How to redefine customer loyalty for your organization

What is Customer Loyalty? How would you define it?

This issue has generated heated debates, both in the boardroom and at the bar. The most fundamental area of ​​disagreement is whether customer “loyalty” is truly achievable, or whether brands/retailers need to refocus on engagement and experience as the pathway 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 clearer every day that people are embracing new shopping habits and sharpen their preference for specific communication channels and payment methods.

People are also increasingly attentive to the retailers they frequent, carefully measuring brand values ​​to align with their personal values. This evaluation process is fueled by a subjective element where consumers listen to the news, scroll through Twitter and Reddit, and chat with their friends to process the latest post or supported cause that could alter their perception of a favorite brand.

The debate over whether loyalty is an achievable goal over a sustainable period of time is unsurprising in a world that generates news at a breakneck pace and where consumer behavior is mercurial to the point of being almost unpredictable. The customer retention debate has surpassed curiosity in its importance and has significant implications for the future of your business.

It’s time to redefine what loyalty means to your organization

Exchange Solutions’ consumer engagement and loyalty experts know firsthand how misunderstood the concept of consumer loyalty and value exchange can become in an organization. Mike Hughes, CEO of Exchange Solutions, explains why this concept drives their corporate mission.

“The concept of optimizing the exchange of value within a loyalty framework, formal program or not, is paramount to successfully achieving your organization’s consumer engagement and financial growth goals. Creating an exchange optimizing value involves understanding an individual consumer’s current behaviors and interests, identifying additional actions they could take, and presenting a cost-effective and attractive incentive that delivers value to the consumer while guaranteeing an additional and profitable transaction for the retailer.This is how we create win-win experiences for consumers and retailers.

All the talk about becoming customer-centric has led to the point where prioritizing customer retention is no longer an option, but a necessary skill for business survival. It’s time to consider your customers as your most important asset and take a clear view of how you plan to build trusting relationships with them over the long term. The “build it and they will come” mantra is much more applicable to loyalty marketing than it is to baseball.

The value exchange described by Mike Hughes means that when you take the right approach to 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 compensation in the process, so everyone wins if you successfully redefine loyalty in your company.

How are you getting started on the path to creating your own vision for customer retention in the future? You can start by determining whether your business is focused on the big or the little “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 programs offered by your competitors. What value do they give in their currency of points or miles? What types of rewards do they offer? What other program rules should be matched or exceeded?
  • You’d love to spend time investing in continuous improvement, removing friction from the shopping experience, and eliminating pesky program details that limit member value, but you spend most of your time defending the program to the boss.

If you focus on the Big L of loyalty, you probably have a C-Suite deal that puts customers first.

  • You continually refine your strategy to become truly client-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’re gathering a data-driven understanding of your customers’ behaviors and striving to collect even more information about their lifestyle, life stage, and personal values. to better serve them.

Forward-looking marketers know that expanding ranks of truly loyal customers is the golden ticket to profitability and higher equity valuations.

By focusing on the big L of customer retention, your strategy is implemented with excellent execution and generates additional visits, revenue and profits. You communicate more effectively with senior executives by providing access to performance measurement, which means you never have to say “I’m not sure” in response to the CFO or CEO asking how your business is performing. investment in customer loyalty.

Understanding the nuances of this debate is key to successfully guiding your brand to become more customer-centric. If you’re focused on your loyalty program, chances are you’ll never move the needle much to increase the number of customers who give you the benefit of the doubt. People don’t care so much if you have a program, they care how that program reinforces your brand promise and delivers extraordinary value. They want this program to testify to the hoped-for truth that your brand wants customer loyalty first and before anything else.

The Big L of customer retention is a supreme goal. Top-level marketers realize that absolutely winning customer allegiance doesn’t define success. Building trust, building brand affinity, and growing value is achievable and can be the most accretive aspect of customer loyalty to the business. Executing well with the value exchange in mind, as Mike Hughes described it, is the result of a Big L-focused organization.

Whether or not you have an explicitly defined loyalty program, you can win with a Big L focus. Your go-to-market strategy can be based on engagement-driven campaigns, and a formal program isn’t always necessary to achieve your goals. You may or may not choose to include promotional currency (points or miles), but you should tie the execution of your loyalty strategy to in-store and online operations to ensure loyalty is part of the customer experience and to communicate brand authenticity to customers at every point of interaction.

How to redefine customer loyalty for your organization

Joseph P. Harris