The Five Focal Points of Genuine Customer Loyalty

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By: Wise Marketer Staff |

Posted on March 26, 2015

As consumers become increasingly savvy and educated with 'always on' access to price comparisons and product reviews, genuine customer loyalty is becoming a fleeting advantage for many brands, according to Mark Harrington, VP of Marketing for Clutch, who here examines how a wealth of real-time information can easily disrupt a brand's path-to-purchase, and how this is forcing many brands to compete on price alone.

What brands often ignore is that customer loyalty is deeply rooted in the overall experience with a brand. While pricing can be an important component to many consumers, there are large segments motivated by the experience a brand delivers.

Misunderstanding Loyalty?
While many brands are adamant in their refusal to be viewed as discount providers, the irony is that they are often conditioning this very designation with consumers through a continual barrage of sales, coupons, specials and discounts. The term loyalty itself is seen by many as a simple short-term transactional reward. Rather it should be a long-term focus on producing predictable valuable experiences that generate trust and eventually earn loyalty.

An unintended result of attracting the short-term attention of consumers with special sales and discounts is that you're not only eroding (unnecessarily in many cases) margin, but also attracting "coupon consumers" who are largely motivated by discounted offers and often do not align with the brand's ideal target market.

Five Focal Points of Loyalty
Today, this misunderstanding of loyalty has drawn brands away from the foundation that builds trust, earns loyalty, and even drives evangelism with consumers.

Although the customer experience with any brand is a complex endeavour across in-store, online, mobile and social interaction points, there are five fundamental focal points that brands must focus on to earn loyalty:

  1. Value
    Typically defined as perceived benefits divided by cost, value is a primary driver of a customer's commitment to a brand. However, reducing the cost with continual discounts can also diminish the perceived worth of a product or service, thus reducing its value in the eyes of the customer. The key is driving toward stronger benefits to raise the value rather than merely discounting costs. Demand Driver: Focus on increasing the experience benefits over decreasing the costs to increase overall value.
     
  2. Predictability
    A consumer's ability to receive a consistent experience in a predictable and reliable manner will often drive behaviour with a brand, good or bad, depending on the value of the experience. High predictable value will often lead to repetitive customer behaviour becoming a habit. Demand Driver: Quality consistency is king; focusing on the reliability of the entire customer experience will drive repeat visits.
     
  3. Relevance
    This is largely tied to the engagements a brand has with individual consumers. Many brands deliver 'one size fits all' campaigns across email, onsite, in-store, mobile and social that lack personalisation for the individual consumer. Thus a lack of interest and effort to understand the customer is conveyed by the brand. Demand Driver: Apathy is a two-way street for brands; making the investment to understand the behaviours and motivations of customers will pay dividends.
     
  4. Commitment
    Brands displaying a commitment to customers and their consistent experience tend to receive commitments from customers in the form of return purchases. Demand Driver: Focus on a top-to-bottom commitment to customer experience at every point of interaction, both digital and in-person.
     
  5. Trust
    Each of these focal points serves as a building block for trust with the consumer, which once achieved, consistently clears a path for the brand to earn genuine loyalty from the consumer. Demand Driver: Driving toward a commitment of predicted and relevant value will breed consumer trust and ultimately evolve into loyalty and even evangelism.

A Starting Point
While that all sounds great, where does a brand actually start? The good news is that, although "always on" consumers are challenging to earn loyalty from, their digital activities inform brands exactly how they behave and are motivated. This allows brands to align and personalise their experience for them.

The first step for a brand to move toward earning genuine customer loyalty is to "listen" to what their customers are "saying" with an eye on understanding them to drive strategy. Your brand more than likely has access to a vast array of customer data from a variety of systems like your point-of-sale network, ecommerce platform, mobile application and social accounts.

Unlocking the Value of Data
The issue for most brands is that this data is typically fractured and fragmented limiting its utility. Unlocking the value of this data requires:

  1. Centralisation of each independent data source into a single, central data hub.
     
  2. Synthesis of the cross-channel data to provide a holistic customer view.
     
  3. Visualisation of customers in the form of advanced personas and segments.
     
  4. Understanding cross-channel customer behaviours and motivations.
     
  5. Incorporation of this insight into your brand's overall experience strategy.

"Many brands are achieving this with advanced Consumer Management technology, which integrates established data sources to centralise, synthesize and visualise this data in order to deeply understand customers. Brands are then able to engage customers with personalised, relevant communications that build trust with their predictability and commitment to generate value for the customer," concluded Harrington. "Ultimately, this is designed with the goal of building loyalty and driving evangelism for the brand."

More Info: 

http://www.clutch.com