For all its benefits, the connected world is pressuring companies to come up with increasingly innovative ways to keep customers loyal to their products and services.
By Richard Flack, MD of Sureswipe
In fact, when it comes to the retail environment, virtually all consumers ‘cheat’ on their favourite stores. It has therefore become critical for brands to conduct more effective data analysis and reposition themselves in the hearts and minds of people.
Thanks to the digitisation of everything around us, customer expectations have fundamentally changed. They want real-time responses to queries, want brands to engage with them using the platforms they are most comfortable with, and are unforgiving towards negative experiences. This is resulting in almost half of shoppers saying they will stop purchasing a brand after two bad service experiences. But it is not even good enough to ensure a consistent, high quality service offering to end users that meet their expectations.
Even the best customers buy from competitors, resulting in a loss of sales in an organisation. So, even if the product and service levels do not assuage people from looking at alternative offerings, what are brands left to do? Simply put, data must be harnessed in new and more interesting ways to not only create differentiation but to deliver on the constantly moving consumer expectation goal posts.
Loyalty done differently
While many decision-makers believe that brand loyalty programmes are critical, the reality is most of these initiatives fail within two years. Some argue that the cause of this can partly be attributed to the intentions behind them, i.e. simply driving sales as opposed to engaging with customers.
A big part of the digitally-aware customer experience revolves around that of personalisation. Not getting content relevant to a person’s needs is, in fact, one of the most frustrating aspects around customer loyalty programmes – and even normal communication between a brand and an individual.
Fortunately, the signs are showing that marketers at least understand that personalisation will be critical to their success. They know that the brands that will drive growth are the ones that use customer data to help drive marketing decisions. Therefore, by using the data collected through customer loyalty initiatives, such initiatives can result in a brand providing a significantly more tailored approach to one-on-one engagement.
This data analysis must revolve around contextualising customer behaviour. Just because Person X buys Product Y once, does not mean they will continue to do so. Data analysis must go deeper than the first layer and interrogate purchasing decisions based on a more comprehensive view of a customer: who they are, where they are from, and so on. Unstructured data (think social media feeds) are great ways to ‘colour in’ the blanks around this behavioural analysis.
This improved understanding delivers new ways to target marketing campaigns. But perhaps more importantly, it can result in the creation of new segments that might have previously been hidden across a wider demographic breakdown.
An example of better gearing for specific needs can be seen through Netflix. It found that by improving recommendations by 10%, subscriber cancellations can be reduced by 1% – translating to a $500 million annual swing to the company’s bottom-line.
Most brands (we hope) understand that their customer needs are evolving. However, the rate at which this is happening might be catching them off guard. Thanks to the ever-increasing growth of data, as well as the means to analyse it faster and more effectively, companies are catching up. But the ones who are delivering in this environment more pro-actively because of their willingness to experiment with data, are the brands that will be at a competitive advantage for some time to come.