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The deals culture is shifting from customer acquisition to customer loyalty by necessity. Why? Deals have begun losing high-income women. That’s the view of Next Jump CEO Charlie Kim, a featured speaker at ILM East in Boston March 26-28.

“Daily deals had an initial surge then quickly lost flavor on a key customer segment — higher income women with jobs,” Kim said in an email exchange with us. “This segment is the most profitable to most merchants. Acquiring them as a loyal repeat customer is worth quite a bit over any other customer segment.

Are deals really losing these women? Kim said the explosion of daily deals has led directly to lower conversion rates. “Daily emailing of 50 percent discount offers quickly turned from value to fatigue users,” he said. “ Email response rates and all conversion rates took downward dips across almost every vertical. That’s echoed by all the e-commerce merchants we have talked to.”

Loyalty programs such as those run by Next Jump, however, have begun to reverse the downward course “Towards the second half of 2011, we managed to climb conversion back up. This was not done via targeting, but through loyalty. The growth of loyal repeat visitors increased conversion rates at every level 50-150 percent higher, category by category.”

Kim said loyalty is mostly measured as a byproduct of points and rewards. “From 2010 to 2011, as the points platform got stronger, we saw metrics increase as follows: 100 percent increase in first-time visitors converting into a transactor. 300 percent increase in single-transactor converting into a repeat loyal transactor.”

Kim adds that the big trend on the horizon will be ease of purchase — convenience. “Make it easy for me to find and buy what I need,” said Kim. “Earn my trust as a consumer, and even at good prices [not best], you will have my wallet share. This is how you earn loyal customers.”

Charlie Kim is a featured speaker at ILM East, which takes places March 26-28 in Boston. Other loyalty-related speakers include Jim Douglass, SVP, Cartera, and John Valentine, VP, SCVNGR/LevelUp. You can register here.

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