Loyalty Takes Listening

Today’s empowered customers are more likely to be loyal to companies that best understand their needs, goals, and preferences. Doing so means listening—and listening well means a comprehensive voice of the customer (VoC) program that’s closely aligned with marketing.

Additionally, marketers must stay attuned to marketing’s influence on the customer experience; for example, communicating a brand promise that their company can deliver on or sending relevant, timely offers rather than impersonal blast messages. Customer experience has a strong correlation to loyalty metrics, such as repurchase intent, recommendations, and retention, according to Forrester Research. Again, customer listening is imperative; it will amplify customers’ satisfaction or dissatisfaction with the customer experience.

“Too often, companies struggle to hear what the customer is actually saying about them. There is a disconnect between brand perception and brand promise,” says Larry Freed, CEO of customer experience analytics firm ForeSee. “They need to hear it from the voice of the customer themselves to build loyalty.”

Some marketers think that a customer loyalty program will suffice in terms of their efforts to help build customer loyalty. However, as important as those programs are, they’re not enough now that the customer journey has become more complex. “I always recommend [that companies] focus much more on a sustainable and systemic approach, where you’re actually treating customers in a way that they want to be loyal, rather than a points program where you’re trapping them in to a relationship,” says Andrew McInnes, director of product marketing at customer service and experience solutions firm Allegiance.

Freed agrees that marketers must not assume that customers enrolled in a loyalty rewards program are loyal to their brand over its competitors. “Companies that have loyalty schemes have to look at the new customers joining and see if they’re making a decision because of your loyalty scheme, or whether they would have made this decision anyway,” he says. “Through VoC we can start to find that out.”

Does VoC measure up?

In fact, VoC initiatives can inform whether points programs and other loyalty marketing efforts are effective. “If you don’t have that measurement it’s almost like running your business with your head in the sand, because you’re doing these programs and you’re getting false positives and negatives,” Freed warns.

Of course, the definition of loyalty differs for different brands; some focus more on behavioral loyalty, while others care more about attitudinal loyalty. This means that success measures will vary, as well. For Julie Kaplan, executive director of marketing and customer experience at Healthy Directions, a natural health and supplements firm, loyalty equates to repurchase. “When we mean loyalty it’s not an emotion or feeling, it really means the customer comes back over and over again,” Kaplan says. “Loyalty is the biggest revenue driver for our business.”

Healthy Directions started its VoC program two years ago, working with Allegiance, by emailing a weekly product survey that included Net Promoter Score questions on likelihood to recommend. A key insight that arose early on was that customers repurchase from Healthy Directions if they notice that the products are making a difference to them.

Kaplan notes that rather than having to make major changes to the company’s marketing, the feedback was “great confirmation” that it already had the right loyalty strategy in place to generate repurchase.

One of the changes customer feedback catalyzed, however, after the company discovered that product efficacy drives repurchase and reduces return rate, was to make its product labels and inserts easier to read to ensure that customers know whether to take the supplement at a certain time, because usage impacts efficacy.

The initiative now includes relationship surveys, touchpoint surveys, and text analytics, and is moving towards a more automated listening system. Kaplan says the program has proven to be a “great success” to the business and has helped her team discover actionable insights that are used across the business every day.

Based on the marketing initiative’s success, Healthy Directions’ creative execution of promotions, creative direction, and target marketing now reflects specific insights gleaned from customer feedback, both qualitative and quantitative.

The boon and bane of social listening

Asking customers for feedback like Healthy Directions does is imperative, but “listening” to their input through external channels has become unavoidable for companies due to the growth of social media. The rise in popularity of blogs, forums, and social networks provides fertile ground for marketers to track conversations about their brands and an opportunity to respond in real time. “The customer is more empowered online and can voice their opinion on Facebook or Twitter, meaning, if they’re frustrated it’s likely that will end up in the public domain,” says Evan Klein, founder and president at customer feedback firm Satrix Solutions. “The cost/value equation that measuring VoC in an online environment creates is also much improved.”

