Lifetime Value Triggers Key Ingredient for Long-term Customer Loyalty

Creating practical customer engagement habits that benefit both business owners and their employees usually helps lead to long-term brand loyalty.

Pamela Herrmann and Patty Dominguez cofounded CREATE Buzz (www.createbuzznow.com), an online training experience that helps business owners and their employees get powerful, positive, and practical customer engagement habits that build loyalty.

Dominguez, Chief Strategist, and Hermann, Chief Storyteller, combined their efforts in a compelling interview with Loyalty360 to discuss a variety of topics related to customer engagement, customer loyalty, and how to create buzz offline and online.

Herrmann is a best-selling author, host of the podcast ‘Customers For Life’, and national speaker on the subject of creating uncommonly awesome connections.

How would you characterize the current state of loyalty marketing in the U.S.?

Loyalty marketing is in a bit of a Catch-22. Loyalty, by definition, is a sentiment we feel for our family and friends, so in order for a customer to feel a level of connectedness to a brand, there has to be extraordinary leadership who understands the far-reaching value of this sentiment to the bottom line.

The understanding of the value has to start at the top and, only with inspired leadership, will they be able to drive a strategy into their organization and change their hiring and training process.

At the other end of the spectrum, we have the customers who we believe inherently want to feel loyalty to people and things, but whose loyalty is easily broken with brands. When expectations go unmet and employees haven’t learned a customer recovery process, then customers quickly shift gears into indifference toward the brand. Ironically, it’s never been easier for a brand to stand out because so few businesses know how to morph a transactional customer into a relational customer across all touch points.

When companies understand one simple metric, the Lifetime Value of their customer (LTV), then their awareness shifts into thinking, “If I want to increase my profits, I need to increase my LTV and reduce my customer acquisition costs.” Only then are they ready to have a more meaningful discussion about how to do that.

To create buzz offline and online, what are brands doing well and where are they falling short?

Brands who master loyalty understand that there are changing market forces at play that are affecting their ability to get and keep customers. The economic forces and the two key metrics that pull the profit lever (CAC & LTV). The social forces driven by consumer behavior, their psychology and Customer Experience (CX). And the technology forces that were designed to create efficiencies and help you amplify your message in a massively expanding omnichannel marketing world, but are creating a lot of confusion about which is the right choice. So most make no decision … which is positioning them even further behind in an increasingly competitive business environment.
 
Creating lifetime value and brand advocates is the goal for any marketer. What are the main things a marketer can do to achieve success in this regard?

If you want to increase the lifetime value of your customer, you have to study their customer journey.
Looking at the online customer journey, consider that it’s all about one word:  Relevancy. The ultimate measurement of relevancy is dictated by Google. Do they recognize you as a brand?  The way to get recognized is through extraordinary user experience.

Drive highly targeted traffic to a website or blog where they’ll receive value. Retarget them with offers. Google will look across all online platforms to see what the brand is ...  Google searches, Bing, Yelp, FB, Pinterest, etc.
Creating content that Google can see consistently across a variety of platforms is critical in order for Google to reward you with high rankings in the search results. Online relevancy is easy to measure: Are your automated emails getting opened and are people clicking through the links? What’s the click through rate (CTR) on your ads? How many web visitors are opting in? Is anyone engaging with the content you’re creating? Your service or product may be highly relevant but if your brand message is off or if you don’t know who your ideal customer is, then this is where the marketing game is won or lost.

Offline customer journey mapping … it’s looking at all of the touch points that a customer experiences as they are interacting with your brand. For example, we see communication gaps happen that equate to lost opportunity and ultimately lost revenue.

For example, in a restaurant if a guest asks the server for gluten free bread, and the answer may be no, but we see this as a bigger opportunity.  If this is a recurring request, there’s clearly a trending need that in most cases doesn’t escalate to management. This is where a process for communicating these customer needs is so important to staying in tune with what the customer is looking for.

Success for a brand happens when it meets and exceeds the needs of the customer. The end result is customer loyalty.

What is more important? Customer retention or customer acquisition?

It depends on the objective of the initiative. If you’re a startup and you need eyeballs on your brand, then lead gen is most important. If you have a business that feels stuck with growth strategies, one of the biggest opportunities is to tap into the current customer base with organic growth strategies such as a referral program. Retaining customers means the lifetime value is increasing, which creates a sustainable business.

How does customer loyalty fit into this bigger CX picture for marketers?

If you want to shift from a transaction-based company into a relationship-based company, this can be the driver for higher profits. The companies that stand out in customer experience understand this as a differentiator and invest in systems to standardize this within their organization.

What are some types of good promotional strategies and which ones don’t fare as well?

Contests are a great way to let your customers do the promoting for you, especially video contests.

Our clients are encouraged to leverage video platforms like SnapChat and Periscope to build a fan base and they are seeing amazing results, gaining legions of followers in a matter of months. Of course, it requires consistency, but once they commit to the outcome and begin to see results, they are all kinds of fired up.
We were looking closely at a Container Store video contest and though they had the right idea, (getting customers to talk about their brand), however the guidelines were so tight as to what they wanted that it became obvious it was less about the customer and more about what the marketing department wanted.

The contest rules were over-squeezed. When you flip your thinking to, “Tell us about a product you love and why?” As opposed to “Here’s what we want you to say about how awesome this product is.” Clearly you get different energy behind the result. It’s far more authentic and more ‘sellable’ messaging when you give customers latitude to create their own messages. Besides, you learn a lot about your brand when you let those outside the jar read the label.

Can you talk a bit about effective customer personalization and how companies can make those all-important emotional connections?

A simple engagement question at the start of a transaction is, “What brought you in today?” Mining for information with the customer in the interest of creating engagement opportunities and being a solutions provider. Teaching employees, who are the frontline to your business, important communication skills can be the difference between average customer service and creating a customer experience that will stand out.

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