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Retailers are squandering time, energy, and investment on outdated loyalty models that don’t work. Those sentiments were expressed by team members at Baesman Insights & Marketing in an article published in Loyalty360 in late February.
The issue of changing customer loyalty was a prominent one at KPMG’s 2017 Global Analyst Day in Boston. Focused on the theme of “Shaping the 21st Century Enterprise–for Our Clients and Ourselves,” KPMG leaders shared client experiences, demonstrated new solutions, and offered insights with more than 60 leading industry analysts from around the globe.
“As we found in last year’s KPMG Global CEO study, nearly 90 percent of CEOs are concerned with the issue of changing customer loyalty and a large number fear their current product or services will not be relevant for their customers in just three years’ time,” said Tim Jones, global head management consulting at KPMG. “With a large majority of CEOs concerned about their organization’s ability to keep up with new technologies, customer-centricity will be a central driving force for the change, which needs to be both radical and quick.”
Prior to the event, KPMG surveyed the analysts to gauge their opinions on the relative impact of disruptive technologies. Cognitive technology, robotic process automation, and Internet of Things were ranked as the top technologies that will have the greatest impact over the next three years.
“Disruption knows no boundaries and, like us, our clients need to place innovation at their core in order to succeed,” said Mike Nolan, KPMG’s vice chair of innovation & enterprise solutions in the U.S. “By formulating governance and processes around innovation, companies can understand the emerging signals in the market, make smart investments, and build the right technology capabilities to successfully transform their business.”
At the KPMG event, leaders stressed the critical differentiation point of taking a holistic approach toward digital transformation to be competitive in today’s market.
“From building a mobile experience for customers and employees to implementing process automation in their IT and finance functions, too many are still experimenting with small technology-focused projects and not linking their business strategy with their digital strategy,” said Rick Wright, KPMG’s leader of digital transformation in the U.S. “Our clients who are having the most success in their digital transformation are those who understand and are quickly acting on digital disruption in their industry, create an outside-in approach toward customer experience, link front office experience to the middle and back office functions, and who drive culture change in their organizations.”
According to a 2017 Accenture survey, 78 percent of U.S. consumers are retracting from loyalty programs. Most of that withdrawal can be attributed to customers flocking to the most evolved programs that are more aligned to their expectations and needs.
While that benefits a select few, for most retailers, that means a shrinking customer base, less lifetime value and possibly the demise of a program.
“There are a lot of great loyalty programs out there, but to produce a transformative program, brands must obsessively focus the program on the individual customer,” the Baesman article notes. “Rewards are nice, they can produce a great model that completes the program’s objectives, but what if the program can truly change a customer’s brand view?”
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