There is a significant divide between what marketers should be doing and what they are doing to build customer loyalty, Kathy Hecht, vice president of marketing for Acxiom told the audience during the keynote session of the Loyalty 360 Engagement and Experience Expo Monday.
Brands don’t offer loyalty; consumers grant it, Hecht said, stressing that organizations need to meet customers’ needs and expectations. Marketers have growing amounts of data to meet those expectations, both from internal sources and external sources.
Despite all of this data, many marketers can’t get at the relevant data or don’t get all of the value out of it, according to Hecht. Ninety-four percent of marketers don’t use influencer score as part of their segmentation and measurement. Eighty-nine percent of marketers don’t use net promoter scores as part of their segmentation and measurement.
These measurements are critical because some customers are much more influential than others – they have large social media circles and have influence within this circle. For example, a business traveler will have more influence with more travelers than might a college student – even if the college student has a large social circle.
Yet 63% of marketers always or frequently treat new customers the same when choosing advertising media, even though these customers have very different backgrounds, habits and preferences, Hecht said. She advised marketers to build customer relationships based on offer relevance, knowledge and trust.
Another element of the loyalty divide is that brand promise and marketing messages aren’t in synch, Hecht added. Forty percent of marketers always/frequently use pricing discounts for promotions, but only 7 percent of marketers have “everyday low prices” as part of their core brand message.
Companies need to have multidimensional insight into customer habits, Hecht said. No one signal consistently describes or predicts consumer behavior, so it’s best to have as many data elements as possible, then refine that information down to all of the relevant signals. A simple “like” on a Facebook page, with no other related activity, can be an irrelevant signal.
The next step in bridging the loyalty divide is to further refine insights to recognize a company’s best customers, then to increase the budget for cultivating those relationships. Those insights can also be used to identify and market to those prospects who think, look and act like a company’s best customers.
Hecht urged marketers to use third party resources in addition to internal data in order to optimize all media in communicating with customers.
But marketers have to be careful about being too aggressive in obtaining customer information, Hecht cautioned. “Just because you can do something doesn’t mean you should. Customers want to know how you’re using their information.”
Customers may not be willing to provide too much information at a specific time, but may be willing to divulge more over time, according to Hecht, so marketers should look at building long-term trust rather than short-term reward.
As a final way to close the loyalty divide, Hecht recommended delighting customers, which promises high returns, including:
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Marketing ROI, 15-30%
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Customer profitability 10-15%
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Pricing power, 5-7%
Some companies have indeed delighted customers, but have yet to leverage that in order to enhance customer profitability or to take advantage of the additional pricing power.