Forrester Research shows that, in 2011, 29% of consumers used a social channel to complain. The research firm expects this figure to grow as younger generations age and new generations of highly social consumers enter the marketplace, making VOC in social media of high importance for marketers.

Listening to complaints and compliments on social media gives marketers another source of feedback that they can analyze to give a wider perspective on customer experience. The nature of social media means feedback can be gained more readily and from a wider audience, meaning agile companies can respond to it promptly, which ultimately drives loyalty.

It’s possible to take social insight a step further by opening a conversation with customers in that channel. Marketers can use social networks or online communities to start a dialogue on specific topics, like launching a new product, and then use customers’ input to design the product, explains Azita Martin, VP of marketing at customer engagement platform Get Satisfaction. This type of cocreation can positively impact loyalty because customers feel that they’re involved and being heard.

“Companies underestimate how much consumers care about giving product feedback,” Martin says. “Loyal customers love to be recognized and have their own voice on your website and other places. The ability to respond to it builds amazing brand loyalty.”

Martin explains that it’s possible to build dynamic VoC content, such as product reviews, right into an online forum or product pages on a brand’s website. This is a boon to marketers because customers share detailed opinions in context, which increases their engagement while creating better informed buyers. She cites as an example Morrison-owned baby e-commerce store Kiddicare, which saw an 8% drop in cart abandonment and a 5% increase in search traffic to the website after taking this approach.

Closing the loop

Marketers must not fall into the trap of listening to only the vocal minority, says Foresee’s Freed. “The squeaky wheel can get a little bit too much attention sometimes, and if you ignore the silent majority you won’t get a truly representative audience,” he says.

To avoid this “extreme bias” in the data, Freed recommends that marketers focus on gathering VoC insight over time and from across channels, not just one-off direct feedback. “You need to listen on a continuous basis and understand how internal and external [factors] can influence your customers’ expectations,” he says.

Understanding, tracking, and measuring those influencers can be a great asset to marketers in their loyalty-building VoC efforts—when they take action on what they learn. Listening without taking action can be perilous.

“An area most companies struggle in is responding and reacting to feedback,” Freed says. “It’s a common complaint among customers that having spent the time completing a survey, it goes into a void, never to be heard of again.”

Although paying lip service to listening to customers’ views and failing to act on them could significantly erode loyalty, not all input requires action, notes Satrix Solutions’ Klein. However, all feedback should be acknowledged. “Demonstrating commitment to customers is one of the most significant aspects of a successful [VoC] program,” he says. “But one fallacy associated with customer feedback programs is that management may feel obligated to do everything customers want.”

Klein explains that some customers may express frustration over the fact that a company’s products or services are too expensive, for example, but it might not necessarily be the right business decision to align with such customer requests. On the other hand, if marketers are communicating a specific brand promise that their company’s products or customer experience aren’t delivering, then either the brand promise or the products or experience need to change or customer loyalty may suffer.

Consequently, VoC shouldn’t be a silo within marketing, but integrated across the entire business to ensure the greatest positive impact on loyalty. “One of the biggest challenges is mind-set,” McInnes says. “To do [VoC] well it needs to be accepted as part of every function in the business, not handled by marketing alone.”

Kaplan explains that when Healthy Directions launched its VoC program it was a complex undertaking. “The difficulty was how we went about installing it in the organization, amid all the ordinary day-to-day things we have to do.”

As it turns out, convincing the organization of the worth of the VoC initiative didn’t take long. “We were fortunate that we quickly surfaced quality insights that we use in our organization every single day,” Kaplan says. “The VoC program became embedded in the organization very quickly, with people across the business using its insights.”

It’s clear that setting up a comprehensive VoC program requires time, commitment, and resources, but with ever-increasing customer expectations, ignoring the voice of the customer is no longer an option for marketers who are charged with building customer loyalty. “It’s really all about creating a culture in which understanding customers’ needs is part of the organizational DNA,” Klein says. “This commitment should not be underestimated; it offers a tremendous way to differentiate your business and build loyalty.”

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