Key takeaways:
It can cost from five to 25 percent more to acquire a new customer than to retain an existing one.
An increase in customer retention rates by five percent boosts profits by 25 to 95 percent.
Return customers increase the emotional appeal and likability of a brand.
China is a large and diverse market, so global brands have found it increasingly difficult to lure and retain repeat customers. Without the right marketing strategy, even the most acclaimed brands can fail or lose market share to upstart competitors.
The U.S. Chamber of Commerce reveals a study by Gartner Group showing that 80 percent of a business’s future profits will come from 20 percent of its existing customers. Additionally, research done by Bain & Company highlights that an increase in customer retention rates by five percent boosts profits by 25 to 95 percent. And Harvard Business Review emphasizes that it can cost from five to 25-percent more to acquire a new customer than to keep an existing one.
Return customers also increase the emotional appeal and likability of a brand. As loyal followers, these customers become brand ambassadors, so they have the power to trigger strong emotional responses in their communities. Brands that understand how to leverage these emotional connections will win big.
Considering how repeat customers increase a company’s profit margins, sales, and earnings, it is hardly surprising that brands are constantly trying innovative ways to attract and retain them.
Let’s take a look at the most effective strategies for attracting repeat customers in China.
Investing in collaborations
In a “label-obsessed” culture like China’s, co-branding partnerships and collaborative marketing both work with returning customers because they double exposure and brand affiliations.
According to Danny Parisi, a fashion reporter at Glossy, brand collaborations are very popular in China, “and their frequency and popularity are growing each year.” Lending a note of credibility to his argument, Parisi highlights a 2019 report from Gartner L2 showing that the percentage of businesses promoting brand collaborations on Weibo had increased from 62 percent in the first quarter of 2018 to 80 percent by the midpoint of 2019.
“We’ve seen a big ramp-up in brand collaborations recently,” said Christina Fontana, the head of fashion and luxury for Tmall Europe, to Glossy. “The retail environment in China is very competitive and very fast. Brands always want to create buzz and give people a reason to talk about them.”
Several brand collaborations increased the perceived value of both businesses and scored big points with customers. Loewe x The Beast, Uniqlo x KAWS, Longchamp x Emotionally Unavailable, and CONVERSE x Feng Chen Wang were just some of the high-profile collaborations that appealed to customers in China.
Read More at https://jingdaily.com/return-customers-china-strategies-burberry-alibaba/
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