Should you ever take 0 profit on orders to build customer loyalty?

I was thinking about something the other day.

Is it ever worth taking zero profit on an order for a repeat customer?

For a new customer it's different (e.g. loss leader strategy). It's riskier as you don't know if they'll reorder or have customer service issues that end up costing you. It can work, but it requires testing.

What about for an established customer though? One who has ordered previously and is showing the buying behavior you want to cultivate?

This wouldn't be a free order. It'd just be priced at your cost so if things went well your finances would be the same (income = expenses).

It's an idea to test.

Maybe start with your very best customers who have been the most loyal and roll out from there.

If you need help finding your best customers, start with the VIP and Loyal segments inside of Repeat Customer Insights. If it works there, then the Potential Loyal and High AOV segments would be good second tests.

Eric Davis

Retain the best customers and leave the worst for your competitors to steal

If you're having problems with customers not coming back or defecting to competitors, Repeat Customer Insights might help uncover why that's happening.
Using its analyses you can figure out how to better target the good customers and let the bad ones go elsewhere.

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Topics: Customer loyalty Discount

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