The 'Uber 11' rules of effective customer retentionConsumers are much more aware now than ever before of brands' attempts at garnering customer loyalty, and they have come to expect something more than marketers were prepared to provide in the past, according to Sarah Cross, managing director for Uber.
The science of keeping customers not only satisfied but loyal is not too difficult for a business of even the smallest size, but marketers must get the fundamentals right if a loyalty strategy is to be effective.
This, of course, means obtaining up-to-date and accurate customer data and then using it intelligently to gain the kind of insights needed to build true customer loyalty. As a result, Uber has compiled its 'top eleven' list of customer data fundamentals, which are:
- Data: Don't just collect it. Use it. Don't be under any illusions about why you should have a loyalty programme. Loyalty it not (and arguably never should be) about simply keeping up with competitors, or about a quick sales fix, or even just because there's an expectation that you should offer a loyalty scheme.The ultimate goal of a loyalty programme is to gather high quality data that will help you get to know your customers better. But how much data should you ask for, and what comes first? The answers depend on the market sector, but there are some fundamental rules.
For example, the basics centre on the principle of give and take. Customers won't mind giving you their basic contact details if they know you're going to give them value, offers and rewards - as long they are confident about how you're going use their data.
It usually takes time to build up a complete customer profile, so you need to decide what's most important and ask for that data first. Over time, transactional data becomes vital and helps you understand what, when, and how are you customers are motivated to engage with your brand or purchase items from you. Use this data to improve the customer experience as well as to cross-sell wherever relevant and appropriate.
- Treat customers how you'd want to be treated Many brands don't think about their customers in a "how would I like to be treated" kind of way. Use data about individual customers to treat them as exactly that: individuals. Engagement levels will depend on the relevance and personalisation of communications, offers, rewards, and your overall value proposition. Consumers generally don't mind hearing from marketers if there's some personal value in the message.
- Be different - if you dare When the company executives say "we've got to have a loyalty scheme, so it'll have to be points-based", you may need to correct them quite firmly. Points programmes have their place but they are not necessarily right for every company and customer base. For example, points might not be right if you don't have a high transaction volume, or if the brand is highly innovative, different or exclusive (in which case your customers may well expect something different from you). For example, a non-points based 'brand club' concept such as that offered by Uber can provide a modern brand with a competitive edge.
- CRM doesn't only belong to the CRM team CRM is all about becoming a consumer centric business. Your most precious assets are your consumers, and looking after them and have a meaningful relationship will result in keeping them loyal for longer. The true role of CRM is always more than the contact strategy and database management, though. It's more about the degree to which you can align all departments with a common goal, creating the best possible brand experience in whatever form the consumer wants or chooses.
- Timing goes a long way Whatever is going on in each customer's life, you have to use your data to be in touch about it without delay - whether it's a birthday, Mother's day, Valentine's day, or even recent transactions.
- Be interested and get to know them This takes time and effort, not just technology. Learn from every customer interaction, and keep building on the data you have. The more personal the messages you send, the more engaged the customer should be. In order to keep it personally relevant you'll have to find out more. Most consumers realise that true personalisation comes with time and, if the relationship is truly give and take, they'll share information with you as long as you use it to enhance their experience. Always deliver what you promise, get your customer service team involved, and remember that CRM is not purely the responsibility of the CRM team.
- Make the most of your advocates In most cases the 80/20 rule applies, in which (theoretically at least) 20% of the customers will be active advocates, spreading the word about the brand and the loyalty programme, while the other 80% - satisfied as they may be - remain silent. Marketers must be able to recognise the 20% and make the most of them by rewarding them for their advocacy. For example, introduce a 'recommend a friend' campaign and reward both the advocate and the new customer accordingly. Your most loyal customers will be recommenders, and those that have been recommended will become loyal if you deliver on your promises.
- Try to create 'surprise and delight' Create an air of mystery, surprise, and delight for your loyalty programme to help keep it interesting. Don't always lay out all of the rules about earning rewards in advance. This allows you to tailor your programme as you go, giving a much more flexible approach. This also makes it more difficult for competitors to copy and out-reward you.While customers like to know what they must do to get a reward, it doesn't have to be purely about the rules. Look at your loyalty data and target some extra rewards to surprise and delight a target group of your choice (e.g. an inactive group that you want to engage again, or an active group that you want to encourage to spend more often, and so on). If you get the reward and timing right, they will be very impressed and, more importantly, they will probably never forget it.
- Measure, measure, measure Before you implement a loyalty programme, you will need to define what "success" means to your business, both in terms of marketing results and financial return on investment. When you plan your metrics, include soft and hard benefits, data achievements, brand experience, customer acquisition, member transactions, members versus non-members, and visit-based metrics.
- Stay relevant and show value quickly Although it takes time to learn what makes each customer happy, there must be initial rewards and benefits simply for signing up with the loyalty programme. Form partnerships with the right brands to allow you to do this in a cost effective way, and reward members as soon as possible to build an early sense of engagement and value.Making customers feel special does not have to cost a fortune, either. For example, it can often be achieved simply by making your communications exciting, immediate and - most importantly - relevant.
- Keep your staff involved Staff throughout the company must be involved with the loyalty programme - not only the staff that are customer facing. A two-tiered approach to the programme is likely to bring greater success. For example, if the programme is also rewarding your staff for their performance, they will understand the programme and how it works more clearly, and also talk about it more enthusiastically. This adds greatly to the 'viral buzz' surrounding the programme, and will ultimately lead to greater customer satisfaction and loyalty.