Customer loyalty trends for 2006: what comes next

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By: Wise Marketer Staff |

Posted on November 10, 2005

Customer loyalty trends for 2006: what comes next

The average global citizen is in their fourth job and their commercial allegiances are refusing to settle in just one place, with many customers becoming brand-loyal, but not to only one brand. Eugene Lee of SurfGold explains four coming trends that loyalty marketers can put to work in 2006.

Alwyn Toffler said in his book Future Shock: "The future is going to hit us with an increasing number of changes at an increasingly rapid pace." That was some twenty years ago, and we're now in the midst of that future. So how can any brand build loyalty in a society where fundamental principles and ideals are swaying against the concepts of longevity and loyalty?

Today, consumers are going through life in a kaleidoscope of changes, in personal, social and business terms. Fewer families are spending quality time together as each family member pursues their own interests. Relationships have become shorter, more fragmented and often tenuous. Today's youngsters go through more pre-marital affairs, more marriages and divorces and more single parenting than any other generation on record. Being constantly on the move due to career pressures, they can't build up any lasting relationships.

Reasonable target So the question is this: are we "shooting for the moon" when we try to build loyalty for a brand in a world where relationships between people can't even succeed? Thankfully, the answer doesn't have to be "yes".

But perhaps we marketers should be aware that the battle for loyalty is definitely getting harder by the day. Today's generation looks at relationships in general - and loyalty in particular - in a totally different light from what we have been used to decades past. Unless we recalibrate our definitions of loyalty and relationships with the current state of affairs, our efforts at building and measuring loyalty are bound to fail.

Four key trends So what changes can we expect in the way consumers deal with and display their loyalties, and how should loyalty marketers deal with them? SurfGold offers the following trends and advice:

  1. Customers will exhibit multiple loyalties In any category, customers will be flirting with more than one brand. And the trick for the loyalty marketer will be to be in the 'loyalty basket' than to aim for 'total loyalty'.  
  2. Loyalty will be short-lived Gone are the days when you could assume that a customer will be with you for their entire lifetime. And when we calculate customer lifetime value (CLV or LTV), we must now calculate it based on increasingly shorter tenures, as customers will continue to sail in and sail out of brand relationships with ease.  
  3. Customer relationships become less transparent Because their most confidential information is available to any one at the click of a button, customers will start to demand - and get - greater control over their personal information. But until this happens in a widespread way, they will start 'masking' their information with inaccurate and incomplete data - something every customer database manager fights with continually. If left unchecked and uncleaned, this will have serious implications for future data-based marketing efforts.  
  4. Brand acquaintance more important than loyalty In a world where allegiance to your spouse is measured in decreasing life cycles, you can't necessarily expect loyalty to a brand to last any longer. This may be true, but loyalty will survive and possibly even rejuvenate itself in a significant portion of the population. To ensure that these short cycle relationships stay steady and don't decay or die out even more rapidly, marketers will need to use every ounce of inventiveness at their disposal.

Conclusion Loyalty marketing won't die out. On the contrary, it will become far more exciting and challenging, and the market place of tomorrow will separate the customer loyalty wheat from the chaff. And it will largely come down to a better understanding of consumer behaviour patterns than the competition has.

Eugene Lee is the CEO for Asian loyalty marketing consultancy SurfGold, which has offices in seven countries (Singapore, India, Taiwan, Korea, Indonesia, China, and Hong Kong). The company specialises in customer loyalty solutions, partner relationship management, and data analytics.

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