- Customer lifetime value is key for survival in today’s retail climate.
- Retailers can impact their future values by offering customers exclusive deals and rewards that drive both acquisition and loyalty.
- Honey rewards consumers at each stage of their shopping journey from product discovery to checkout.
Today, building a brand and expecting customers to engage because of great product selection isn’t enough. Finding and retaining customers in today’s increasingly competitive e-commerce landscape requires merchants to be highly targeted and relevant at all stages of a shopper’s lifecycle. That sounds great, but how can retailers do that? By delivering personalized offers that match the needs of their customers.
“Winning companies have a customer-centric approach,” said Jason Test, vice president, digital and in-store commerce at PayPal, which uses its Honey platform to help enterprises convert and retain customers by presenting them with highly relevant offers. “A loyalty program is successful not when it has resulted in customer acquisition, but when it results in retention. In addition to providing a superior shopping experience, the hope with loyalty programs is to turn a one-time shopper into a habitual buyer.”
Consider this: New customer acquisition costs have increased almost 50% in the past 5 years. Since not all marketing teams have a free-flowing budget to prioritize all stages of the consumer lifecycle, Honey is helping organizations reach customers with relevance at more stages of their shopping journeys.
One example of this in action is Princess Polly, an online shopping boutique in Australia and the US. Princess Polly partnered with Honey and a prominent YouTube influencer to help increase sales volume and drive revenue. Within the 10-day campaign, the company saw a 41% boost in revenue in Australia and 36% the U.S.
“Our target audience, Gen Z, is discount savvy,” said Kim Zorn, global performance director at Princess Polly. Users can get overwhelmed and frustrated when browsing through hundreds of unverified codes on coupon sites. Zorn found Honey solves this problem for them by offering valid discount codes right at the time of checkout. “It keeps the customer on the page, applies the discount code automatically, and therefore improves conversion rates,” she added.
How Honey works
When a customer first starts browsing products, Honey scours the internet for valid promo codes to help people save money at no cost. Merchants can take this a step further and feature their products on Honey’s shopping discovery site so existing Honey shoppers can also check out discounted products easily.
Customers that are ready to make a purchase get an auto-applied promo code with additional limited-time offers to encourage efficient decision-making and reduce cart abandonment.
Meeting customers where they are and giving them confidence that they’re receiving the best offer available reduces the need for shoppers to look elsewhere. Data from Honey shows using the tool has helped businesses reduce cross-site comparison shopping by 11% and increased the new customer repurchase rate by 38%. This reduces friction in shopping and helps increase the customer’s trust and loyalty toward the brand they’re purchasing from.
“PayPal and Honey have a unique ability to help retailers re-acquire and convert ‘lost shoppers’ who have shown high purchase intent, but left the website without making a purchase,” Test said, adding that leveraging shopping tools such as rewards and Honey Offers, PayPal can help retailers identify, engage, and convert potential lost shoppers and turn them into loyalists. “These tools can also help with personalization and geotargeting, helping brands speak directly to their buyer to stand out in a sea of marketing.”
Turning up the value of affiliate marketing programs
Beyond offering discount codes and rewards, Honey also helps merchants drive more value out of affiliate marketing programs. Data from Influitive and Heinz Marketing shows businesses with referrals have a nearly 70% higher conversion rate.
“Affiliate marketing helps reach customers in the online places they already feel an affinity for,” Test said. People are more likely to buy a product if their favorite influencer or a frequently read magazine recommends it. “Affiliate marketing represents both relevance and trust for shoppers.” A rewards solution (like the one offered by Honey) further offers a positive experience at each stage of the buyer journey, making users more likely to shop and return.
Such programs can encourage reluctant shoppers to finally go ahead and make a purchase because rewards and deals are a highly emotional trigger. In fact, 62% of Americans told Honey in its Consumer Shopping Behavior Study that they experience “fear of missing out on deals” when they pass up a deal that’s been presented to them.
Moreover, these deals seem to reduce buyer’s remorse as 67% of the participants said they feel less guilty about making a purchase if they found a deal or a coupon. That may be one reason that, when integrated with affiliates, Honey shoppers spend 47% more on average order value.*
Driving customer loyalty and multiplied profits with Honey
Honey creates positive results for merchants, affiliate marketers, and buyers.
“Honey increased our affiliate program ROI by 14% and is generating one of the highest ROIs within the performance department,” Zorn said.
From letting merchants control the discount percentage for offering lucrative deals to rewarding shoppers with Honey Gold points that can be redeemed for cash, gift cards, or shopping credit, tools like Honey make both the seller’s and the buyer’s journey more efficient and rewarding.
*Netfluential, Commissioned by PayPal, April 2021. Netfluential conducted an Online consumer survey of 1,000 online adult shoppers in the US (500 Honey Users, 500 non-Honey users) during April 2021.
This post was created by Insider Studios with PayPal.