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Wikigains Reveals: Marketers are Divided Between Customer Acquisition and Customer Loyalty

In a recent marketing survey, 76 American companies were asked how they were offering discount coupons over Black Friday and the Holiday Season. The study aimed to discover the impact these promotions had on customer acquisition and loyalty. Here, with the help of Alex Papaconstantinou from UK-based coupon site www.wikigains.com, we take a brief look at what the study uncovered:

  • 75% of the participating companies would give up their margins in a bid to give their customers exclusive discounts
  • 84% of companies had the plan to offer promotions before the Holiday season
  • As industry data confirms, the study revealed that promotions and discounts were what sustained customer loyalty programs
  • 64% of the participating companies were either already offering or planning to provide exclusive promotions to students, teachers, members of the military and other classes of customers
  • 63% of these businesses admitted that they offered their customers these promotional offers throughout the year. 68% of these offers were offered online, 39% were provided in physical stores, while 37% were available through mobile devices.

Findings of the study

The findings of this study affirmed some well-known truths about the retail industry. These include the facts that customers look for discounts and that brands are willing to give up their margins to win these customers.

Many companies do customer verification using coupon codes, email, or manual ID checks. However, coupon promotions are very vulnerable to fraud. For instance, many existing customers can easily use fake names and alternative emails in order to enjoy discount offers intended for new customers only.

The brands that are averse to the use of exclusive deals claimed that this reluctance to make the offers was due to lack of IT resources or the fear that customers would enter false details in order to enjoy discounts that were not meant for them.

That half of the brands would be more willing to provide exclusive promotions if they were convinced that only the qualifying customers were going to enjoy them.

Customer Acquisition vs Customer Loyalty – as Analysed by Wikigains

After the findings of this survey, there are two schools of thought on the approach digital marketers should employ in consideration of the discount fraud problem. On one side, experts believe that establishing advanced customer verification technology would help.

On the other end, there are those who think the problem of discount fraud can be avoided if the companies placed greater focus on customer loyalty rather than customer acquisition. There might be something to be gained from considering the two ideas.

1.       Sophisticated Customer Verification Technology

It would indeed be unfortunate for brands to deal with reduced profit margins because some customers are willing to lie to enjoy discounts they are clearly unqualified to claim. To prevent this problem, digital marketing companies can come up with advanced technology that takes care of customer authentication problems that offer opportunities for discount fraud. However, this technology needs to be smoothened out for the customer; even as it helps address discount fraud in order to make businesses more comfortable with their promotional offers.

2.       Focus on Customer Loyalty

It is puzzling that some brands will only offer discounts to new customers, leaving existing customers with no other option but to lie so as to enjoy the offers. Why is it that companies don’t put that much effort into retaining the customers they already have? Through this discrimination, these brands are partly responsible for the discount fraud problem they have on their hands.

“Giving new customers only great discounts, and hiding those completely from your existing customers,” said the internet entrepreneur of Wikigains, “is in my eyes poor customer experience”.

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