Earning customer loyalty is mission-critical but also harder than ever, according to an afternoon session Wednesday at the DMA’s Integrated Marketing Week event, in New York City. Forrester Research analyst Tina Moffett said the problem with brand loyalty programs is they are purely transactional.
The DMA and Forrester conducted a survey asking marketers whether they were satisfied with their loyalty programs; a whopping 58% said they were not. According to Moffett, that is probably because the majority of them are still in an “earn and burn mentality.”
“Even though loyalty marketers are dissatisfied, loyalty as a strategy is still a strategic imperative because the only differentiator for brands is knowing their customers,” he said. “Having a loyalty strategy lets you emotionally connect and know more about your customers.”
Data, Moffett said, is hugely important to a loyalty strategy. Buying behavior, what people are responding to, what they are saying about a brand, and whether they advocate are all important factors that should be considered when shaping a loyalty strategy.
Easier said than done: The Forrester/DMA survey found that 52% of marketers find it hard to understand customers across touch points.
“Marketers say that’s a top challenge,” Moffett said. “It’s hard to understand behaviors and how people interact with brands across devices and sales channels. It’s hard to map that out.”
In addition, 36% of marketers said a big challenge is aligning loyalty with their companies’ overarching business strategies, while 29% pointed to personalizing offers, content, and experiences based on behavior.
Regardless, Moffett told IMWeek attendees, marketers must get their loyalty strategies right because the insights gleaned from successful implementations infiltrate into product development, customer experience groups, and customer service.
According to Moffett, success starts with data and intelligence. Marketers must understand what makes customers loyal, what their expectations are, what motivates them, and makes them feel valued.
“These types of loyalty insights can help inform customer-facing strategy improvements, such as cross-sell opportunities,” Moffett said. “Marketers can use what they know about loyalists to change the experience [and] understand what people respond to. What are we learning about them? Having this data to shape the strategy will move you from transactional loyalty to a loyalty strategy that provides experiences. Loyalty is the informant, and it informs every single phase of the customer life cycle.”
Moffett provided the following advice to brands:
- Use your loyalty strategy to help customers discover new products.
- Streamline discovery through targeting.
- Relevant information will foster exploration.
- Shape a consistent and relevant cross-touch point experience.
- Personalize and deliver relevant product content.
- Make buying easy and more frequent.
- Deliver contextual offers.
- Refine the purchase process experience.
- Anticipate and be there for questions after the customer has made a purchase.
- Implement an enterprise-level loyalty metric
- Draw inspiration from companies with cult loyalty.