Channel choice starts 'customer loyalty chain'

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By: Wise Marketer Staff |

Posted on September 28, 2009

While companies are faced with an increasing range of channels through which they can communicate, there is an increasing expectation among consumers that they should have the final say when it comes to which communication channels they use, according to Darren Ponsford, strategy and planning director for Blueview Group.

Consumers are showing an increasing tendency to shop around and switch brands, which presents problems for marketers who are trying to keep their existing customers.

With consumers experiencing more options than ever, it therefore essential that marketers establish lines of communication through multiple channels, especially if brands want to develop their own loyalty schemes, engage consumers through promotions, and gather customer data for better targeting and insights.

According to a survey of 2,000 consumers commissioned by Blueview, the issue of channel choice has become very important when deciding which brands, products and services to use.

But, Ponsford argues, offering consumers a choice of channels does more than provide a platform for companies to speak to their customers. In fact it often starts the whole 'customer loyalty chain', helping companies to gain new customers' business in the first place and then helping to ensure their ongoing loyalty.

The survey found that, if a company does not offer a choice of communication channels, potential buyers are much less likely to purchase its products. More worryingly, though, existing customers were found to be much more likely to switch to a competitor.

When considering purchasing from companies they had never bought from before, 66% of consumers said they would be extremely unlikely to buy from a company that did not offer them their preferred channel of communication. At the same time, 61% said that, if a brand they currently used did not offer them choice of channels, they would look for a competitor that did.

"At the most basic level, marketers need to make multiple communications options available and find out what those favoured channels are across their whole customer base, whether through mail, email, web, phone or face-to-face," explained Ponsford.

If customers and prospects are to be offered the kind of channel choice they now expect then each channel also needs to deliver a worthwhile return on investment (ROI). Specifically, the messages, promotions, offers, events and incentives delivered through those channels must be targeted, tailored and absolutely relevant to the recipient. For example, this may involve anything from a customer birthday greeting with an offer to a live event that the consumer may be interested in, or even a personalised web URL that leads to a targeted message or a specific promotion. And every communication should include an opportunity for the company to capture additional data and further refine its targeting and relevance to the consumer.

According to Ponsford, this kind of multi-channel, targeted communication must be data-driven. Tracking which content drives the customer toward a purchase and which doesn't engage them can provide valuable long-term insight into their likes and dislikes, as well as other factors such as response times and the redemption of offers.

"The time has passed when brands could largely favour a single communication channel for dialogue with their customers," concluded Ponsford. "Smart marketers are now concentrating on achieving the optimal channel balance for their customer base. Capturing customer and prospect communication preferences is therefore a fundamental first step, as is the intelligent analysis of that data."

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