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. This vast amount of real-time information can easily disrupt a brand’s path-to-purchase, which is forcing many brands to compete on price for short-term victories in lieu of long-term loyalty.

What too many businesses often misunderstand 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. article is copyright 2015

Loyalty Misunderstood

Chain credit: PixabayWhile 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 has largely been relegated 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. Often, the very nature of these ‘deal seeking’ consumers is to chase the lowest price, leaving the idea long-term loyalty to any brand in the dust for a better price.

Earning Loyalty with Experience

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 endeavor across in-store, online, mobile, direct mail and social interaction points, there are five fundamental focal points that brands must focus on to earn loyalty through experience:

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.

Key Point
: 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 behavior with a brand, good or bad, depending on the value of the experience. High predictable value will often lead to repetitive customer behavior becoming a habit, which leads to affinity and eventually trust.

Key Point: 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, direct mail and social channels that lack any personalization for the individual consumer. Thus a lack of interest and effort to understand the customer is conveyed by the brand.

Key Point: Apathy is a two-way street for brands; making the investment to understand the behaviors and motivations of customers through the wealth of fragmented cross-channel data a brand pays dividends.

4) Commitment

Brands displaying a commitment to customers and their consistent experience tend to receive commitments in-kind from customers in the form of return purchases, referrals and unsolicited evangelism.

Key Point: Focus on a top-to-bottom consistent 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.

Key Point: 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 this 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 ongoing activities inform brands exactly how they behave and are motivated through their “digital footprints.” This allows brands to align and personalize experiences 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 already a vast array of customer data from a variety of systems like your point-of-sale network, ecommerce platform, mobile application and social accounts.

The Critical Role 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. Centralization 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. Visualization of customers in the form of advanced personas and segments.
  4. Understanding cross-channel customer behaviors 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 centralize, synthesize and visualize this data in order to deeply understand customers based on their own behaviors. Brands are then able to engage customers with personalized, relevant communications across practically any digital or traditional channel that helps build trust through predictability and commitment that ultimately generates value for the customer.