The BFCM opportunity (almost) everyone is missing: Holidays in the age of conscious consumerism
This is an extension of my recent blog post with Loyalty Lion. You can view it here.
There was a time when BFCM was simple: You holiday-theme your storefront, put together a couple of deals, acquire new customers with the sale, and make a note to upsell them after the holidays.
But today’s BFCM landscape is different.
- 58% of consumers say that BFCM deals impact their trust in brands.
- 59% feel that brands focus on winning new customers over making their existing customers feel special during BFCM.
New customers are now less trusting of brands during BFCM, while existing customers are feeling left out and undervalued, as made clear by these and more findings in The New Discount Playbook, a recent research published by Loyalty Lion.
But these stats also tell us of a bigger shift:
The old model of buying short-term attention is breaking.
More than anything, today’s consumers are craving human connection. They are looking for brands that can help them derive a sense of meaning, and belonging to a greater good.
Yet, most e-commerce businesses are failing to meet this need because they are operating from a purely transactional mindset.
But this is great news for you, because you have an opportunity to stand out.
This article explains the shift in consumer behavior, why it was accelerated after the pandemic, and how to prepare for it so you can win this BFCM and beyond.
# 1: What changed?
It’s no secret that it’s been increasingly more expensive and more challenging for brands to stand out to customers, let alone sustain their interest over the long run.
But few of us realize the magnitude of the shift that was brought about after the pandemic.
Think of the amount of noise that was already present before the pandemic, between media, advertising, and user generated content.
Think of all the pre-existing e-commerce stores, competing for that attention too.
Then, came the pandemic; and global e-commerce activity exploded, resulting in a massive surge in advertising costs.
Meanwhile, consumers have been forced to seriously reconsider their priorities. Between job losses, increased social isolation, and heightened awareness of their own mortality, we’re seeing a sharp rise in mindfulness, allwhile blanket consumerism is becoming even less appealing.
But here's the catch: Conscious consumerism has already gone mainstream. Being ethical is a standard now, not a competitive advantage. And so, in the overwhelming abundance of “goody-good” brands with good BFCM deals, customers are looking to cut through the noise. They are looking for meaning, genuine human connections, and a sense of belonging to a greater good.
It’s not that they have shorter attention spans, or less interest in good bargains. It’s just that there is an overwhelming abundance of these options, but an extreme lack of love and genuine care in the transaction.
# 2: Why loyalty is going to be crucial this BFCM (and beyond)
This BFCM, there is an opportunity for your brand to stand out and carve out a place in the minds and hearts of consumers, at a fraction of the resources it would take during any other period.
Think about it: Most e-commerce businesses will be bombarding them with endless sale campaigns, while their operations are suffering (as they usually do during BFCM), and consequently their customer’s experience.
But rather than being seen as another pushy brand with a discount and subpar fulfillment, shipping, or customer service, you can be that one brand that delivered a great experience that they didn’t expect, and create a raving fan from the get-go.
This doesn’t mean that you shouldn’t use discounts or other incentives to help get the first sale, but your most important work is done afterwards. Providing a phenomenal product and brand experience means kickstarting a long-term relationship that is more likely to result in much higher profits and sustainable growth for your business.
Want more “concrete” reasons to prioritize loyalty-building this BFCM?
- Your paid ads will perform better:
When you have engaged customers and brand advocates engaging your ads, they will get better results for lower costs, since advertising platforms favor engaging ads.
- You don’t have to obsess over your CACs
You’re probably not going to be profitable on your first transaction. With increased CLTV, you can afford to increase your acquisition costs, and delay your breakeven. For these calculations, I always recommend Lifetimely, a great tool to help you make better financial decisions.
- Referrals & word of mouth
It goes without saying that loyal customers are more likely to sing your brand’s praises and bring new customers.
- Free customer-generated content
Loyal customers are more likely to associate with your brand, creating, publishing and sharing content for no external incentive.
# 3: How to create and sustain loyalty
Step 1: Create an emotional connection
These questions will help you start on the right foot when capturing the attention of new customers.
- Why does your business exist, other than to make financial profits?
- How is your business making lives better?
If you’re still unclear, ask your best customers what makes your brand special to them.
Don’t just ask repeat buyers, but go for the extreme outliers, and raving fans. Those whose repurchase frequency, order value, and engagement rate are much higher than average.
Step 2: Build Emotional Capital
Don’t drop the ball once you’ve captured their interest. Now is the time to maintain long-term attention and encourage loyalty, by building Emotional Capital.
Emotional Capital is accumulated by delivering a series of emotionally impactful experiences.
The following 3 points are not exhaustive, but should cover most of your bases:
- Make the value clearly higher:
It goes without saying that your product should deliver on its promise. But to make a lasting impression on your customer, you have to exceed the expectation.
The bigger the gap between perceived value and price, the more impactful the experience.
