Customers are at the center of every business and catering to their needs is imperative. Although attracting new clients is often a top business objective, what about your existing clients?
Companies should be doing everything they can to cater to their current customers’ needs in an effort to create strong, meaningful and loyal relationships with them. Why? Because it takes 5 to 7 new customers to compensate for the lost of a loyal one. It is so much more effective to try to retain your best customers and nurture existing relationships.
As such, over the last 15 years, companies have progressively invested significant amounts of their budgets in building customer loyalty, primarily through a variety of reward programs. However, these loyalty programs have reached a high level of saturation and have become ubiquitous, no longer impacting and influencing customer behavior as they were initially intended to do.
This point is most clearly confirmed in Bond Loyalty’s latest findings from its 2017 Loyalty Report. The study found that only about 12% of loyalty members perceive their experience with their brand as better than that of non-members. More concerning is that about 55% of members did not know their points balance and 41% are unaware of their points value, demonstrating that member engagement is at capacity1. How can you be influenced and enticed to further interact and engage with a brand if you don’t even know how far you are from your next redemption or reward?
So how does a company stand out and ensure its delivering value back to its customers and members and is encouraging them to conduct certain desired behaviors? By personalizing the experience of course! Interestingly enough, Bond Loyalty’s latest report also revealed that many of today’s most common loyalty program features are the things that have the least impact on member satisfaction. Monetary features such as cash back rewards, promotions and discounts are still widely available across programs, but yield a below-average impact. A program’s experience features such as personalization are less common across brands, but score much higher on satisfaction impact among members2.
Technology and innovation in communications have certainly changed the way customers perceive personalization and why they stay loyal to brands. Loyalty, today, needs to be redefined to ensure to include the level of engagement retailers have with their customers across all channels. Customers expect to be recognized, valued and seen as unique individuals with specific tastes and needs who want to move seamlessly between online, physical stores and mobile devices and be rewarded based on their personal interests and preferences. Retailers must earn their customers loyalty and this can only be done by making the customer feel important and sending them relevant and time-sensitive information. It’s all about leveraging smart, customer-centric data to deliver a personalized experience that not only rewards customers, but transforms them into brand ambassadors.
It’s also important to understand that true loyalty isn’t just created or earned at the time of purchase but at every touch point - before, during and after purchase. If retailers really want to create a relationship with customers, they must be ready to reward more than just purchases or transactions, they need to account and reward for other types of interactions as well. Collecting and analyzing interactions or behavioral data help develop a comprehensive view of the customer throughout their purchasing journey across various channels. Who will have the ultimate competitive advantage and be able to build loyalty overtime? Those companies who are making the effort to provide more personalized and memorable experiences through the use of multi-dimensional insights at crucial moments in time and beyond just the transaction.
How about you? What’s your stand on all of this?1Bond Loyalty 2017 Loyalty Report