Peter LaversPeter LaversFebruary 12, 2020
e-commerce-3406613_1280-1280x853.jpg

14min940

The SAS/Futurum Experience 2030 report has posed an interesting question: what will drive customer loyalty by 2030?

The landscape of customer loyalty is changing. Gone are the days where consumers placed blind faith in brands, shopping habitually for their convenience.

Empowered by technology, consumers are using easy browsing to compare the competition, finding the best deals for them at the click of a button. Does this mean that all hope of customer loyalty is lost?

Definitely not. Brands simply need to react to this new age and work harder to firstly understand the driving forces of loyalty, and then to actually earn it.

Customer loyalty theory boils down into two different aspects:

  • Behavioural loyalty customers repeat purchasing your brand/product. This is sometimes referred to as “continuity”, as it could be simple convenience that drives this behaviour, or customer “inertia” (can’t be bothered to switch) – neither can hardly be described as loyalty!
  • Attitudinal loyalty usually described as some sort of ladder with ‘trial buyers’ at the bottom and ‘advocates’ or ‘fans’ at the top. Some CX practitioners are of the opinion that if you ‘wow’ customers enough you’ll make them advocates (high NPS) or fans (with your brand metaphorically tattooed on their arms). There’s merit in this argument, but we can’t automatically assume that high attitudinal loyalty equals your “best” (i.e. most profitable) customers – that depends on their spending power. We also can’t assume advocacy higher up the ladder – studies have shown that new customers are just as likely to recommend a brand if their purchase experience was good

I hope that you see from this (perhaps over-simplified) description that a brand needs both attitudinal and behavioural loyalty to be sustainably successful.

For business value to be delivered, I hope it’s also clear that behavioural loyalty keeps the bread on the table.

It is sobering to realise that some of your most profitable customers (high continuity with low cost-to-serve) may have little or no attitudinal loyalty. These customers may well consider moving their business to a new entrant or more convenient provider if the competitive offer is sufficient to overcome inertia.

The question in the SAS/Futurum Experience 2030 report is clearly more focused on behavioural loyalty, asking for “up to THREE features you believe will be most important to you in deciding to be loyal to a brand or organization”.

The results give eight attributes that consumers say will drive loyalty in the future:

ATTRIBUTES CONSUMERS SAY WILL DRIVE LOYALTY 2025 – 2030

(Top three most important to be loyal)

1

High Quality Products or Services

2

Low Cost or Special Discounts

3

Special Recommendations, Upgrades or Incentives

4

Immediate Availability (delivery within a few days)

5

Immediate Availability (same-day delivery)

6

A live person on the phone to answer questions or provide support

7

Sale notifications on my mobile or app

8

Social Responsibility (supporting causes I agree with)

High quality is top of the list. It’s worth reminding ourselves that ‘quality’ is not necessarily about ‘premium’ or ‘luxury’. In its most rudimentary definition, it’s about delivering what was ordered on-time, on-cost and to the required specification – very much about getting the basics right.

‘High’ quality is doing it well! If you can consistently deliver what you promised when you promised it at a reasonable price then you stand a chance of building both attitudinal and behavioural loyalty. It’s not sexy like CX delight theory, but it earns you the right to go on and build and deepen the relationship.

The features that come 2nd, 3rd and 7th are very transactional, and consumers are confirming that their behaviour can be influenced by offers if they’re well-made and appropriate.

This very much speaks to the need for providers to excel in real-time personalisation. Companies will build loyalty if they can truly understand customer needs and propensity, and then meet individual customers on their journeys to make relevant value-adding offers.

Expectations for quick or immediate delivery have soared in recent years, and the fact that they come 4th and 5th on the list shows how empowered consumers now are. Providers used to specify what “on-time” meant. Customers can now easily decide if that’s not good enough and switch provider.

The 6th most important feature – live person interaction – is a timely reminder to companies dashing for digital transformation that they mustn’t lose the human touch. There was a chatbot option in the question but it didn’t make the top eight. Should we scrap our digitisation plans?

NO!

What we should do is have equal weighting in those plans for CX and cost efficiency. Transformations that ignore CX in favour of cost savings will lead to customers feeling like they’re just a number and that they’re being ‘processed’ rather than engaged. Good “design thinking” is always CX-driven and should always address attitudinal and behavioural loyalty.

