Customer Experience and Customer Loyalty – So Close - Yet So Far Away

many holding social When it comes to customer experience and customer loyalty, the two are closely connected and yet brands often struggle with how to integrate them effectively.

“Customer experience and loyalty are deeply linked on a personal level – and yet the customer experience team and the loyalty team don’t have lunch together very often,” Paul Conder, principal of customer experience practice for Lenati LLC, said Monday during his session, the CX Loyalty Experience, at the Loyalty360 Engagement & Experience Expo.

Larger companies, those “built for speed,” like larger retailers, healthcare and travel brands, often have the most challenges integrating customer experience with loyalty, explained Conder, because CX and loyalty initiatives tend to be split and work siloed through various departments.

When brands do fuse customer experience and loyalty strategies, the results can be profound. Conder, citing Forrester results, said brands that integrate CX and loyalty see customers’ willingness to repurchase increase by 71% and their likelihood to move away from brand loyalty decreases by 41%.

And just a 5% increase in customer experience can yield a 125% increase in profitability.

“Customer experience and loyalty are harmonious,” Conder said.

Conder has helped brands including Starbucks, Google, and Capitol One create memorable experiences for customers.

“(Customer experience) is about the customer journey; the moments that connect us with brands,” Conder said. “He said it’s often viewed on a “granular scale” rather than customer loyalty that takes a broader approach.”

From Macro to Micro

Condor suggests using an “engagement ladder” to understand the depth of how customers are interacting with a brand that includes input from all available channels.

“On a practical level, loyalty and customer experience teams are on the same track,” Conder said.

Both start with research, then segment, and then devise ways to intervene, create touch points to enable experience, perform tests and measure for ROI.

But where loyalty often takes a limited approach, customer experience departments have a “wider sandbox,” Conder said.

Alternatively, data derived from loyalty programs can help customer experience departments create important touch points.

From Micro to Macro

A streamlined experience can drive customer loyalty and spending, Conder said. He referenced the Starbucks app as an example. The brand’s simplified purchasing experience has significantly increased loyalty (and revenue) for Starbucks.

Deep personalization can also increase a brands’ bottom line. Sephora, for example, offers its customers tips on how to apply makeup and suggestions for brands based on past purchases.

And solving real user problems can reap big loyalty rewards. Conder, a former industrial designer, used Hilton’s app for builders and Uber as examples of enhancing a customer experience to build loyalty. Further driving CX and loyalty is membership personalization and curation like Nordstrom’s Trunk Club and Julep.

3 building blocks + 4 lenses + 6 tools = an integrated approach

Conder suggests using three building blocks for integrating customer experience and loyalty initiatives: Discovery, that includes identifying key aspects of the customer experience; ideation, including analysis; and testing, which Conder says is imperative, but sometimes scrapped because of costs and time.

He said that there are four lenses to measure the customer experiences’ success: cultural, practical, personal, and profitable.

And there are six tools to build customer connection: intramural insights, customer feedback, observational data, analytics, visualizations, and design valuation data.

Conder stresses continual testing, showing a photo of foam prototypes of Apple’s first mouse.

“I don’t see enough of this,” said Conder. “Try it out. Map it out. More need to be getting their hands dirty.”

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