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Is customer loyalty broadly misunderstood?
Have brands lost the customer in their quest for customer loyalty?
Those topics and more will be tackled during a compelling webinar, “The Misalignment of Loyalty,” on Tuesday, May 23, 2017, at 1 p.m. EDT. Loyalty360 will host the webinar, which will be presented by Clutch.
Jenna Flateman Posner, senior vice president, strategy, Clutch, will be the featured speaker during the webinar and she participated in a Q&A with Loyalty360.
Can you talk about what you mean by the “misalignment” of loyalty?
Flateman Posner: Often times, brands get caught aligning with a single published loyalty program. Because their goals have always been so acquisition focused, most brands see enrollment as the key success metric. Sadly, brands are treating each customer who enrolls in the program the same way, the expectation is that maintaining a loyalty program is easy ... customer enrolls and the program takes care of the rest ... wrong. Customers have preferences and needs that must be considered. The concept of one loyalty program to rule them all ultimately hurts the brand, rewards behavior that would have likely already taken place and ultimately becomes a cost center.
Why do you think loyalty is broadly misunderstood today?
Flateman Posner: Loyalty is misunderstood because 1. It means something different to everyone ... 2. It’s not usually seen for its real value, which is actually a data capture strategy 3. Most programs don’t account for the unique needs and preferences of the brand’s independent value segments. Data points like SKU, communication preference, demographic information, and so much more need to be leveraged to inform communication and campaigning in a sophisticated customer retention strategy.
What are brands not doing well in their quest for customer loyalty and, ultimately, brand advocacy?
Flateman Posner: Let’s assume that brands are figuring this out. Let’s assume they are putting technology in place that can better help them leverage their data and put a myriad of programs in market segmented and tailored to their customers’ real-time behavior ... what’s next?
A huge problem with most loyalty programs is that brands have to wait six months to a year to have enough actionable transactional data to retarget and remarket to their customers. But what if there was a faster way to qualify customer value from Day 1?
That’s how Clutch uses third-party data append. By appending third-party data to include household income, location, social affinities, cognitive insights, and even political affiliation, brands can start understanding early the innate qualities that make their customers who they are. With retroactive analysis, brands can create an ideal customer persona with all of these unique attributes.
Align that with historic response rates and from Day 1 and you can model and rank newly enrolled customers based on their potential. This is how brands can start accurately predicting value and point their retention dollars at customers more likely to become valuable.
What are brands doing well in their pursuit of customer loyalty?
Flateman Posner: As retail grew over time, we started selling in-store ... and brands’ sole focus was driving new foot traffic, then we started selling things online ... and we leveraged display and search to acquire new customers and now mobile and now social and efforts to grow business to date have been focused on building channels, getting new foot traffic and new visitors ... building something from nothing ... it’s no wonder brands have focused their retail innovation on acquisition.
Finally, we’ve seen a shift. Finally prioritization. Now more than ever, we’ve seen a commitment from brands to really figure this whole ‘loyalty’ thing out. They’ve allocated budgets and created roles solely focused on bringing the same level of competency and sophistication to retention as brands have fine-tuned with acquisition. This is a massive shift.
What is your advice for brands that want to take the right path to attain true and sustainable customer loyalty?
First, Identify: Focus on leveraging loyalty as a data capture strategy. See loyalty as a unique identifier necessary to aggregate cross-channel customer engagement, transactional and behavioral data. Engage a CRM that can capture this and make it actionable. Most CRM systems are built to manage a B2B sales funnel not a B2C relationship so this may be harder to find than you think.
Second, Understand: Make sure you have the tools in place to pull insights out of this newly aggregated data. Leverage this new understanding to accurately define what value actually means to you as a brand. No more fictitious or aspirational personas to drive goals. Use the cold hard data to tell you exactly what a VIP customer looks like all the way down to Day 1 of the customer journey.
And lastly, motivate: Now that you know who they are ... leverage this new found understanding to put context around your marketing efforts ... push and pull cross-channel data to inform communication in the method most likely to convert them. Points punches and rewards are all tactics in a much broader consumer management strategy. It’s the personalization and relevance that’s going to drive genuine loyalty, the ability to make every unique segment feel like they have a 1:1 connection with the brand. Without putting data first, this is impossible.
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