How do you solve a problem like…eroding customer loyalty?
Each week, we ask the agency’s experts for their thoughts on the real issues facing marketing practitioners today. This week we ask readers how they plan to serve potentially disloyal customers.
Customers are more fickle than ever when it comes to mainstream brands. The web has made it easier than ever to switch suppliers or brands, and even easier to publicize poor service – think of last week’s uproar when energy supplier E.On sent socks to its customers to help them deal with Britain’s spiraling energy crisis.
However, although consumers generally dislike constant communication with companies, keeping quiet so as not to upset customers with too frequent updates is not a viable strategy. So how do you achieve this balance consistently?
How can marketers harness customer loyalty for the good of their brands, without relying too heavily on those same customers?
How do you solve a problem like…eroding customer loyalty?
David Edwards, Chief Account Officer, AMV BBDO
Most national brands have a treasure trove in their databases to understand how their customers feel and what they think. As loyalty – if any – becomes increasingly fragile, organizations should do more to really step into the shoes of their existing customer base. If E.On had sought the wisdom of his clients before going public, they would undoubtedly have been told, in no uncertain terms, to put a sock in it.
As for the question of acceptable frequency of customer engagement, if you listen to your customers, they will quickly tell you if you are right or not. There’s obviously no hard and fast rule, but if your experience is good enough, you can interact with them every day – as Mr Wardle will attest.
Hugh Fletcher, Global Marketing Director and Thought Leader, Wunderman Thompson Commerce
As early as 2018, our research showed that consumers were more loyal to service than to brand. Yet the one thing most consumers would change about shopping online was faster delivery followed by free returns. It’s no surprise that businesses that ticked those boxes thrived during the shutdowns, like Amazon and aggregators that delivered food to your door despite restaurant closures.
The focus needs to shift from brand and product equity to one that focuses on fantastic service. This will only grow in importance in the future, with 4% of global consumers expecting products to be delivered within two hours, 30% expecting delivery within 24 hours and 20% expecting delivery within 6 16-year-olds don’t even consider brands that can’t deliver in a day. Simply put, without service, there is no loyalty.
Victoria Herrick, Strategic Partner, Strat House
Loyalty has never been just about initiating communications. It’s about taking meticulous care at every touch point. For banks, the main driver of loyalty is probably the experience offered by their applications. Nothing says “we care about our customers” more than a silky-smooth user experience (UX).
Last night in bed I fell in love with Tesco all over again. Appalled that the price of the hotel room I had wanted to book had gone up by 150% in less than 24 hours, I turned to my Tesco Clubcard app. I converted points into a hotel discount, switched from the app to a hotel booking site, and got my dream room for a fraction of the price. All without leaving my bed. In less than five minutes. On a broken iPhone 6. Do I feel faithful? Yes.
Clare Lawson, General Manager, Ogilvy Experience
The drivers of loyalty have changed. It’s not just about points, prizes, and mechanisms to lock a customer into a long-term relationship. These are value-added experiences that better serve them and meet their needs, sometimes meeting needs they didn’t even know they had. Gen Z, for example, cares only about the experience, with 70% saying that alone will boost their loyalty and more than 80% willing to pay for richer experiences that add value. This illustrates that meeting the needs of your consumers before they even know what they are is essential to retaining them. Consider two-hour delivery, locker pickup, and reviewing ratings before purchase — customers didn’t need them, but these experiences and services build loyalty twice as fast as traditional approaches.
Maggie Malek, President and CEO, MMI
Loyalty becomes harder to maintain when consumers are presented with new, engaging options every hour. The technology that helps us cultivate our defenders is becoming more widely available. But it is this data, combined with human knowledge, that can fuel the passion of loyalists.
Technology tells us when loyalty is under threat and directs communications to connect with ever-changing consumer needs and tastes. Focus on relevance, authenticity and transparency to keep key customers engaged. Create personalized experiences truly unique to your brand that drive lifetime loyalty. And use the data to continuously identify emerging audiences that reflect the motivations of your fervent base future-proofing by establishing the “next generation” of ambassadors.
Jo Penn, Managing Director, Armadillo
Not so long ago, the classic loyalty program seemed to be in decline. If it didn’t scale, it risked eroding the value of a brand’s best customers without driving additional behaviors or improved affinity. But the landscape is changing rapidly. A great loyalty proposition must now be part of a brand’s contract with its customers: digitalization means that we can create personalized rewards and experiences for customers at all points of the value pyramid, and thus guarantee their will to share their data. And it’s this rich first-party data that companies must prioritize if they want to win.
Niaz Rizwani, Chief Strategy Officer, Tribal Health
A loyal customer is a satisfied customer. Customers don’t expect a deluge of emails offering advice – they expect that when issues arise, they will be resolved in a timely and courteous manner. All customer services and terms should be simple and user-friendly, to achieve quick resolution. You really need to know your customers and their preferences to do this.
Don’t be afraid to apologize if things go wrong. Ovo’s Stephen Fitzpatrick was quick to apologize after their terrible customer advice. And we all know not apologizing can get you in trouble – just ask Boris Johnson.
Rich Edwards, Planning Manager, O2, M&C Saatchi
I recently got a dog. He expects me to do certain things for him, and I do it, reliably, without fuss. Not fun stuff, but important fundamentals. I also provide opportunities for fun, which create memorable heights in our experience together and allow us to show our appreciation for each other. It’s those good things that other people see and we tell people about. Overall, we both get stuff out of it. Brilliantly reliable fundamentals and memorable moments. Which means we’ll be together for life. This is true loyalty. As a famous telco once said, “Be more of a dog.”
Nic Climer, Executive Creative Director, RAPP Dallas
I’m hypersensitive to how brands often try and fail to deepen my loyalty to them. Those who beat me with just offers and offers are the first to be put off. But those who send me unique, targeted, highly personalized content – I open and read just about every time. For me, that’s the key – having a real conversation with your client. No different from building a friendship. You have to stay in touch, and there are ups and downs in these recordings. If it’s natural and not forced, you can deepen the connection and develop unlimited loyalty.
I go back to the previous answer. Like any good friendship, if you’re spending too much time together, you’ll probably need a break. You have to know when to make the heart grow fonder, so to speak. Every product and every brand is unique, just like the people they need to build their brands. Be a friend, bring value, bring joy. Otherwise, you’re just noise.
Lucy Halley, Head of Strategy, London, Havas CX Helia
Mentalities are changing and ‘loyalty’ is no longer = preference for a single brand. Brands must now address three distinct consumer needs to earn their share of the pie: functional (feel recognized and rewarded for existing daily spend), personal (feel recognized and rewarded in a way that is personally relevant), and collective. (feeling shared with the brand).
“Functional” without “collective” results in an undifferentiated and transactional loyalty program. “Collective” without “functional” means that your program lacks solid foundations. Each set of needs must be considered and balanced to reverse the erosion of customer loyalty – and that means the one-size-fits-all, “set it and forget it” approach of the past is no longer feasible. Brands need to be forensic in their understanding of how and why customers buy with them, and continually evolve their experience accordingly.
Dean Lanzman, Chief Data Officer, MullenLowe Profero
While the temptation is to default to a loyalty program, the truth is that loyalty is the result of earning every customer experience every day. Brands need to leverage their technology and connected data by listening more, not just to sales, but to people’s unique behaviors, engagement channels, and pain points along their journey. These signals need to be converted at scale and speed, with precise relevance and in context to their point in their journey.
So whether it’s the lure of points and money, or the value of more contextually relevant content, if it’s truly valuable and meaningful today, then maybe be that customers will come back tomorrow.
If you would like to participate in future debates, send me an e-mail: [email protected]