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Loyalty programs are as common today as ecommerce sites. Every B2C brand has some form of loyalty solution, whether published or behind the scenes. Retailers are looking at consumer transactions and driving promotions by re-targeting campaigns and offering customers personalized programs. For technology provider HTK Limited, making sure that all the elements of a brand’s program are designed perfectly is of the utmost importance. Only at this point can data, insights, and targeted campaigns take shape and drive results.
Recently, Loyalty360 sat down with Marlon Bower, CEO of HTK, to take a deeper dive into the company’s customer loyalty strategy.
What is the single most important thing that you have done that has helped a client increase customer loyalty?
The most important thing we do for our clients is help them shift their perspective on loyalty. Traditionally, earning and growing loyalty has been the responsibility of a points program and the team that manages it. But true loyalty is based on the customer’s experience of doing business with your brand, and most of that happens outside the confines of a program.
So, we redirect the focus from a single (often failing) program to a business-wide agenda. We take an open, frank approach to assessing a client’s existing loyalty program, and identifying the elements that are no longer working. Then, we help clients develop and implement a loyalty strategy that looks across the entire customer experience.
What is the biggest challenge that your clients face in driving deeper customer loyalty?
We see a lot of brands struggling to move beyond the traditional transaction-based model of loyalty to something based more around engagement and emotional connection. Plenty of brands are stuck in this old approach, where you award customers points based on spend and those points eventually earn them discounts. Unfortunately for brands, this model is becoming a lot less effective. It’s a combination of too many programs doing the same thing, and changing customer expectations in terms of how they engage with brands.
Customers are looking for more personalized experiences that they can connect with emotionally. That emotion doesn’t have to be something really profound. It could just be: “This brand makes me happy because they know what I’m interested in.” It’s about feeling that their relationship with a brand is recognized and valued. It definitely goes beyond the feeling that the brand is only interested in their wallet.
The trouble is, most brands simply don’t manage their data in a way that supports that kind of one-to-one engagement. Rather than a centralized database that the loyalty platform and other key systems can access, essential customer data is processed and stored in separate systems. And that makes it really difficult to move towards an engagement-based model.
How sophisticated are most brands’ customer experience and customer loyalty initiatives?
Most brands’ approach isn’t very sophisticated at all. Forrester’s most recent CX study found that the majority of companies were making very little headway in terms of improving the customer experience. It’s a difficult thing, because it stretches across so many facets of the business, so getting everyone aligned can be a challenge.
Data is at the heart of the issue. Joining up various touchpoints across the business is still a struggle for a lot of brands. It’s not just getting the data shared between different systems. It’s ensuring that the decisions made based on this data are consistent so that a customer receives a seamless experience.
For example, you might want to recognize that the customer at the till, who just swiped their loyalty card, is a high-value member that hasn’t purchased in a long time, so you can give them a welcome back offer on their current transaction. But getting all the necessary systems—loyalty, ePOS, CRM, etc.—talking to each other in real-time can be a challenge.
How important is personalization?
Marketers have been hearing about personalization for so long that it can often feel a bit overhyped. But personalization is extremely important, and it’s something that most brands still haven’t really mastered. Personalization is a key component of a great customer experience and an important driver of emotional loyalty. Customers who feel recognized and valued by a brand will feel more deeply connected to it, which increases lifetime value, loyalty and advocacy.
And it’s not just about knowing that the customer usually shops from a particular department or owns product X. That level of personalization is becoming the baseline. To stand out and make an impact on loyalty, brands need to anticipate customer needs and understand multi-layered data to make better recommendations that go beyond segments to something more one-to-one.
Poor personalization (or no personalization), can be off-putting. It says to the customer that the brand doesn’t really know who they are or what they’re interested in. A decade ago, it wouldn’t have mattered so much, but now, customers know that brands can do better. And they’ll expect every brand to get it right.
How should brands manage data?
Prioritize trust and value. In the last year or so, we’ve seen several high-profile cases of businesses mismanaging customer data, breaking customers’ trust and using their personal information to serve business interests rather than create valuable experiences.
When managing data, brands should make an effort to do the opposite. That means being transparent with customers, giving them control over their data, and using the information they’ve shared to engage with them in a personalized way.
Practically, building trust is fairly straightforward. Let customers decide what information they want to share, be clear about how you’ll use it and make sure it’s stored securely. Creating value, though, is a bit trickier. A lot of it comes down to your overall CX and loyalty strategy.
But tech enables strategy and choosing the right platform to manage your data plays a key role in delivering value. Use a central database that can store and analyse your data and initiate the right experiences, in real time, as a result. When customers see that you’re using their data to serve or engage them more effectively, it builds trust and loyalty.
What strategies should they adopt in relation to stricter data regulations?
The best thing brands can do is build trust with their customers. If you want to deliver personalized experiences, there’s no getting around the fact that you’ll need data beyond name and contact information. Customers know that, and they’re generally okay with it as long as the brand handles their data with integrity.
That means giving customers more control, being transparent and compliant in their security practices, and—importantly—using the data they have to actually deliver value to customers. And that’s where a lot of brands fall down. If you collect customers’ data but don’t use it well, it can end up irritating them. For example, they might wonder, “Why do I have to fill out my details when I know you have them on file?” It also makes them wonder what you’re actually using that data for. So, the best strategy is one that involves collecting relevant data, processing it securely, and then using it to give customers a more personalized experience.
Our interview with Marlon Bowser of HTK offers an excellent source of information for brands and vendors. We see that brands need to move away from points-based programs to experience-based programs to differentiate themselves and to reduce costs. In addition, they should implement or improve personalization efforts to develop emotional connections with customers. They also need to make sure that they handle customer data with the utmost care to build and maintain trust. Doing these things should put brands on a path to success.
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