There is no panacea in ecommerce. No one size fits all, silver bullet, cure-all for every problem. Oh sure, we’ve all been sold on the next great technology, the new killer app, the whatever 2.0. These bright, shiny objects beg for our attention and, in some cases, waste our time and money.
These new toys, of course, can be worthy of inspection, particularly if consumer adoption seems realistic and imminent. Remember life before search engines? Before e-commerce? Had those innovations been shrugged off as just more distractions to the core business (indeed, as some did), there would have been real growth opportunities missed. Of course, had these new opportunities been explored at the expense of the core retail business, there would have been a great cost there, too (that never happened, did it?).
My point is this: While it is important to embrace the new, it is equally important to ensure that all channels are maximized, even the unsexy ones.
Bringing Unsexy Back
I know this may not sound as exhilarating as a romp through an RTB campaign or a mobile app launch, but I recommend that most ecommerce businesses take a second look at affinity partnership marketing as a means of effectively acquiring and retaining customers. If you’re not familiar with affinity partnerships, take a look at any airline or hotel loyalty program and you’re sure to see several ecommerce retail partners who issue miles or points to consumers in exchange for purchases. There are also ecommerce sites which partner with larger membership organizations like AAA or AARP to offer unique deals to their members. Even if you’re familiar with the model, you may be wondering “why bother?” Here’s why …
Consider this: +75% of Americans belong to at least one loyalty program. And, there are over 1.8 billion loyalty program memberships in the US alone, meaning that on average, those who belong to a program belong to around seven programs in total. Participating as a partner in one or more of these programs allows your brand and offering to be seen by a lot of people.
Most affinity or loyalty programs have highly targeted audiences with generally desirable demographics for most ecommerce marketers. Looking to target consumers with more money than time? Consider an airline mileage program where you can target the top tier fliers. Looking for an older demographic? Have you tried talking to AARP about a discount program?
Generally, prospecting for new customers means fishing in a really large lake. But working with an affinity partner helps shrink that body of water to a more manageable pond where the fish are actually biting. The leg work of building an audience of like customers with a shared interest has already been done. All that needs to follow is an offer crafted to those consumers.
By partnering with an organization, there is an endorsement of your brand and your offering that is implied to consumers. It helps elevate your brand, and allows consumers to get over an important consideration hurdle.
The Happy Triangle
I remember when I was first introducing the idea of affinity marketing to a company. The CFO straight up told me I was crazy – a mileage partnership would never work in the long run, because not only would he have to pay for the miles to acquire that customer, but he would have to pay the same rate for every subsequent purchase, assuming the customers would continue to want a side of miles with their orders. In the end, it did work out because the deals were structured upfront to ensure that the program worked not just as an acquisition tool, but as an effective retention tool, too. It created what I call the Happy Triangle, meaning that all three parties are satisfied with the partnership. First and foremost, the consumer is satisfied with the product/service and with the resulting mileage award; the partner is satisfied with the extra revenue stream and with the value-add your offering brings to their program; and the merchant is satisfied with the new customers and dollars generated through the program.
Of course, like any other endeavor, this is not a build-it-and-they-will-come proposition. A good affinity partnership takes nurturing, strategic thoughtfulness and hard work. But the benefits can be well worth the effort.
So, while prioritizing which sexy, new channel to develop, don’t neglect effective ideas just because they may not seem as thrilling. There may be no panecea in ecommerce, but building an effective and diversified portfolio of marketing channels is the best way to safeguard your customer acquisition and retention strategy.