The Struggle to Deliver Effective CX to Drive Customer Loyalty

Customer experience is viewed as a significant piece of the overall customer loyalty puzzle. Loyalty marketers understand this point all too well.

The challenge, though, can be executing and delivering on this promise to customers.

Loyalty360 talked to Mateusz Skowronek, Senior Loyalty and Customer Experience Consultant at COMARCH, about this theme, among others, during a comprehensive interview. Skowronek specializes in assisting retailers and FMCG companies in digital transformations while creating and executing winning customer strategies and loyalty programs.

What is the biggest challenge that your clients face today in creating measurable experiences to drive customer loyalty? How do you recommend they measure efficacy?

Skowronek: What we see nowadays is that our clients have rather a good comprehension of what kind of experience will drive their customer's loyalty, but they struggle in delivering it. They are paralyzed with chunks of versatile data flowing in from many sources. The challenges they face are to continuously collect and analyze these complex data to create a consistent picture of the customer and to derive from it actionable insights at the more tactical level.

Broadly speaking, the efficacy of a loyalty scheme should be gauged not only by the satisfaction of the customer but also by the return on investment. And surprisingly, many companies tend to stress the first one and to underestimate the second.

What are the biggest opportunities and challenges for brands and marketers today? If you could recommend one thing to a client (or prospective client), what would it be?
Skowronek: The biggest challenge and, at the same time, the greatest opportunity today seems to stem from the multiplication of “touch points”, on the increasingly fragmented, omnichannel customer journey. On one hand, more interaction points promise more opportunities to drive customer loyalty. But these touch points have become increasingly tech-dependent and difficult to manage. Hence, there is a growing risk of inconsistency in customer experience. In the past, the customer could only interact with a brand through an in-store visit, likely preceded by a traditional media communication campaign (such as a newspaper ad).

Today, these contact points are numerous and brands struggle to manage them and control the quality of the experience customers get. Let’s take for example the scandal involving popular brand ads popping up on YouTube during extremist groups’ propaganda movies (link here). Brands have reportedly pulled their spend from ad services, but the damage has already been done. And the question is whether businesses could have done much in advance anyway, as there is an independent algorithm managing the distribution of the ads. The digital world is more complex than it seems, and grasping this complexity is a necessity. 

If I could recommend one thing to a client, I would stress the importance of having an excellent understanding of the intricate customer touchpoint landscape and assessing which elements need to be managed more closely, and with which technology, to ensure consistent customer experience.

How sophisticated are the customer experience and customer loyalty initiatives of most brands today? From the very nascent stages of considering a program to the ability to assess and integrate an array of complex new technologies that create consistent and seamlessly connected programs, where do brands exist along this spectrum?
Skowronek: I must stress, that to deliver outstanding customer experience and earn customer loyalty you do not always need to employ the most advanced technology. In some contexts, more traditional methods, if done well, can produce equally groundbreaking results. Consider an excellent loyalty campaign by U.S. retailer Trader Joe’s, hiding a toy inside the store and awarding kids who were able to find it.

Having said that, I would like to point to the fact that more and more brands are actually experimenting with the newest technologies such as proximity marketing, virtual reality or artificial intelligence to fuel their loyalty programs. And we see that some of our clients are already really good at this. But still, we see that most of the companies in, for example, the retail business, are way behind these digital disrupters, stranded in the phase of getting comfortable with the menaces of digital transformation.
We continue to hear about brands that are looking to create alignment between their customer loyalty efforts and the brand promise. Should all brands try to become the next “Apple” or “Amazon”? Or is it more realistic and/or beneficial for brands to understand their own unique brand identity, and then define objectives, processes, and programs that align with this?
Skowronek: Definitely. Trying to become the next “Apple” or “Amazon” would be doomed to fail. These are great brands of our times. But future customer loyalty champions will likely base their success on a different set of features. Understanding your brand’s unique identity and matching it with future customer expectations is crucial here. For example, many grocery chains are struggling to find a convincing value proposition for online shopping, trying to address the aspect of same-day delivery. But imagine if such a company were to combine fast delivery with self-driving cars, VR and proximity marketing. It would likely be the winner of the race for the loyalty of grocery customers.

There is so much focus on customer data and around creating actionable insight now. So how should brands be managing data in a way that is less complex, easier to understand, and has a greater impact?