The final feature on the list (social responsibility) is the only one that’s purely attitudinal. Brand image didn’t even make the cut!

This is definitely one to watch, particularly with respect to climate and environmental issues. Even highly loyal customers will reconsider that loyalty if you’re caught out by  something that society deems as irresponsible e.g. single use plastics.

It’s interesting to note that one of the options in the question – VIP (loyalty) programmes – also didn’t make the top eight. This is a fascinating finding in its own right. It suggests that consumers are beginning to twig that they can get a better/cheaper/quicker-delivered deal by shopping around than by sticking with an existing provider and getting a retrospective “reward”.

Is this the death-knell for loyalty programmes? I suspect not as they are often an economic vehicle by which many of the features that did make the top eight are offered. Simple spend-related programmes are now ubiquitous. My advice is that if you are considering launching or re-engineering a loyalty programme then it needs to be something very special and truly innovative.

We need to change our mindframe: “be a loyalty company, not loyalty programme”. This is how the SAS/Futurum Experience 2030 report regarding ‘Loyalty in the Digital Age’ concludes.

We must instil this attitude into our brands if we are to achieve customer loyalty. It does away with the passive approach of the past, instead urging brands to combine both attitudinal and behavioural loyalty methods. To do this, we must provide innovative design-thinking approaches to our transformation programmes, becoming increasingly customer centric and insight-led in the process.

As a result, we can disembark from the merry-go-round of ever-diminishing customers who have yet to consider our brand and begin to establish a clientele who have truly bought into the brand.

This is how we achieve sustainable business and profit.


Paul AinsworthPaul AinsworthJune 18, 2019
credit-card-3186083_1280-1280x720.png

4min1729

New research shows that the public appetite for points and plastic is as popular as ever, with the majority of UK customers subscribed to at least one loyalty scheme.

According to Hawk Incentives’ The Loyalty Evolution Report which surveyed 2,500 people across the UK – a massive 82 percent of Brits are signed up to one or more programmes. Sixty-four percent are signed up to between one to five loyalty schemes, followed by six to ten (14 percent), and 11 to 20 (two percent).

The founding grocery godfathers’ of loyalty schemes still take the lion’s share of the market, with eight-out-of-ten (81 percent) consumers admitting to subscribing to a supermarket loyalty card scheme.

The UK’s burgeoning coffee shop culture is also driving consumer loyalty, enjoying 42 percent of the share of the market, with restaurants in third place with 33 percent. Least popular currently are fuel schemes (with only six percent of the population subscribing); technology schemes (eight percent); and sports retail loyalty and rewards schemes (19 percent).

The study also revealed that 62 percent consider themselves to be brand loyal. Contrary to previous studies which have painted younger shoppers as more fickle, the Hawk report reveals that Gen Z, Xennials, and Millennials say they stay faithful to the brands they like or love. Indeed 77 percent of 25-34 year olds claim to be brand loyal, along with 70 percent of 18-24 year-olds and 34-44 year-olds.

Meanwhile, 85 per cent of females are signed up to loyalty and reward schemes, compared to 76 percent of men.

Lack of interest was cited by a fifth (20 percent) of respondents as the main reason for not signing up. Seventeen percent cited a perceived lack of value. This is also a greater reason for men (21 percent versus 11 percent for females), as well as the older age group (24 percent). Older consumers aged 55-plus are failing to sign up over concerns about the use of their data, the report found.

Despite the rise of digital technologies, consumers would still prefer a physical loyalty card rather than a digital format. This is the case for both subscribers and non-subscribers.

Over half (58 percent) of subscribers and 30 percent of non-subscribers said something in their purse or wallet was preferable to a smart phone app or another digital platform. Perhaps not surprisingly, non-subscribers don’t really have a preference, but 46 percent said they would still prefer a physical card if they could choose.

Chris Ford of Hawk Incentives said: “The fact that only 15 percent of consumers don’t currently subscribe to rewards programmes shows loyalty schemes are still very much alive and kicking. However, it appears consumers’ perception of them may have shifted as people become more concerned about data in the Facebook era.

“What we do know is that brands that offer loyalty schemes which are relevant, offer choice, and are easy to access, create the best opportunity to engage an already receptive audience of active customers. Mining your data intelligently and sensitively to create targeted rewards and incentives will only make consumers more brand loyal and better brand advocates. Reassurance that their data is in safe hands is, of course, also key in the age of transparency.”


