"Unmarketing" to Increase Customer Loyalty
"Unmarketing" to Increase Customer Loyalty
Today's consumers expect honesty, authenticity, and integrity when dealing with a company. This presents a powerful opportunity for brands to differentiate themselves by telling customers that a purchase may not be necessary.
Research from Forrester found that 90% of consumers distrust brand messaging, including via social media. However, 70% of consumers believe in recommendations from friends or family. Using customer's demographic, transactional, and preference information to make appropriate and targeted offers based on what customers truly need, can break through that barrier of mistrust, increase sales, and build brand loyalty.
Honesty in marketing is not a new concept; but it's tough to execute when you're feeling the pressure of generating quarterly returns.
Invest in the long-term success of your company
When customer satisfaction and a good customer experience become more important than simply making sales, the company as a whole is elevated and the increased customer satisfaction will result in increased long-term sales. For some companies this requires a fundamental shift in culture.
However, this is a strategic investment in the long-term success of your business. Then, take it one step further to ask what might be considered the hard questions:
- Does this customer really need all of the products or services we sell?
- Should we tell the customer that he may not need something?
- How can we provide information so that customers can make an informed purchasing decision?
Of course, the initial reaction is not to ask those questions and not to tell customers they don't need something. We often hear the phrase “let sleeping dogs lie.” If you think about it, that's terrible way to view your customers.
Voice of the customer (VoC) research we've conducted indicates that customers are so appreciative of the few companies that are willing to be true consumer advocates that they reward those firms with loyalty and purchases. A recent example is cell phone carriers alerting customers that they're close to their plan limits. Sure, the cell phone companies will make more money if users go over their data limits; however, they've realized that this is often at the expense of customer satisfaction and loyalty.
A case study in looking out for the customer: Life Line Screening
“Telling people what they didn't need to buy engendered a great deal of trust and loyalty,” says Eric Greenberg, executive vice president of Life Line Screening , (LLS) is a provider of community-based preventative health screenings. The company screens nearly 1 million people in the U.S. and UK each year via more than 17,000 pop-up neighborhood locations. Its focus is to prevent the catastrophic effects of heart disease and stroke.
The company has been using VoC research to identify strategies for doubling its number of repeat customers. Among the findings was that response rates improved significantly when they used highly personalized follow-up communications a year later to indicate which health screenings would be beneficial to retake, and which screenings customers do not need to retake. Life Line Screening sent each customer a direct mail piece that listed the five tests initially taken and the results of each. Also clearly marketed within the mailer were recommended and not recommended tests.
The results were highly positive. “While revenue per customer declined slightly, this was more than offset by the increase in the number of overall responses to the renewal communications,” Greenberg said. This was reinforced by comments made during the VoC research such as, “I appreciated that they weren't trying to take every dollar out of my wallet.”
What does this mean for you?
1. Don't be afraid to provide information to your customers that could result in smaller short-term purchases if it is in the customer's best interest. They will repay you with loyalty and ongoing purchases.
2. To provide truly personalized recommendations, collect rich customer data and personal preferences. Once you start down that path, you must be aware of what we call the Reciprocity of Value Equation: Consumers recognize that to receive or access increasingly relevant information they must share increasing amounts of information regarding their preferences.
3. Be transparent about where personal data came from. This reframes data privacy concerns as a beneficial exchange of information that improves the customer experience. This information will constantly change, grow, and be enriched through two-way interactions with consumers.
4. Show customers that you're proactively looking out for them. Cell phone carriers are not only sending data usage alerts, but they also message travelers about international fees and even suggest using Wi-Fi at public places to save money.