketing more impactful.

2️⃣ Provide exclusive rewards to keep members engaged

Once you have a loyalty program with customers signed up to it, you need to make them feel special. We are experts at striving for more – as we get closer to achieving a certain result, we accelerate our behavior to reach our goals. When asked what made customers loyal, 74% said they are motivated by working towards a goal or reward and 79% of customers said being able to unlock exclusive benefits made them loyal

By creating a tiered loyalty program you can increase your members’ repeat purchase rates and spend by offering exclusive rewards and perks. Here you can see that Bakedin implemented a tiered loyalty program, which included a subscriber tier.

Shoppers who enroll into Bakedin Rewards, automatically become a “Home Baker” member and are able to earn one point per pound spent. To encourage members to move up to the next tier, Bakedin offers two “Brownie Points” per pound spent for Pro Baker members.

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To extend this VIP feeling, Bakedin created the “Subscriber” tier which allows subscribers to earn five points per pound spent and receive exclusive benefits that non-subscribers cannot unlock.

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As a result, their loyalty members who are redeeming rewarding now spend 55% more than their non-redeeming members. Also, thanks to their aspirational tiered loyalty program structure, their redeeming members repeat purchase 64% more than non-redeeming members.

Customers have come to expect VIP treatment from the brands they show loyalty to in today’s landscape. If rewards are too difficult or take too long to unlock, customers lose interest. 22% of members become inactive if it takes too long to earn points or unlock rewards that can be redeemed.

Rewards can include exclusive perks, free gifts, discounts or early access to new product drops. This sense of exclusivity gives loyal customers the feeling that they’re part of an exclusive club and helps them to develop an emotional bond between themselves and the brand. Emotionally connected customers spend twice as much as those who are merely satisfied with a brand.

Wine and liquor gift seller, Reserve Bar provides exclusive discounts for their loyal customers. If members earn 200 points, they can claim a five dollar voucher. However, if members collect 600 points, then they can redeem a $15 voucher.

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Thanks to this approach, their active members now spend 49% higher than their inactive members, helping them to earn more points and unlock their next reward faster.

As another example, Craft Gin Club, awards their loyal subscribers with exclusive discounts on their subscription box and vouchers to use on members’ store. For example, the subscribers who collected 1500 points can either apply a five pounds voucher on the members’ store or have a £15 discount on their Gin of the Month box.

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With their strategy, Craft Gin Club increased their repeat purchase rate by 46% and customer spend by 47% thanks to their redeeming subscribers.

3️⃣ Encourage referrals 

Referral marketing – or word-of-mouth marketing – builds significant trust in your brand. Now that you’re converting one-off customers into loyalty members, get them to act as an advocate for your store. 

When people have had a positive experience with your product or service, they will most likely let their friends and family know about it. This creates a sense of trust between your business and your potential customers.  92% of consumers trust recommendations from people they know, while 74% of consumers identify word of mouth as a key influencing factor in their purchasing decisions. 

However, referral marketing doesn’t happen nearly as often as it should. It’s easy for your customers to love your food or drinks and look forward to their next box arriving, but they will often forget to tell their friends about it. You can use your loyalty program to encourage your customers to refer your store to a friend or family member.

For example, you can send prompts to customers to share their recommendation, otherwise it’ll slip their minds and they’ll forget to do so. Put in place specific strategies to encourage your customers to refer others.

Here you can see that Craftshack implements a two-sided incentive. Meaning that to motivate their members to make a referral, they offer 100 points. And, to convert the referred friend into a new member whilst assuring the order, they offer a $10 discount if they spend over $35.

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In order to increase the number of referrals, you can promote your referral program effectively on social media, on your website or through email newsletters like Craftshack. By letting existing shoppers know the benefits of the program through your email marketing, you can encourage them to refer a friend in return for loyalty points.

You can also make referral marketing a key part of your overall marketing strategy by incentivizing customers to make active referrals to their friends through your loyalty program. The incentive to refer needs to hit the right note and must be meaningful for both the advocate and the friends they are referring to your brand.

For example, Nio Cocktails encourages their members to make a referral by stating that “rewards are better with friends” and offering six free boxes if they refer Nio Cocktails to six of their friends.

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As a result of their friendly and generous approach, Nio Cocktails increased their referrals by 92% in just two months. 

Key takeaways

At some point, lockdown will end and bars and restaurants will begin to reopen. However, the relationships that you start to build with new customers during this time can be converted into loyal, long-lasting relationships that continue well past the end of the crisis.  

By following the above three strategies to convert one-off customers into loyalty members, you can pursue steady, sustainable growth for your business during a period of uncertainty. Do everything you can to impress, reward and retain new customers so that they become loyal advocates for your business who will come back to order from you time and time again.

If you’re a food or beverage business and you’d like to talk about any of the retention strategies outlined in this post in more detail, then get in touch with one of our team – we’d be happy to show you some more examples or talk through your store’s unique challenges.

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