Paul AinsworthPaul AinsworthApril 26, 2019
wallet-1013789_1280-1280x853.jpg

3min939

Thirty-five percent of UK customers only engage with brands they agree with ethically, highlighting the need for brands to consider more than just products and price points.

A new report published by customer engagement specialist ELLO Media, Understanding Customer Expectations of Brand Loyalty Programmes, looks into consumer attitudes towards loyalty. It also found that 61 percent of consumers reported feeling the strongest connection to brands they use regularly, while 39 percent said this applied to the brands they aspire to use.

When asked specifically how they feel about the brands they regularly engage with, 38 percent of consumers said they only use brands that treat them with respect; 30 percent said that they feel like the brands they use are an extension of their personality; and 30 percent said that they only engage with brands that treat them as more than just a customer.

Michael Kalli, Managing Director of ELLO Media, said: “In the age of comparison sites and cost-cutting where there are a multitude of tools available to help find the best possible deal, consumers now expect to been seen as more than just a customer. This not only highlights the need for brands to make them feel valued with the rewards they receive, but also that brands must really understand their customers, aligning their offerings with the ethos and values that they hold.

“While customer expectations are evolving at an alarming rate, so is the development of data capture technology. This presents brands with the opportunity of gaining a better understanding of their individual customers than ever before, to ensure they are tailoring their loyalty and engagement strategies accordingly.”

Consumers were also asked how they feel when a brand engages them personally. Thirty-five percent said this made them feel like their loyalty was rewarded; 34 percent said it made them feel valued; and 21 percent said it made them feel like they were important to the brand. Being surprised with rewards was identified by consumers as their favoured form of brand engagement (70 percent), followed by surprise gifts (66 percent), and brands doing something out of the ordinary (57 percent).


Naeem ArifNaeem ArifApril 5, 2019
card-4060870__480.jpg

8min1792

The focus of many marketers and CEOs is to ensure they are getting the attention of their target customers.

Most of them are spending most of their time and effort on this activity, without thinking about the other related activities. Once you have the attention of your target market and you have them highly engaged in all the content you are producing…what next?

Well hopefully, they will buy from you now; they will accept that you are good at what you do and you align with their own personal values. Up until now, it is all based on you issuing a promise to your prospect that should they follow-through and make that purchase, this is the outcome you will deliver.

I read recently a long article on HBR that stated “highly engaged customers will become loyal customers”, and it got me thinking: this is not necessarily the case. From our own real world experience, yes the two things are linked, but not dependent on each other. Some of the best marketing campaigns do not lead to long-term profit.

If we break this down, a customer is someone who buys from you and a loyal customer is someone who repeat buys from you. So no matter how engaged they are with your content and your brand, they may or may not repeat buy. They could stay engaged in order to receive the content or information because it is educational or amusing, but will they definitely maker another purchase?

This is a separate question completely and there are an increasing number of consumers out there who consume content, but do not buy.

A key realisation will happen at the point when they consume your service. This is the moment of truth, when we will really find out if you deliver on your promises. This is the point at which they decide – does the product taste as good as the packaging?

So far it has been an emotional connection, where they feel this is a good choice for the prospect to make. Now we will see the delivery of this promise. You can either fall short of the promise and maybe lose them, or you can fulfil that promise, in which case you will retain that customer for the future.

At this point, your content marketing is irrelevant; if the product does not match the packaging it will be a failure for your objectives. So no matter how good your engagement strategy is, you will not have a loyal customer.

So a few questions you may want to ask yourself:

  1. Does your team – who are delivering the service – match the passion, drive, and standards that your sales and marketing staff possess?
  2. Are you interested in this single transaction, or are you willing to treat the customer so well that they want to come back for more?
  3. What is that little bit extra or something different that you are giving that will make you stand out and be more memorable than your competition?

If you want to get loyal customers, then you need to ensure that your operations strategy is in line with your marketing. Building loyalty is not just about a single transaction – it is about many transactions. If you only measure your team on turnover or profit, then there is no reason for them to worry about repeat business. The reality is that the returning customer will firstly buy quicker, and secondly buy bigger or more than they bought last time, because they already know and trust you.

