Customer retention has become a major focus for businesses. Yet, loyalty as a concept is vague, and we are seeing growing interest across a number of channels and verticals within the market to define what “customer retention” means. Does it mean that a customer repurchases? Does it mean that a customer interacts with your brand on social media? Where does advocacy fit into the picture?
Many marketers equate customer loyalty with a points or rewards program, but it is much more than that. Loyalty is and should always be concerned with the behaviors and motivations of the key stakeholders of the brand. There needs to be a realiza- tion that all insight and interactions between the brand and customers should be built around a proactive process of matching customers’ expectations in terms of needs, wants, aspirations, channel preferences, etc.
There’s no denying that the brand/customer relationship has changed. The days when marketers directed the one-way delivery of information (what’s referred to as a traditional “push” marketing strategy) are long gone. Given the explosion of social media and the immediate availability of information, customers are now in the driver’s seat. Consumers, not brands, choose when, where, how and if they engage with a brand. As a result, virtually all metrics, including esteem and loyalty, are in serious decline.
As these empowered customers become increasingly savvy, marketers need to re-evaluate how they define and build customer loyalty. The issue, according to a recent survey of 129 marketing executives conducted by Loyalty 360—The Loyalty Marketer’s Association on behalf of Acxiom, is that although marketers know they need to focus better on customer retention, they aren’t doing it.