Sarah Simon, VoC Consulting Director at Confirmit, is a new motorcycle rider and she sees a correlation between her hobby and the challenges loyalty marketers faced with their customer experience initiatives.
Confirmit hosted a webinar in May titled, “Behind the Handlebars: Customer Experience Lessons Learned on the Road,” and Simon was the featured speaker.
Loyalty360 talked to Simon about this unique comparison during an intriguing interview.
Can you talk about how the lessons you learned as a new motorcycle rider mirror the challenges loyalty marketers face in their CX initiatives?
Simon: Loyalty marketers run into a lot of the same challenges as CX pros. For example, they often struggle to make other areas of the business understand the value that loyalty programs can provide. As such they struggle to get the support they need. To resolve that, it is important to get an executive sponsor, someone who believes in what you are doing and can help you to navigate the political waters.
This ties closely to the motorcycle rule of staying safe at intersections. Functional intersections are dangerous places for loyalty marketers. You need to slow down to look around and get to know your stakeholders. Knowing your colleagues’ destinations is important so you can answer “What’s in it for me?”
Also, just like CX professionals, loyalty marketers need to maintain stability through forward motion! Stop-and-go CX activities can damage your loyalty programs which are, by definition, long term. You will benefit most from a structured, well-planned program, and the stability of your program is improved when energy and effort are regularly injected into the initiative over time.
How would you describe the current state of CX initiatives put forth by loyalty marketers?
Simon: In the past, loyalty marketing was completely internally (company) focused. Their loyalty programs, for example, were manufactured without any consideration to the customers’ needs or the deeper factors that drive customer behavior. Recently, however, there has been slight shift in that thinking. While this shift is moving in the right direction, loyalty marketing still has a way to go. I’ll give you an example.
In speaking to a loyalty marketing professional recently, this person confided that their app isn’t getting much traction with customers. They assume that improving the function and flow of the app by leveraging UX strategies will drive customers to use it. While, this is initiative is indeed more customer-centric than we’ve seen in the past and thereby a movement in the right direction, it is not enough to drive their desired results.
Loyalty marketing professionals need to be thinking big picture first! In my example, the focus on whether an app is intuitive is tactical thinking. Loyalty marketing needs to start with strategic thinking, focusing on whether their loyalty program is providing the value customers demand in exchange for their loyalty.
Most importantly, successful strategic-level planning for loyalty marketing cannot occur in a vacuum. Loyalty marketing needs to adopt an outside-in approach and collect customer feedback to get this right. You need to know what’s most important to your customers so you can design a program that will drive positive customer behavior.
What is being done well with these initiatives and where do the challenges lie?
Simon: The biggest challenge I see is changing paradigms. Often, we are still seeing companies employing a “hostage approach” wherein the loyalty program is solely structured to benefit the company – not thinking at all about how they can delight the customer. And, the fact is delighted customers ARE loyal customers and delighted customers result in positive financial benefits for the company such as increased share of wallet and positive word-of-mouth advertising. Again, I will give you an example.
This is a personal example. Most supermarket loyalty programs are very weak. For me and many other shoppers, those programs don’t impact where I shop, how often I shop, or what I buy. There is almost no benefit to me for being loyal to one supermarket over another.
At the same time, supermarkets get excited about the “big data” they are collecting from their loyalty programs. Unfortunately, most of us customers sign up and forget it. I signed up for many supermarket loyalty programs a long time ago. A lot of my demographic information has changed. I shop at several different stores – no one store has all my shopping data. So, supermarkets should also be considering whether or not their data is accurate.
Still, many supermarkets have let their loyalty programs stagnate. They have gotten ‘comfortable’. They think that the data collection from their loyalty program is a success but they are not stopping to consider the customers’ behavior or the true degree of their loyalty. With that, they aren’t innovating or looking for ways to reward customer behaviors that will have the biggest impact on the bottom line. By definition, a loyalty program should make me, the customer, loyal to a single supermarket brand. But that’s just not the case for most shoppers.
At the other end of the spectrum, my preferred hotel chain makes me want to be loyal to their brand. They have made it about more than just an insignificant discount. The more I use this chain, the higher my status and that higher status qualifies me for benefits that are important to me - like room upgrades and early check in. And, my preferred hotel chain knows what benefits are important to me because they are leveraging that outside-in approach that starts with asking the customer for feedback!
CX is seen as such a key differentiator today. How can brands enhance their respective CX offerings and attract new customers, while retaining existing ones?
Simon: Companies need to strategically reevaluate their loyalty programs. I cannot stress enough that this needs to be done from outside-in.
It all starts with collecting feedback from loyalty program members. But, you can’t stop there! You need to learn what customers are really saying. You need to listen to customers’ unsolicited feedback on social media, review sites, blogs. The combination of surveys’ quantitative data and the qualitative data you can get from these social media outlets will help you to really understand what drives positive behaviors, retains customers, and brings in new customers. I will give you another example.
I was preparing for a consulting engagement recently and did a Google search on the company. In less than a minute, I found an entire customer forum dedicated to the company’s products. When I mentioned it at the start of our consultation, no one in the company knew that forum existed. Not one person in the company had ever read through these comments – comments that are publically available and shaping people’s perceptions of my client’s brand. This forum was full of customer insight. But before our meeting, my client wasn’t benefitting from that insight because they were completely focused internally. To me, this is inexcusable in this day and age where technology for analyzing text and social media is readily available.
But this just goes to show how critically important it is to focus your efforts on an outside-in customer experience design – where you start by looking outside your organization to identify what customers want then design the customer’s experiences in a way that will drive positive customer behaviors.
What is your advice for loyalty marketers that have tried various CX initiatives, but have not secured the success they had hoped for?
Simon: I have talked to a lot of loyalty marketers over time and many claim to have tried and failed with CX initiatives. When I asked about their methods, however, I have consistently found that they simply didn’t do CX, as I define it. Most have tried “CX” initiatives that are manufactured with the internal view in mind only. And that just doesn’t work.
They have never tried this critically important outside-in experience design that I referenced before. They aren’t listening to their customers’ feedback. They aren’t paying attention to the comments customers and the wider market are making about their brand. And without that feedback, they cannot implement a loyalty program that delights the customer and actually drives loyalty.
The saddest part of this is that many of the companies with broken loyalty programs have a dedicated CX team. Unfortunately, the loyalty team and the CX team are siloed, disparate groups that are often working at odds! Many companies forget that loyalty and the customer experience go hand-in-hand. Your loyalty program is part of your customers’ journey. The loyalty team and the CX team must begin collaborating heavily if you want to see tangible business results.