In an environment where consumers are feeling the financial squeeze and there are many worthwhile causes, how do charities build customer loyalty? Sarah Farquhar, Head of Retail Brand at Oxfam, explains.
What do you do with the good clothes you no longer wear? Do you put them on eBay? Recycle them? Give them to charity? Oxfam has the massive task of incentivising people to do the latter, and in particular giving them to Oxfam.
Oxfam operates in a highly competitive marketplace with a lot of other charities competing for donations and volunteers.
"Many donors like to spread their support across a few different charities," said Sarah, "and we also compete with organisations like eBay where people can sell their unwanted items rather than donate them and so incentives are sometimes greater elsewhere."
So the challenge is to create lasting loyalty to the charity. Sarah has three tips for doing this:
- Say a meaningful thank you, whether that’s in a shop or after the interaction has taken place (or both).
- Demonstrate the impact of a customer’s support using tangible examples.
- Create an emotional connection to your cause so supporters want to recreate the feeling by interacting with you again.
These aren't the only ways Oxfam builds loyalty. It also uses social media. Within this channel, like others, it puts an emphasis on good customer service: responding to questions as quickly as possible. "Social media acts as our online shop front," said Sarah.
It addition it makes sure the content is relevant to the audience, saying each channel has a different audience and social media content should not be one size fits all. Finally it does regular updates so users have a reason to come back and see what's new.
Oxfam has an army of volunteers and supporters around each of its shops. These supporters are engaged digitally as well.
"There’s so much data and insight available to make the customer experience in the digital space highly personalised. Online users expect you to know their purchase history and to create relevant, compelling offers when they next visit your site," said Sarah. She said there are many ways of engaging people from a local community with their local Oxfam shop, through geographic targeting or sending targeted emails (e.g. when a new shop opens we send local supporters in the area a preview email). Event-triggered communications also offer the opportunity to really personalise the customer experience. For example, Oxfam sends shop donors a text message or email when their first item sells.
When it comes to emotional loyalty, Sarah refers to her previous points – doing a good job of thanking customers, creating emotional responses and making sure the customer knows the difference that their support makes. "For Oxfam shops, a personal connection with our staff and volunteers is so important – the Oxfam shop should feel a core part of their local community," she said.
This year Oxfam launched a partnership with Nectar so customers can now collect 100 Nectar points when you sign up to our Gift Aid scheme in shops (‘Tag Your Bag’) and 2 points per Â£1 when their donated goods sell in our shops.
"Offering this incentive gives us that much-needed competitive edge on the high street and develops loyalty, as we know that the decision about which shop to donate to is often based on practical considerations such as where to park," said Sarah. "It’s a win win really – people can feel good about supporting Oxfam’s work fighting poverty but are also able to treat themselves at the same time. It’s allowed us to access an entirely new audience and we hope this will lead to better quality, more frequently given donations for our shops."
Oxfam's emergency development work reached 15 million people in 94 countries in 2012. In the UK it's high-street and online presence makes it a known name, but loyal customers and donators is really what the charity thrives on.
At this year's Europe's Customer Festival, Sarah Farquhar will be speaking about the importance of customer loyalty and you don't want to miss out on her insights.
You can also get a great run down of this and other interviews and case studies, including Aimia’s Jan-Pieter Lips, in Total Customer’s completely free Little Book of Loyalty.