Skowronek: Some even say “data is the new oil” (see The Economist article here). But having more data around your business means being able to collect and store it effectively, and what’s even more important, being capable of making sense of it. Otherwise, you will waste resources and lack insights. What we see right now is that our clients aim to streamline customer data arising from different sources (e.g. transactional, communication, social media content) and IT systems, and store all this information in one repository (e.g. data lake), often described as “single source of truth” (SSOT) about the customer, from where multiple data sets can be derived from various analytical uses at different levels of the company. This creates a more holistic, yet on-demand granular, view of the customer – something described by Leandro DalleMule and Thomas H. Davenport in a recent HBR article as “multiple versions of the truth” (MVOTs).

Can you define what the phrase “customer journey” means to you? What does it mean to brands? And how do you see it changing?

Skowronek: Since very early on, when products became abundant and traded around the world, there has been a purchase process in which buyers were engaged with product/brand/retailer/service provider. But its only now, in times of access to multiple channels and the vast scope of customer touchpoints comprising this purchase process, that the phrase “customer journey” has started making real sense.

Today, a prospective customer seeking and purchasing particular goods or services embark on a real journey that leads them to different research, communication, sales and after-sales channels, from beacons to AI, social networks to crowd-sourced support communities. For businesses, this means a need to understand this journey and find a way to make it more “enjoyable” for the customer, especially in moments of doubt and discomfort.

Can you define omnichannel/multichannel? What does that mean to you? What does it mean to most brands? How can a brand manage the opportunities it presents? How many brands understand these terms in relation to where they are / what they are doing / where the market is?

Skowronek: Omnichannel/multichannel is a reality we live in. Consider the fact that the time spent on the Internet via a mobile device has more than doubled in the last five years, and that US customers currently spend more time browsing and in-app on mobile devices than on the desktop computers/laptops. The same holds true for digital media versus TV. Brands need to learn how to compete in this reality, and how to build customer loyalty by leveraging different channels.
What is the single most important thing that you have done (or do) over a period of engagement (say a year) that helps clients increase customer loyalty?

Skowronek: We helped them understand that winning customer loyalty is not a one-time effort but rather continuous activity in which they need to reinvent their loyalty program constantly, especially in an era of dynamic technological changes. Many of our clients operated/operate more traditional loyalty programs, so we’ve helped them apply the newest technological solutions to bring their programs up to speed. This has helped them match customer expectations and allowed them to compete against digital newcomers.

What is the future of customer loyalty?

Skowronek: Difficult question. I would like to know the answer too. What can be said, though, is that in the short term the importance of technology in the interaction with customers will only grow. But at the same time, we can expect that the diversity of customer segments businesses need to serve will increase, from customers highly sensitive to price to value-seekers to digital natives, so we have to learn how to build customer loyalty programs that address the needs of these different segments. Something like operating many loyalty programs in one.

How does your technology address any of the previous questions? How could you see your platform evolving to address them, and what does your roadmap look like?

Skowronek: When it comes to loyalty, our technology platform offers a good mix of more traditional applications, such as point-based programs offering instant coupons, and the latest technological innovations, for example using beacons for proximity marketing campaigns to inform customers in real-time while in-store about the best offers suited to their unique preferences. And it’s up to our clients which from this broad spectrum of functionalities they would like to leverage. It means the platform can be good for traditional businesses as well as for those willing to experiment with the newest tech applications in the field of customer experience. Additionally, we have started offering end to end services related to loyalty, bringing in our accumulated expertise in the development, re-design, and management of loyalty programs. If our clients have such a need, we can take over the whole loyalty process, so more time is left for them to focus on core business activities.

In the future, we will see more platforms taking a holistic approach to customer relationship and experience management. From the creation of loyalty offers to marketing campaign management and communication planning and execution, from partner management and customer services to business intelligence. Such platforms can be used by clients as a control desk for customer-related activities, allowing customer data to be translated swiftly into insights and actions.

If you had a crystal ball, which aspect of loyalty management would you be most curious to try?
Skowronek: I’d like to know when we will see the first large-scale commercial application of artificial intelligence in the field of customer loyalty, and how it will look (e.g. AI-fueled personal store assistant for loyalty program members?)

Recent Content