The Future of Loyalty Is Data

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Joe Galvin, CMO, EVP, ClickFox
Joe Galvin, CMO, EVP, ClickFox

The future of loyalty depends on personalization and relevance, which requires always-current data and plenty of it. Unfortunately, most brick-and-mortar retailers are unable to track customer interactions either in-store or across all their touchpoints. This makes it challenging to provide the tailored experiences that promise to drive long-term retention and loyalty. By analyzing customer behavior, service issues, and drivers of satisfaction from the omnichannel journey perspective, we can determine the data that retailers should be focusing on.

Brand loyalty and capturing the service experience

Brand trust is a critical ingredient for shoppers to join the data-sharing programs necessary for targeted marketing and service campaigns that influence in-store purchasing decisions. Consumers remember negative experiences, whether it's a data breach or a disappointing in-store experience. Collectively, these moments erode the loyalty of the most devoted customers.

A recent ClickFox consumer behavior survey found more than 60% of consumers don't trust retailers with their data. Previous breaches of consumer data (32 %) and distrust of the retailer (28%) will prevent them from intentionally sharing data with brick-and-mortar stores.

Security breaches and consumer distrust present interesting challenges to marketers. Creating personalized product offers and service experiences that help to drive long-term loyalty requires customer data that in turn mandates some level of consumer trust—at least to be voluntarily shared.

Overcoming false positives: How to identify core drivers of customer loyalty

Customer loyalty begins when companies meet basic consumer expectations; loyalty will grow based on personalized experiences. Historically, companies have focused on one operational silo at a time to improve the customer experience, drive better customer engagement, and improve loyalty.

However, this is a false positive. Our industry experience shows that the accumulation of touchpoints that a consumer has with a company determines the overall brand perception and loyalty. To fully realize long-term customer loyalty, marketing teams need to shift their thinking from managing individual points of consumer engagement to provide an integrated omnichannel experience.  

Understanding the full customer journey across an omnichannel environment gives the company critical information by showing positive and negative service experiences across multiple points of engagement (or JHI, the journey health index of that experience). Companies must identify both positive and negative experiences for service channels to provide unique offerings such as incentive or recognition at the point of consumer contact. For example, if a consumer has a negative experience in-store with a purchase but then has a positive experience after contacting a call center, how will the associate nurture the customer with a personalized offer at their next touchpoint?

Overcoming obstacles and best practices for capturing data

Today, it's a rarity if a company isn't capturing customer journeys, demographics, purchase history, etc. Companies with more than 1,000 employees are already typically storing huge amounts of data—100 terabytes to over a petabyte. Companies that are more data-driven have demonstrated not only more loyal clientele, but also a competitive edge by leveraging cross-channel insights to drive their service strategy. We've found that a substantial amount of customer interactions with a company and its brand occur over multiple channels. To discover what insights drive the biggest value, it's necessary to understand the top customer journeys across all interactions.

In ClickFox's 2014 Consumer Behavior Survey, we learned consumers are more willing to share data with retailers for personalized incentives including free shipping options (27%), unique offers (23%), and recognition of prior service experiences (22%). Therefore, distributing untargeted coupons is not the right approach. 

Companies like Disney have paved the way for brands that engage with consumers by pioneering a personalized, experience-driven approach rooted in delighting the customer.  Disney recently launched MagicBands, RFID bracelets that store guest information including birthdates, theme park preferences, etc. Knowing precisely who you are, where you are, and what you're doing at the Disney theme parks allows Disney to tailor services and offer products that are most relevant to you, making the vacation experience easier and more fun for your family.

One reason guests agree (and pay) to share their personal information—including their exact location within the park—is that Disney establishes high brand loyalty over generations. Another reason is that sharing data means an immediately easier, more personalized experience. Finding out which of our favorite rides has the shortest wait times or having favorite characters know our kids' names without being told are powerful incentives to continue to engage.

The secret sauce has two primary ingredients: establishing trust and giving the personalized incentives that make it worth it for consumers to share their data.

Joe Galvin is CMO and EVP at ClickFox


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