An analysis of how retailers drive ROI through clienteling
2024 has seen the explosion of customer communication channel options, and significant shifts in the channels customers prefer the most. This is reshaping how retailers’ store teams interact with their customers. Following customers’ lead and prioritizing personalized communications as part of their customer engagement strategy is table stakes for retailers.
The Tulip Clienteling Benchmark Report examines the communication channels retailers utilize in their clienteling strategies for stores and store associates to communicate directly with their customers outside of the store in order to drive sales. It analyzes which channels drive higher conversion rates and sales values, along with how sales trends are influenced by clienteling strategies.
This blog breaks down the top 4 takeaways from the report, and offers insights to how these trends impact the industry.
#1 The usage of clienteling communications is increasing
Clienteling communications are direct communications from store associates or managers to individual customers via the Tulip Clienteling app. These communications are tailored to individual customer’s preferences and shopping history, which associates can track through the app. Once customers select their preferred communication channel, such as email, text, phone, or social media, associates interact with them accordingly.
In the past year, the average number of clienteling communications per store increased by 28%. This significant year-over-year increase suggests that Tulip retailers are increasingly leveraging clienteling to engage with customers and lift sales. This trend is likely to continue as retailers recognize the value of personalized customer engagement.
It is important for retailers to see that associates’ usage of clienteling communications is increasing because it indicates that their investment in clienteling was well directed.
Through a clienteling solution like Tulip, associates can better build relationships with their customers and understand their needs by providing personalized recommendations and offers. In turn, customers appreciate the personalized attention and recommendations they receive through clienteling communications, leading to higher customer satisfaction, loyalty, and, as we’ll see later, sales and order values.
#2 Clienteling communications convert better than corporate communications
Clienteling communications convert to a sale at rates ranging from 5% to 10%. Within the Tulip base, some retailers see clienteling conversion rates as high as 15% depending on the retailer’s maturity in clienteling. These rates demonstrate the significant lift in impact from clienteling communications in driving purchases compared to corporate marketing campaigns, which typically achieve conversion rates between 2% and 5%.
The higher conversion rates associated with clienteling should encourage retailers to use it as a high-impact strategy for increasing sales.
Understanding the impact influenced sales are having on conversion empowers retailers to develop targeted communications and sales strategies that resonate with customers. It can also help retailers differentiate themselves from competitors in a crowded marketplace and provide a more engaging and memorable shopping experience for customers.
#3 An increase in clienteling communications correlates with an increase in influenced sales
Between January 2024 and May 2024, across the Tulip retailer base, a 41% increase in clienteling communications resulted in a 64% increase in influenced sales transactions.
By increasing their clienteling efforts, retailers can drive even more sales and improve their bottom line.
While many retailers recognize the importance of clienteling and have it as a business practice, they may not have a way of tracking influenced sales and cannot see the impact of their efforts in clienteling. This data provides a clear case for retailers to invest in a clienteling solution like Tulip that will equip them with the ability to track the impact on sales.
Retailers who don’t use clienteling communications can use the data above to build the business case for implementing it as a regular selling practice. If retailers already use clienteling as a way to increase sales, they should consider doing more of it, given the direct impact clienteling has on sales.
#4 Influenced sales are more valuable than average sales
The value of an influenced sale is 136% higher than the value of an average sale. This gap has been growing in recent years, with Tulip influenced sales average order values (AOV) moving from 113% higher than total sales AOV to 136% in the last 12 months.
This trend shows that a sale generated through clienteling is at least twice as valuable as an average store sale. In fact, Tulip influenced sales AOV has been at least 100% higher than total sales AOV since at least the start of 2022. Given that, it’s reasonable to assume that the value of an influenced sale will continue to be at least double the value of an average sale.
This data shows that not only do clienteling communications result in sales, but also that those sales are more valuable than an average sale. So, by investing in a clienteling solution like Tulip, retailers can predictably drive the highest value from their customers.
Bringing it all together
The Tulip Clienteling Benchmark Report reveals valuable insights into the evolving customer communication preferences and the impact of clienteling strategies on retail sales.
The report highlights the increasing usage of clienteling communications, their higher conversion rates compared to corporate communications, the correlation between increased clienteling communications and influenced sales, and the higher value of influenced sales.
These trends underscore the importance of retailers prioritizing personalized customer engagement through clienteling to drive sales and improve customer loyalty. By leveraging a clienteling solution like Tulip, retailers can optimize their customer engagement strategies, enhance the shopping experience, and ultimately increase their bottom line.
Learn more
Download the Tulip Clienteling Benchmark Report for a deeper dive into these takeaways and more specifics such as the communications channels with the highest conversion into sales, the communications channels that result in the highest value sales, and the most popular communication channels around the world.
If you’re ready to learn more about how Tulip Clienteling can get similar results for your brand, book a demo to speak with one of our retail experts today!
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