Trends to Watch: 12 Ingredients for Baking in Customer Loyalty
There's no secret recipe to building and maintaining customer loyalty, but there are essential ingredients that marketing, in particular, can add to the customer experience mix. From relevant and proactive communications, to customer listening and personal connections, to preference-based multichannel interactions, marketers have myriad opportunities to build customer trust, bolster engagement, and cement customer loyalty. The challenge, and opportunity, is selecting the precise blend of those ingredients to cook up a loyalty strategy appealing enough to satisfy today's exacting customers.
With that in mind, Direct Marketing News asked several industry insiders the following: What is one essential ingredient to loyalty marketing today? Here, industry leaders share their opinions of current loyalty marketing must-haves.
Loni Kao Stark
Director of Product, Solution & Industry Marketing, Adobe
The essential, but often forgotten, ingredient to loyalty marketing is trust. In a world of multiple devices, competing social apps, and infinite distractions, loyalty is, and will always be, built on a bedrock of trust. Trust that a brand will respect one's time and only present relevant content. Belief that data captured by a company will be kept private and used only to make interactions more delightful, and that like fine wine, the customer experience improves with age as the marketer gains greater context.
This important ingredient must guide all loyalty marketing tactics. Too often, I see marketers fall victim to loyalty marketing based on coupons, points, and discounts, paired with email or banner ad spam. This is a price strategy. True loyalty marketing results in customers willing to pay a premium for a product or service because they trust the brand and customer experience over the long haul.
Director of Loyalty Programs, 89 Degrees
It's said that any fool can make something complicated, but it takes a genius to make it simple. And this concept is certainly true in loyalty, where the essential ingredient for customers is simplicity. Customers don't crave simplicity, they demand it. Loyalty programs have to make enrollment, earning, tracking, and redeeming rewards simple across all channels. Too often, programs lose sight of one singular truth: Loyalty programs are created so that customers can engage with them. Loyalty programs and retailers thrive when customers engage. Make this engagement simple! Practically every retailer has a similar value structure, so customers won't jump through hoops to engage in your program; but if you don't keep it simple, they just might jump to your competitor.
Cofounder and CEO, SessionM
More than 70% of American households belong to multiple rewards and loyalty programs.
What drives most of these consumers is the fact that their favorite brands recognize what's important to them and know how to keep them happy. It's a proven system that works outside the digital app space, so as we become consistently more reliant on our mobile devices, it presents an incredible opportunity for brands. But there is also the challenge of defeating the other activities that compete for consumers' attention when they're on their mobile devices. To do this, brands must identify their power users. This is the essential ingredient to a successful loyalty marketing program. Looking beyond just age or demographics, brands must understand who the most active users are, what's most important to them, and how to keep them happy. The rest will follow.
Director of Customer Culture, Eloqua
My essential ingredient is personal connection. I truly believe that knowing your advocates and connecting with them as people makes all the difference in the world in the effectiveness of loyalty marketing efforts. This means visiting them in person whenever you're fortunate enough to be in their area. There's nothing like getting a feel for customers' daily environment to help them become “real” to you, and there's nothing like a cup of coffee (or something stronger) after work to help you become real to them in return. It means dropping them a handwritten note, congratulating them when you see via LinkedIn that they were recently promoted. It means celebrating their successes with your product and being available to listen if they have frustrations. You know all those great manners that your mother taught you when you were young? It means using those and being real.
In the Age of the Customer, active, real-time engagement is the most critical ingredient to loyalty marketing. The right mix of engagement practices—both social and traditional— brings customers together with a brand in a meaningful way, making them feel heard and connected. This customized connection nurtures satisfaction and builds trust and loyalty. To effectively engage customers, brands must ensure that the content they push out is personalized, relevant, and data-informed. Technology, such as enterprise feedback tools, CRM, and social CRM, can mean the difference between active and passive engagement. Turning customer feedback into actionable insights can not only inform brands of preferences and attitudes, but also empower them to improve the customer experience. When done in a well-timed and wellstructured way, active engagement creates considerable value for the customer, building long-lasting loyalty, which can present itself in brand advocacy, and ultimately, brand evangelism.
A loyal consumer is an engaged one—someone who goes out of their way to find, use, and advocate for your brand. To foster true loyalty, marketers need to understand their customers' needs and then recognize their loyalty through communications across all channels, whether inbound our outbound, online or offline. Marketers cannot expect to effectively reach and maintain a dialogue with customers if they don't examine and understand when their customers want to be contacted, where, and how they're using each channel.
Marketers who listen and speak to customers across multiple channels have a clear advantage. Those who are successful will find that they reach a much deeper level of customer understanding than what is achieved by working in channel-specific silos. Loyal customers expect brands to respect their preferences and channel choices as the foundation for a successful communications dialogue.
