How do you solve a problem like... eroding customer loyalty?
Each week, we ask agency experts for their advice on real problems facing today’s marketing practitioners. This week, we ask readers how they plan on serving potentially disloyal customers.
How can brands adapt to consumers’ looser loyalties?
Customers are fickler than ever when it comes to consumer brands. The web has made it easier than ever to switch providers or brands, and easier again to publicize poor service – consider the uproar the other week when energy supplier E.On sent customers socks to help them cope with Britain’s spiraling energy crisis.
However, though consumers typically aren’t keen on constant communication with corporate entities, keeping so quiet as not to antagonize customers with too-frequent updates isn’t a viable strategy. So, how do you get that balance consistently right?
How can marketers harness customer loyalty for the good of their brands, while not leaning too heavily on those same customers?
How do you solve a problem like... eroding customer loyalty?
David Edwards, chief customer officer, AMV BBDO
Most national brands have in their databases a treasure trove at their fingertips to understand how their customers feel and what they think. Given loyalty – if it exists at all – is becoming ever more fragile, organizations should be doing more to truly get under the skin of their existing customer base. Had E.On sought the wisdom of their customers before going public, they would undoubtedly have been told, in no uncertain terms, to put a sock in it.
As to the question of acceptable frequency of customer engagement, if you’re listening to your customers, they will quickly tell you if you’re getting it 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 leadership lead, Wunderman Thompson Commerce
As far back as 2018, our research showed that consumers were more loyal to service than they were to brand. Yet the one thing that most consumers would change about online purchasing was faster delivery followed by free returns. It’s no surprise that the businesses that ticked those boxes thrived during lockdowns, such as Amazon and the aggregators that provided food to your door despite restaurant closures.
The focus must shift from brand equity and product to one that focuses on fantastic service. This will only become more important in the future, with 4% of global consumers expecting products to be delivered within two hours, 30% expecting delivery within 24 hours and 20% of 6-16-year-olds not even considering brands that can’t deliver within a day. To put it simply – without service, there is no loyalty.
Victoria Herrick, Strategy Partner, Strat House
Loyalty has never just been about firing out comms. It is about taking meticulous care at every touch point. For banks, the biggest loyalty driver is likely to be the experience delivered by their apps. Nothing says ‘we care about our customers’ more than silky smooth user experience (UX).
Last night, while in bed, I fell back in love with Tesco. Dismayed that the price of the hotel room I had wanted to book had risen by 150% in less than 24 hours, I turned to my Tesco Clubcard App. I converted points into a hotel discount, moved seamlessly from the app to a hotel booking site and secured the room of my dreams for a fraction of the price. All without leaving my bed. In under five minutes. On a broken iPhone 6. Am I feeling loyal? Yes I am.
Clare Lawson, chief executive officer, Ogilvy Experience
The drivers of loyalty have changed. It’s not just about points, prizes and mechanics to lock a customer into a long-term relationship. It’s about value-added experiences that serve them better and meet their needs, sometimes meeting needs they didn’t even think they had. Gen Z, for example, care only about experience, with 70% saying that alone will drive their loyalty and over 80% being willing to pay for richer experiences that add value. This illustrates that tending to your consumers needs’ before they even know what they are is essential in creating loyalty. Look at two-hour delivery, collect to a locker and review ratings ahead of purchase – customers didn’t need these, but these experiences and services are driving loyalty twice as fast as the traditional approaches.
Maggie Malek, chief executive officer, MMI
Loyalty gets tougher to maintain when consumers are presented with new, compelling options every hour. The technology that helps us cultivate our advocates is increasingly accessible broadly. But it’s that data, combined with human insights, that can stoke loyalists’ passion.
Tech gives us hints to when loyalty is at risk, and guides communications to connect with consumers’ evolving needs and tastes. Focus on relevancy, authenticity and transparency to keep key customers engaged. Create truly unique-to-your-brand personalized experiences that foster lifelong loyalty. And use data to continually identify emerging audiences that mirror the motivators of your fervent base to futureproof by establishing the ‘next generation’ of ambassadors.