Your team should be thinking about what your customers value, not about how much they can squeeze out of them in this single transaction. I would rather give something that is fit for purpose today, because the customer will appreciate my honesty and come back to me for more. The multiple transactions will deliver more profit to me and so I am interested in the lifetime value of this customer.

A lot of people talk about this concept, when in reality, it is something that has be measured and delivered over a period of time. You need to be ready to see the benefits over time, because you will not see them in the short term. This is why it is important that you are prepared to measure your staff on things other than sales.

If you deliver on this, you could of course exceed expectations and deliver more than what was promised, which is even better. In such cases you will probably have an advocate on your hands – someone who not only returns to you, but actually tells others to also buy your product. Make sure your team understands your strategy here and follows it through.

So if you are thinking that engaged customers will always lead to loyal customers, think again. Consider instead that delighted customers will be what leads to loyalty. 


Ryan LesterRyan LesterApril 4, 2019
bag-15709_1280-1280x853.jpg

5min784

One of the biggest challenges for retailers is not getting customers, but keeping them.

Loyal brand ambassadors are the backbone of growth and building long-term interest in a brand is no easy feat. Customers want personalised experiences and services that makes them feel as they are the most important client. A 2018 Bond Brand Loyalty Report found that 87 percent of people say they are open to having various details of their activity monitored in exchange for more personalised rewards and brand experiences. Consumers value convenience, time saved and flexibility and they will shop around for companies that can give them just that.

In addition, customers want white glove treatment should a problem arise. Even one negative experience can have a customer switch their allegiance to another firm. Efficient customer support has become a true competitive differentiator and businesses have an opportunity to stay ahead of the pack if they act quickly.

recent Vanson Bourne survey, found that less than 50 percent of customers considered their recent retail interaction to be excellent or very good, which gives retailers a new goal to meet.

With Customer Experience becoming a key success factor, businesses are turning to new technology solutions to help them quickly scale, improve responsiveness, and increase conversion rates. AI-powered chatbots, for example, are helping retailers be more responsive to requests and can even offer customers a concierge-like experience by providing personalised suggestions based on browse history, previous purchases, etc. While these chatbots are delivering highly intelligent self-service, they are also working behind the scenes for the customer service teams, gathering pertinent information about the customer and the question or issue to help the agents provide quick and personalised support from the get-go.

So how is AI helping retailers build brand loyalty today? Here’s just a few ways:

1. Offering 24/7 Service

Most online shoppers aren’t browsing during normal business hours. And when they have a question, waiting until the next business day to respond could mean losing the sale altogether. Chatbots are helping retailers be available to their shoppers 24/7 – answering the most frequently asked questions with ease and helping to ensure customers are getting what they need while they are ready to buy.

2. Creating a concierge experience

As AI continues to evolve, it’s starting to move away from handling simple questions and into acting as a customer’s personal assistant while shopping – providing personalised recommendations, reminding shoppers of sales to help them save, providing content to help with decision making, and much more. This level of proactivity means retailers don’t have to wait for the customer to engage, but can start building relationships by delivering information at the right time and in the right way.

3. Freeing up human agents

With all this talk about AI, what about the human agent? Individuals still play a pivotal role in the overall Customer Experience – but they are being leveraged in a different, more strategic way. Most customers hate waiting on hold – especially when they are having a problem. AI removes the need for customers with simple questions to clog up the human agent queue and allows customer service teams to spend more time with the customers that need them most. They are not only in a better position to resolve issues faster, but can spend the time to turn a sour experience into a positive one.

So are customers really onboard chatting with bots? The Vanson Bourne study also uncovered that more than half of customers agree that AI is changing Customer Experience for the better. I suspect this number will grow as the technology evolves and becomes more mainstream.

Today’s AI is all about delivering customers an intelligent and frictionless experience throughout their entire journey. When customers feel valued, they continue to come back again and again.


Paul AinsworthPaul AinsworthMarch 26, 2019
woman-3373637_1280-1280x876.jpg

3min777

Almost half of UK customers (47 percent) believe it no longer pays to be loyal, according to a new report into consumer attitudes.

The research by ELLO Media found that out of 1,000 customers, 57 percent have switched providers in at least one market sector (utility, banking, mobile network operator, supermarket, fashion retail, in-house telecom, and media) in the last 12 months. More than one-in-five (22 percent) had switched utility providers; 21 percent had switched insurance providers; and more than one in eight (13 percent) had switched their in-house telecoms provider in the past year.

