What is customer loyalty? How would you define it?
This one question sparked heated debate, both in the boardroom and in the bar. The most fundamental point of contention is whether customer ‘retention’ is truly achievable, or whether brands / retailers should refocus on engagement and experience as a path to building valuable customer relationships.
The future of customer retention is upon us and as we emerge from nearly 18 months of atypical lifestyles, it becomes more and more clear with each passing day that people are embracing new buying habits and refine their preference for specific communication channels and payment methods.
People are also increasingly thinking about the retailers they frequent, carefully measuring brand values ââto align with their personal values. This review process is fueled by a subjective element where consumers listen to the news, scroll through Twitter and Reddit, and chat with their friends to address the latest post or supported cause that might change their perception of a favorite brand.
The debate over whether loyalty is an achievable goal over a sustainable period of time is not surprising in a world that generates news at a breakneck pace and where consumer behavior is mercurial to the point of almost being unpredictable. The customer retention debate has gone beyond mere curiosity in its importance and has important implications for the future of your business.
Now is the time to redefine what loyalty means to your organization
The experts in consumer engagement and retention at Exchange Solutions know very well how the concept of consumer retention and value exchange can be misinterpreted across an organization. Mike Hughes, CEO of Exchange Solutions, explains why this concept motivates their corporate mission.
âThe concept of optimizing the exchange of value within a loyalty framework, formal or informal, is essential to successfully achieve the goals of consumer engagement and financial growth for your organization. Creating an optimized exchange of value requires understanding the current behaviors and interests of an individual consumer, identifying additional actions that they could take, and presenting an economically sound and attractive incentive that offers benefits. value to the consumer while ensuring an incremental and profitable transaction for the retailer. This is how we create win-win experiences for consumers and retailers â
All the talk about becoming customer centric has led to the point where customer retention is no longer an option, but a skill necessary for the survival of the business. It’s time to see your customers as your most important asset and take a clear view of how you plan to build trusting relationships with them for the long haul. The mantra “build it and they will come” is more easily applicable to loyalty marketing than to baseball.
The value exchange described by Mike Hughes means that when you take the right approach for your brand, customers will be delighted. In turn, they will reward you with additional visits and sales, while investors and shareholders will reward you with increased market value. You could even increase your annual incentive pay in the process, so everyone wins if you successfully redefine loyalty in your business.
How do you get started on the path to creating your own vision for customer retention in the future? You can start by checking whether your business is focusing on the big or the small “L” of loyalty.
If you focus on the little L of loyalty, you may have a loyalty program but find it continually challenged by senior management.
- You focus on the program and the programs offered by your competition. What value do they give in their currency of points or miles? What types of rewards do they offer? What other rules of the program must be equal or exceeded?
- You would like to spend time investing in continuous improvement, removing the friction elements in the shopping experience, and eliminating the pesky details of your program that limit value to members, but you spend most of your time. time to defend the program to the boss.
If you’re focusing on the Big L of loyalty, you’ve probably got the C-Suite deal where customers come first.
- You continually refine your strategy to become truly customer-centric and highlight it in your investor briefings or owner meetings, sharing metrics indicating progress towards the goal
- You may or may not have a formal loyalty program, but you collect a data-driven understanding of your customers’ behaviors and work to collect even more information about their lifestyle, stage of life and personal values ââin order to to serve them better.
Forward-looking marketers know that expanding the ranks of truly loyal customers is the golden ticket to profitability and higher capital valuations.
By focusing on the Big L of customer retention, your strategy is executed with great execution and generates additional visits, revenue and profits. You connect more effectively with senior executives when you provide access to performance measurement, which means you never have to respond “I’m not sure” in response to the CFO or CEO who asks you what. is the performance of your investment in customer retention.
Understanding the nuances of this debate is essential for your brand to succeed in becoming more customer-centric. If you focus on your loyalty program, chances are you’ll never move the needle much to increase the number of customers who give you the ongoing benefit of the doubt. People don’t care as much that you have a program, they care about how that program strengthens your brand promise and delivers extraordinary value. They want this program to speak to the hoped-for truth that your brand wants customer loyalty first and foremost.
The big L of customer loyalty is a supreme goal. Top-level marketers realize that the absolute conquest of customer allegiance does not define success. Building trust, strengthening brand affinity, and increasing value is achievable and may be the most accretive aspect of customer loyalty to the business. Good execution with the exchange of value in mind, as Mike Hughes has described it, is the result of a Big L-focused organization.
Whether or not you have an explicitly defined loyalty program, you can earn by focusing on Big L. Your go-to-market strategy can be based on engagement-focused campaigns and a formal program is not always necessary. to achieve your goals. You may or may not choose to include a promotional currency (points or miles), but you should link the execution of your loyalty strategy to in-store and online operations to ensure that loyalty is part of the customer experience and to communicate the brand’s authenticity to customers at every point of interaction.