Is Customer Loyalty in the U.S. at a Tipping Point?

Given the number of companies entering the marketplace and competing for consumer attention skyrocketing, capturing consumer loyalty is not an option, it is crucial to the survival of brands.

On Jan. 17, 2017, at 1 p.m. EST, Loyalty360 will host a webinar titled, “The State of Loyalty in 2017 – An Exclusive Webinar with Snipp and Loyalty360,” presented by Snipp.

Christian Hausammann, global director of loyalty, Snipp; and Carlos Dunlap-Beard, vice president, loyalty solutions & business development at Snipp, will be the featured speakers.

Loyalty360 caught up with Carlos Dunlap-Beard, vice president, loyalty solutions & business development at Snipp, to learn more about this compelling webinar topic.

What things should brands consider when deciding how to spend their customer loyalty budgets in 2017?

Dunlap-Beard: The top three things a brand might want to account for varies based on the maturity of their strategy. For instance, if they have an existing program in the market, they should consider:

1.  Have I successfully measured program results in 2016 and do I know where to reallocate my budget to maximize results in 2017?
2.   What new elements can I introduce into the program in 2017 to make it more dynamic and appealing, and what is my anticipated ROI on any required investment?
3.  Investing in ways to drive engagement and increase brand equity before, during and after purchases (elevate promotions and dialogue within your social channels, solicit product reviews, events, encourage online communities around your brand, inspire user generated content, etc.)

If they are considering new programs for 2017, they should consider:

1.   Is there organizational commitment to a customer loyalty and engagement strategy and do all departments understand their role in delivering on the program experience?
2.   Have we properly considered all program elements and incorporated everything into a minimum 3-year financial projection that shows a profit no later than Q2 of the second year?
3.  Being OK with launching a program that’s not 100% of what you’ve envisioned. An 80% solution in 2017 that you can enhance each quarter, is better than a 95% solution in 2018.

What is being done well in this area and where are loyalty marketers still challenged?

Dunlap-Beard: Best-in-class programs continue to evolve – even at the risk of ridicule by both consumers and loyalty industry experts. See Starbucks. They made the move they knew they should because recognizing and rewarding their customers on value was more important than maintaining the status quo, because they were concerned about potential backlash. It looks like things have worked out well for them.

The biggest area where most programs come up short is an overall lack of “relevant” communications. Monthly statements and quarterly newsletters just won’t cut it these days. I’m certainly not recommending daily emails with the latest special or to announce yet another 40% off sale. However, the true beauty of a loyalty program is in its ability to inspire previously unknown customers to raise their hands, provide you with information about them and their spending habits, plus give you the permission to communicate with them in their preferred channel (email, text, etc.). Yet most program sponsors communicate as if they’re afraid to talk to customers, send the same generic communications to all members and don’t vary the message/channel/offer based on previous customer spending, lifestyle, geography, engagement history, etc. A lot of good programs die due to poor execution and lack of communications.

What trends do you foresee for customer loyalty in 2017?

Dunlap-Beard: Hey! Are you trying to get me to spill the beans prematurely? Well, I won’t give it all away, but the biggest areas of opportunity in 2017 are around technology innovations, lifestyle connections, and yet again, data analytics and insights.

How do you describe “Lifestyle Loyalty” and what makes it important to brands?

Dunlap-Beard: Consumers continue to be the catalyst and reason for innovation. Active consumers don’t just sit in front of their computers or make a blind trip to the store in hopes of finding their desired items. Brands must now find a way to be where the consumers are, engage with them without pushing their products, support their hobbies, interests, and endeavors even when it has nothing to do with their brand.

A brand that supports my passions for CrossFit, golf, travel and the American Diabetes Association will get more consideration from me when I eventually decide to make a purchase more than a brand that continues to push their products and services on me when I’m not in the market to buy. That support can come by way of allowing me to link my fitness tracker, upload vacation pictures or offer me rewards that support any of my passions. That’s the switch that consumers are demanding and technology is enabling. Is it scary for brands? I’m sure it is because it requires a shift in thinking – from product focused to customer centric. But this is not a shift that a lone brand manager can make. It has to be championed from the top.

Why do customers remain loyal to brands today?

Dunlap-Beard: Connectivity. The experience and excitement they get from being associated with a brand. I love my iPhone, my status on Southwest and rolling in my GMC Yukon. I feel connected to all of those brands. However, many other brands I can take or leave, yet I will usually continue to support them due to convenience…until something better comes along. Brands should be careful as not to confuse convenience, lack of choices and apathy with loyalty. The best and most loyalty-inspiring brands make customers feel special and a part of an exclusive community, and dare I say it would most likely be just as successful without a loyalty program. Apple, Harley-Davidson, and Starbucks are examples of the types of brands that people want to be associated with.

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