However, more than a third of consumers across all market sectors said they would be loyal to brands if they got true value for their loyalty. When asked about how they like their loyalty to be rewarded, respondents identified supermarket vouchers (53 percent), restaurant discounts (24 percent), and cinema discounts or tickets (19 percent) as the options they felt offered them the best value for staying loyal.

Michael Kalli, Managing Director for ELLO Media, said: “The findings of the report reflect that consumers will be loyal when they feel they are receiving real value for doing so. The fact that so many feel it no longer pays to be loyal and have switched at least one provider in the past 12 months shows that brands’ loyalty programmes simply aren’t delivering for their customers.

“Rapid developments in data capture has presented businesses with an incredible opportunity to learn more about their customers than ever before. Yet many brands still aren’t making full use of the technology on offer, leading to their loyalty schemes failing to meet customer expectations. With it costing five times as much to acquire a new customer as it does to retain an existing one, it is in brands’ best interests to start improving their loyalty programmes in earnest.”

Consumers were also asked to identify which brands they felt most loyal to across the banking, insurance, utility, supermarket, fashion retail, in-house telecom, mobile network operator and media market sectors. The brands that consumers feel most actively loyal to in each market sector were identified as:

  • Media provider – Netflix (32 percent)
  • In-house telecoms – Sky (23 percent)
  • Supermarket – Tesco (20 percent)
  • Utility – British Gas (18 percent)
  • Mobile network operator – EE (18 percent)
  • Fashion retailer – Primark (17 percent)
  • Insurance – Aviva (14 percent)
  • Banking – NatWest (12 percent)


Ian GoldingIan GoldingMarch 15, 2019
Loyalty-1280x748.png

4min1223

Customer Experience specialist Ian Golding, author of Customer What: The Honest and Practical Guide to Customer Experience, writes for Customer Experience Magazine offering expert insight to help businesses improve their CX offering. 

To ask Ian a question on how to boost the Customer Experience provided by YOUR business, please email your question to editor@cxm.world. The best questions will be featured in future instalments.

Ian also leads the CX Professional Masterclass. Click here for details of upcoming Masterclass dates.

As a smaller business, should I consider customer loyalty schemes as part of my Customer Experience Strategy? Can they add value to my business, or is it common for customers to fail to engage with them?

I have always believed that if done well, customer loyalty schemes can be extremely effective as a way of maintaining engagement with those who interact with your products and services.

By “if done well”, I am suggesting that some are not!

Typically, the domain of large corporations in the travel, hospitality, and retail industries (although not exclusively), if the ‘effort’ is effortless and the ‘reward’ is rewarding, then a loyalty scheme could be a differentiating factor in the mind of your customer.

Personally, as a frequent traveller I will always look to fly or stay with an airline or hotel that will provide me with a benefit for using them regularly. To me, the reward of ‘free’ flights or hotel stays is a worthwhile incentive to keep using certain brands.

However, the loyalty scheme alone must only be perceived as just one touchpoint in the customer journey – if other things in the journey go wrong, I will gladly give up my perceived ‘benefits’ and take my business elsewhere.

There is absolutely no reason why the principle of a loyalty scheme should not be applied by smaller organisations – as long as it is sincere and commercially viable and a way of driving differentiation.

However, there is no sense putting a loyalty scheme in place if it will run your bottom line into the ground! Also, do not forget the ‘sincerity’ part of my statement. If a loyalty scheme is perceived by your customers as a way to try to ‘sell them more’ or spam them, then it may be better not doing it in the first place.




Inform. Inspire. Include.
A free way to improve your business.

Customer Experience Magazine is the online magazine packed full of industry news, blogs, features, reports, case studies, video bites and international stories all focusing on customer experience.


CONTACT US

CALL US ANYTIME



Contact Information

For article submissions:
Editor
Paul Ainsworth
paul@cxm.co.uk

For general inquiries, advertising and partnership information:
alexandar@awardsinternational.com
Tel: 0207 1932 428

For Masterclass enquiries:
vuk@awardsinternational.com
Tel: +44 20 86385584

Awards International ltd
Acacia Farm, Lower Road,
Royston, Herts, SG8 0EE
Company number: 6707388

JOBS IN CUSTOMER SUPPORT

Find a job in customer support with Jobsora


Newsletter