While most brands already have an abundance of critical customer data on hand, most are not viewing or using it as a strategic asset to help create and maintain longer-lasting relationships with high-value customers, according to joint research from Loyalty 360 and marketing services firm Acxiom.
The study, entitled 'Making Every Interaction Count: How Customer Intelligence Drives Customer Loyalty', concluded that the explosion of new digital tools and technologies has fundamentally shifted power from brands to consumers, who have access to ever-growing volumes of information about products, prices, customer satisfaction, and availability. As a result, while it has been a big benefit for consumers, most brand-related metrics - including customer loyalty metrics - risk falling into decline and disuse.
"Brands and their loyalty initiatives are under assault," said Tim Suther, Acxiom's chief marketing officer. "Only 25% of people report being loyal to a brand. Knowing who these loyal customers are and how to best engage them is a business imperative to succeed in the age of the empowered consumer."
Additionally, the research examined the types of data that brands are collecting, where and how it's being collected, and the challenges marketers need to overcome to analyse all that data. Among the study's key findings:
- The majority (84.5%) of marketers said they use customer retention marketing strategies, yet less than half believe their strategies are working. Some 5.4% admitted that they do not evaluate their customer retention efforts at all.
- Less than half know who their best, most loyal customers are, and how best to reach them.
- 70% have less than 20% of their employees dedicated to customer retention.
- 60% dedicate less than 20% of their marketing budget to customer retention.
- 40.2% of companies access data individually through different lines of business, and slightly fewer (34.8%) report that their data is centrally located with universal access.
- More than half believe that attitude and behaviour analytical models help with customer engagement, and the most important outcomes of data insight are "understanding customer's attitudes and behaviour and "improving the customer experience".
"Many marketers equate customer loyalty with a points or rewards programme, but it is much more than that. Loyalty is - and should always be - connected to the behaviours and motivations of the key stakeholders of the brand," explained Mark Johnson, CEO for Loyalty 360. "It is important to realise that all insight and interactions between the brand and customers should be built around a proactive process of matching customers' expectations in terms of needs, wants and aspirations. Harvesting data and gleaning it for true intelligence is the secret sauce for driving this process."