Failing digital loyalty schemes are not due to a lack of customer willingness; according to Accenture, ‘the number of customers participating in loyalty programs has grown by more than 40 percent’, but 64 percent have switched provider so there is clearly an experience gap in expectation versus reality.
This experience gap stems from not understanding the “why” of the customer. People don’t use online channels just for price advantages, ultimately it’s about convenience and speed too. Yet there is a sea of homogenous loyalty programs that continue to focus solely on discounts. It’s no surprise therefore that 77% of loyalty programs based on these kinds of transactional behaviors fail within two years of launch.
Digital advances may have exposed the flaws in these schemes but it also offers companies the opportunity to create experiences that can transform customer loyalty. Here are 5 ways that you can reinvigorate your customers and keep them coming back for more:
1. Knowledge is power
Measure your success beyond simple metrics like the number of transactions or number of registered customers. Measuring customer lifetime value is a start, but including a customer effort score (even in your loyalty loop), as well as net promoter score showcases the effect of the experience you provide in emotional and behavioural aspects.
In addition to these insights, general data storage is equally important. Whether it’s as simple as the personal details of a customer, or more complicated insights like composition of the household, or even predictive insights like finding patterns in behavior. Capturing and making sense of this data is one of the most fundamental tasks to achieve success.
However diligence and regulatory compliance is advised. Not just due to the hefty fines associated with a breach of said regulations, but more importantly because 55% of customers are concerned about the collection and use of their personal data according to .
2. Get back to basics
Re-evaluate your entire loyalty strategy and peel it back to its most basic features and channels, based on previously mentioned insights. By simplifying the strategy, the risk of inconsistency decreases whilst an increased focus will free up funds for improvements on other elements like the online platforms.
3. Break down silos
As customers offer up a wealth of data and feedback, it’s important that this information isn’t locked down in specific enterprise silos. Combining information leads to a wide variety of new applications; whether it’s excluding customers with an extremely high churn prediction out of your branded advertisements - knowing they won’t respond well - to being able to create a next-best-action model for call center agents who deal with customers contemplating cancelling their contract.
Let’s not forget the Occam’s Razor principle: the easiest solutions are often the most likely.
4. Invest in the right technology
Organization silos are often the result of impenetrable legacy systems. Even if they allow a connection, the general lack of consistency in the data will still result in zero added value. Sunk cost fallacy is especially present when it comes to these systems; they have been around for so long and the investments have been so substantial that it’s difficult to leave them behind.
Clinging on to these systems will eventually hold back most organizations. With various Gartner Quadrants available for experience platforms, Customer Relationship Management, data management platforms, and many more, it has never been easier to create a new IT architecture landscape that enables the whole organization to be successful.
5. Create new, more meaningful experiences
With all of this in place, it becomes easier to meet the growing expectations of the customer. Enable them to unlock new (and exclusive) rewards as loyalty grows and entertain them by implementing gamification elements that make them return to you on a regular basis. Above all make it personalized and thus relevant to their needs.
Loyalty demands organizations to rethink old habits, and forces them to structure themselves around the needs of the customer. Loyalty is not bought, it is earned and it is not something permanent, but rather something you continuously fight for. Offering satisfying, consistent experiences across the customer journey will ensure they keep coming back for more.