The key to establishing and building greater loyalty needs to be a part of every interaction you have with your customers. Start small and experiment within their preferred channel, and slowly evolve as you find out what works for your brand and your customers.
Vice President of Marketing, SoundBite Communications
Proactive, personalized communications is an underutilized loyalty marketing tool. Proactive communications can highlight relevant opportunities, concerns, and other important information that people want to know, such as special deals, fraud alerts, power outages, and upcoming appointments. Consumers increasingly view these communications as positive, brand-reinforcing experiences and appreciate being thought about in the “proactive” sense.
The optimal solution for interacting with today's customers involves a cross-channel mix that includes traditional media, direct mail, and mobile-device avenues such as voice, text, email, and apps—a multichannel approach helps ensure timely customer engagement wherever they are.
Each customer is different. Thus, communications that treat customers similarly miss the mark. A preference management strategy will ensure that you respect customer preferences and provide personalized and relevant outreach, resulting in stronger engagement and positive customer experiences.
Brands that proactively connect with customers will quickly discover that making the transition from reactive to proactive can be a game changer.
The secret is to be able to listen carefully, evaluate, and respond to what your customers do—and [in B2B] understand your customers' customers. Marketing automation tools, like Eloqua and Marketo, will help you understand which messages are resonating, and with which audiences. A social media platform, like Radian6, will also help you monitor online conversations, spot customer engagement opportunities, and return quick, meaningful responses.
But having the right technology is just the beginning. It's critical that companies also have the right processes and culture in place to empower every employee to own customer engagement opportunities that lead to sales. Similarly, to win loyalty, everyone in the organization needs to understand the changing expectations of buyers, and be able to respond. As a result, marketers must increasingly focus on ensuring that everyone from the C-suite down has clear visibility into customer interactions, and create a free flow of information across functions.
President, Pitney Bowes Software
People are driving their own brand experiences today, and current loyalty marketing must-haves are designed to meet consumers at (or soon after) critical touchpoints with rewards. Current loyalty marketing must-haves are location intelligence, right-timed rewards, and omnichannel one-to-one messaging.
- Every customer interaction today is enhanced with location intelligence. More personal messages blossom with references to a town, store location, or city. From calculating taxes to knowing when to offer a discount on ski jackets or jet skis, location informs the message.
- Right-timed rewards deliver the opposite feeling of having a coupon declined at the cash register because it's expired. Right-timed rewards acknowledge recent purchases, website visits, toll-free calls, and catalog orders. They tell the consumer, “We see you, we value you, and we want to take our relationship with you to the next level.”
- Omnichannel consumer conversations deliver seamless connections. For example, the online chat operator references a recent in-store purchase. The cashier views each consumer's reward status and delivers additional discounts on the spot.
Director of Product Marketing, Allegiance
As loyalty marketers struggle to stay relevant, they often obsess over the market's sexiest new developments, while ignoring more obvious and authentic opportunities to connect with customers.
The missing ingredients? Listening to customers, addressing their issues, and then telling them about it. When tech leader VMware introduced a major price change, it got a very clear reaction from customers: Go back to the old model. Determining that this actually would make business sense, executives decided to listen. But they didn't just make the change. They marketed it. At a major customer event, VMware's CEO told the audience, “mea culpa,” and got a standing ovation for his direct, relevant message. Mainstream press, like The Wall Street Journal, even picked up the story.
After all, nothing could be more relevant than showing customers, “We care about the same thing: You.”
VP, Client Services, KBM Group
Loyalty programs are at their most effective when part of a larger consumer engagement strategy. These programs should help create an overarching brand experience that influences social media, ratings and reviews, and referral to friends, or advocacy—the Holy Grail of customer loyalty programs.
Nearly all programs require point calculation and management, but the most successful programs include benefit tiers by engagement level and the ability to earn points outside of a purchase transaction. To manage this kind of program, you need a self-contained infrastructure that allows for a configurable rules engine, which is easily manipulated to meet changing program strategies and special program offers. Within the infrastructure, rewards and loyalty data must integrate in real-time and support multiple redemption options within the customer experience. And, it should all be able to fit seamlessly within your current marketing and operational systems.
Founder and CEO, Experience Engineering
The ingredient that is essential to leverage in creating loyalty is an understanding of the key emotional constructs that are the underlying unconscious foundation driving loyal behavior. It is about the enhancements in an experience and how they cause us to feel. So, it's not about what we get as much as it's about how we feel about what we get.
What makes customers loyal is not so much what they have to gain, but more about what they fear losing. Essentially, we're more deeply motivated by losing something than we are by what we can gain. What causes us to be loyal to an airline program is fear of the loss of privileges.
We're witnessing critical drivers to loyalty being the experiential enhancements that cause us to feel more valued and more important; it's fear of losing that recognition that keeps us loyal. It's all about what enhances how our experiences cause us to feel, and not as much about the “rewards” we get.