Jo Penn, managing director, Armadillo
Not so long ago, the classic loyalty scheme looked in decline. If it didn’t evolve, it risked eroding the value of a brand’s best customers without driving any incremental behaviors or improved affinity. But the landscape is changing fast. A great loyalty proposition should now form part of a brand’s contract with its customers: digitization means we can create personalized rewards and experiences for customers at all points on the value pyramid, and in turn secure their willingness to share their data. And it’s that rich first-party data that businesses need to prioritize if they want to win.
Niaz Rizwani, strategy director, Tribal Health
A loyal customer is a satisfied customer. Customers don’t expect a barrage of emails offering advice – they do expect that when problems occur they are resolved timely and in a courteous manner. All customer-facing services and modalities should be effortless and friendly, reaching a quick resolution. You really need to know your customers and their preferences to do this.
Don’t be afraid to apologize if things do go awry. Ovo’s Stephen Fitzpatrick was quick to say sorry after their dreadful customer advice. And we all know not saying sorry can get you into trouble – just ask Boris Johnson.
Rich Edwards, head of planning, O2, M&C Saatchi
I’ve recently got a dog. He expects me to do certain things for him, and I do, reliably, without fuss. Not fun stuff, but important fundamentals. I also provide opportunities for fun, which create memorable peaks in our experience together and let us both show our appreciation for the other. It’s this good stuff that other people see and that we tell people about. Overall, we both get stuff out of it. Brilliantly reliable fundamentals and memorable moments. Which means we’ll stick with each other for life. That’s true loyalty. As a famous telco once said: “Be more dog.”
Nic Climer, executive creative director, RAPP Dallas
I am hypersensitive to the ways brands try and often fail at deepening my loyalty to them. Those who pound me with just deals and offers are the first to get turned off. But those who send me unique, targeted, very personalized content – I open and read just about every time. That to me is the key – having a real conversation with your customer. No different than building a friendship. You have to keep in touch, and there are peaks and valleys to those check ins. If it’s natural and not forced, you can deepen the connection and grow unlimited loyalty.
I look back at the previous answer. Like any good friendship, if you spend too much time together, you will probably need a break. You have to know when to make the heart grow fonder, so to speak. Each product and brand is unique, just like the people they need to build their brands. Be a friend, bring value, bring joy. Otherwise, you are just noise.
Lucy Halley, head of strategy, London, Havas CX Helia
Attitudes are changing, and ‘loyalty’ no longer = preference for a single brand. Brands now need to address three distinct consumer needs to earn their share of the pie: functional (feeling recognized and rewarded for existing, everyday spend), personal (feeling recognized and rewarded in a way that’s personally relevant) and collective (feeling shared values with the brand).
‘Functional’ without ‘collective’ results in an undifferentiated, transactional loyalty program. ‘Collective’ without ‘functional’ means your program lacks firm foundations. Each set of needs must be addressed and balanced to reverse eroding customer loyalty – and that means the one-size-fits-all, ‘set it and forget it’ approach of the past is no longer feasible. Brands must be forensic in their understanding of how and why customers shop with them, and continually evolve their experience accordingly.
Dean Lanzman, head of data, MullenLowe Profero
While the temptation is to default to a loyalty program, the truth is that loyalty is an outcome of winning every customer experience every day. Brands need to leverage their connected tech and data by listening more, not just to sales, but to individual’s unique behaviors, channels of engagement and pain-points across their journey. These signals need to be converted at scale and with speed, with precision relevance and in context to their point in their journey.
So, whether it’s the lure of points and money off, or the value of more contextually relevant content, if it’s truly valuable and meaningful today, then perhaps customers will return tomorrow.
If you’d like to join future debates, email me: sam.bradley@thedrum.com.