By Martin R P Garnaud, Customer Experience and Engagement Strategist, Asia Pacific at Collinson
Customer loyalty is a tale of relevance, satisfaction and enduring relationships. In the post-pandemic landscape, businesses have a unique opportunity to capture the hearts and minds of customers, driving brand loyalty.
A common pitfall for marketers is using data to bombard customers with generic messaging, such as, “You bought this pair of trousers, now you need to buy this shirt”.
This mechanical approach is unlikely to succeed. Attracting long-term customer loyalty is a carefully balanced process that involves streamlining your data to achieve a single customer view and to better understand behaviours and preferences, before leveraging segmentation tactics to more easily identify and retain your most valuable customers; in turn enabling you to devote more attention to this group, encouraging feedback and discourse, and ultimately building a network effect.
This is key to building emotional loyalty, with two-way interaction, personalisation and combining a human touch with data and analytical rigour being key to achieving enduring customer relationships.
Loyalty best practice requires two-way interaction
The world has changed and so have relationships between choice-rich consumers and businesses. Brands can no longer take customer loyalty for granted.
Loyalty best practice now requires more than the rational, transactional programmes of the past. Brands have to work harder than ever to capture their customers’ emotional loyalty over the long term.
Too often, brands lack a strategy to facilitate two-way interaction.
Brands need to encourage customers to interact with them and with other customers. They need to build tactics within their loyalty programmes that create community.
A classic example of a data-driven business that does this well is Amazon, which continuously asks customers for feedback. The company might ask whether an item a customer received was the same as described by the seller, and whether they experienced prompt and courteous service.
This builds interactivity with the brand, which in turn makes the brand ‘sticky’, because it cares about what customers think and is working to improve its service through customer feedback. The company consistently asks how it can provide a better customer experience.
Authenticity, shared values and trust
Attracting long-term customer loyalty requires brands to understand and articulate their own and their customers’ authentic identity, values and objectives—and find common ground between the two sets of values.
The first step is to articulate the values that lie at the heart of the brand and consider whether the company lives by those values. How can it convey its values through marketing? What meaningful topics related to its core products and services can it address to communicate its values? How can it convey its authentic identity other than through transactional relationships?
The answers to these questions can help brands to establish an authentic loyalty proposition and engagement strategy that can protect them from competitors who attempt to lure customers with standard rewards programmes.
The loyalty proposition creates differentiation and is invaluable in terms of building long-term, meaningful, trusting relationships; which are the foundation of loyalty.
According to Alida’s 2021 Global Trends Report, consumers are aware of the brand values of businesses, with 86% of those surveyed saying they are more likely to spend with a brand that has values aligned with their own.
Customers maintain relationships with brands that are proven to be authentic, transparent, trustworthy and entertaining.
The role of data, analytics and AI in supporting a human touch
Ironically, you cannot build an enduring human connection with thousands of customers without understanding your data and accessing the raw intelligence and logic of customer relationship management (CRM) systems, advanced analytics, artificial intelligence (AI) and machine learning.
We are privileged to live in an era that enables us to combine the power of human emotional intelligence (particularly from subject matter experts and creators) with pure machine logic and intelligence to deliver relevant, compelling content to the right customers when it matters.
Brands need to listen carefully and capture individual customer preferences, in a CRM context. Then they can establish a marketing automation infrastructure that can deliver tailored content across multiple channels and in various formats aligned to those preferences.
According to Tealium, first-party data is where the customer experience should begin and end. With Google’s undertaking to phase out third-party cookies on Chrome browsers by 2022, the value of quality first-party data is exponentially increasing.
Brands need to leverage their first-party data to meaningfully segment their customer base, create personalised experiences and add value at all touchpoints. By interrogating this data, they can identify the customer segments most likely to profitably respond to personalised engagement.
All companies have a segment of low-value customers who are responsive to their brand messaging, and a segment of high-value customers who are mostly unresponsive. But there is also an overlapping segment of highly engaged high-value customers.
It is important to engage with these highly engaged high-value customers in a human way, to grow this segment as much as possible. This process can enable brands to iterate their messaging and interactions, to gradually strengthen their relationships with a loyal following of customers who not only buy products and services but also advocate on behalf of the brand to attract new customers.
The key message is to not simply rely on the mechanics of a CRM system, data or AI to develop and implement a loyalty proposition. Beyond data management, companies need to fine-tune their soft skills and engage with their customers personally—on a human level—to earn their everlasting loyalty.