Don’t just use this as an opportunity to get rid of slow inventory by throwing in a cheap item that no one wants.
Sometimes they value something else, maybe an easier shipping experience, or faster customer service, or heck, prettier packaging. Understand what your customer actually wants, and give it to them. Remember, the value is based on their perception.
- Take charge of every part of their journey:
Rave-worthy brands don’t ask their customers to “get in touch with USPS” when their package is lost. They don’t blame anything on the manufacturer, 3rd party fulfillment center, shipping courier, or the weather.
Whether or not you do it in-house, you must take responsibility with every touchpoint. A simple rule of thumb is this: If it affects your customer’s experience with your brand, then it is your responsibility.
- Take care of your team members’ well-being:
Here is an interesting observation: How your team feels about work is a good indicator of how customers feel about the brand.
It shouldn’t come as a surprise, but the mental and emotional state of your team members affects your customer experience far more than you realize— even if they are not in direct contact.
Step 3: Strengthen loyalty behaviors and turn them into habits
Even if you have made an impression on a customer, their loyalty behaviors will likely be sporadic and up to chance.
To make them more consistent, we need triggers, and rewards.
Best practices for the Reward:
- Make it timely: If there is a time lag between the reward and the behavior, no positive emotion is associated with the behavior, and no habit is established.
- Make it repeatable: It’s important to design quick and consistent wins to create and keep momentum.
- Make it worth it: The perceived value of the reward should be motivating enough to take the action. The bigger the ask, the higher the reward.
Again, this goes back to knowing your customer. If you understand their problems and desires, you know which incentives will motivate them the most.
That’s why Sephora incorporated other incentives, such as exclusive content (free beauty classes), and custom makeovers (a desired service, and a chance to upsell on more products).
Here are some loyalty incentives near-guaranteed to make your customers feel appreciated this BFCM:
# 1: Give them a free and exclusive product
If you’re looking for tried and true, this might be the earliest loyalty program in history- and the most potent: It has been going strong since the 19th Century.
In the mid 1800’s, Sweet Home Laundry Soap (a New Hampshire merchant) started giving out copper tokens to buyers, which they could later exchange for premium products only available for purchase to these token owners. This was a huge success and lasted throughout the 19th and 20th Century.
This works for a few reasons:
- A gift in the form of a physical product feels more real
- It rewards them for being a customer and connects it to a feeling of exclusivity
Here is a similar modern day example from Mirenesse:
# 2: Surprise them with unconditional points:
Surprise your existing customers this BFCM by depositing an unexpected, unconditional balance of loyalty points in their accounts. Then, send them an email or message along the lines of “remember to gift yourself too, this year.”
Why it works:
- The surprise element alone creates a dopamine hit
- Unconditional giving is more generous and better received
# 3: Make the giving charitable
In the The New Discount Playbook, 63% of consumers said they wanted brands to give them an opportunity to contribute to a charity or initiative aligned with their values.
Instead of giving discount rewards for their loyalty points, customers can choose from a variety of charitable actions, such as giving away free meals or planting trees.
Why it works:
- It can be more satisfying than taking a few dollars off a purchase
- It associates a good feeling with the brand
- It reaffirms your brand’s alignment with their values
- The holiday period is prime time for giving
# 4: Expand your giving to their friends and family, too
If you want to weave your brand into their lives even further, help them give to the people they love.
Every positive review a customer leaves is a chance to connect and get a referral.
To do this, integrate your Loyalty Lion account with your review app, and your email service provider. Here is a list of all native integrations.
Then, create an email segment targeting any customer who has recently left a positive review, and ask them to use their personal referral link to refer 2-3 people who might like your brand (or to join the loyalty program, if they’re not yet members).
Be generous with your giving, and remember that while it can feel nerve-racking to give out too many points, you are not aiming to have a profitable first transaction when acquiring a new customer. Make sure to do the math on what you can give responsibly, using a tool like Lifetimely.
Your messaging counts, too. Help them sell your brand with your own set of value propositions. Here’s an example from Annmarie Skincare:
Photo credits: Annmarie Skincare
For more alternative discounting and incentive strategies for this BFCM, you can download Part 2 of The New Discount Playbook here. Or check out the Loyalty Lion Academy Course for the webinar titled “Six ways to turn one-time BFCM shoppers into long-term loyal customers”.
- Today’s consumer is craving human connection, a sense of meaning, and belonging to a greater good.
- Brands that are going to win are prioritize loyalty and relationship-building
- This BFCM, rather than purely eating into your profit margins and hoping that these acquisitions will become profitable in the future, use incentives to capture short term attention, then build emotional connections and a long-lasting relationship.
- Use a tool like Loyalty Lion to further strengthen loyalty-behaviors and help turn them into habits.
- Your brand’s relevance to your customer is ultimately determined by how abundantly you place their interests above profit.
Ironically, doing so is the most reliable path to increased profitability.