How customer loyalty strategies need to evolve.

Transcription

1 How customer loyalty strategies need to evolve.

2 The reward based loyalty program has been around forever. One of the first recorded examples was in A U.S. merchant handed out copper tokens that customers could exchange for goods. Over 200 years later, programs largely haven t changed. I purchase goods or services from you, and I receive some financial reward for doing so - usually in the form of discounts or points that I can redeem. The vast majority of loyalty programs today are still earn and redeem style, which says something about the effectiveness of these programs throughout the years. However, today we live in a very different world. Purchases are less transactional and functional. We have the world at our fingertips and we have a ridiculous amount of choice. In the last 10 years alone, we have seen a massive paradigm shift. Let s explore the major changes, and how you ll need to adapt your loyalty strategy for today.

3 We ve gone from mass to individual Social media, blogging platforms like Medium and even e-commerce sites like Etsy have given us freedom to express our individuality. In software, we re able to customise to our personal needs and wants. From simple aspects like colours of interfaces through to Google-like analytics that tailor content based on our behaviour and preferences. In the physical world, this movement has given rise to companies like Shoes of Prey. They allow you to design your own shoes, from picking colours through to modifying heel length and strap style. Hyper individualised. These personalised products and services are becoming mainstream. As this rapid and disruptive world of software technology and startup businesses shifts consumer behaviour - we start to see a major impact on more traditional businesses. Traditional loyalty programs are diminishing in their effectiveness. In a world where we value personalisation, customisation and genuine quality products - the loyalty program of the last 200 years is feeling more and more out of place. As far back as 2013, in a Colloquy report titled Global Strategy, Local Tactics, consumers responded with a less than 50% satisfaction rate on overall program features. Here are some reasons why. We re craving personalisation. When you give me the same points and rewards as everybody else, I hardly feel special. "You re not demonstrating loyalty to me, so why should I reciprocate with my loyalty?. In a survey completed by digital marketing agency, AgilOne, it was found that more than 79% of US and 70% of UK consumers want personalised experiences from the brands they shop with.

4 Loyalty as a term has been tarnished. Loyalty is not a strategy, a points program or something we do. Loyalty is a powerful concept. It s about showing devotion and allegiance. It s about being a die hard fan and unwaivering in the face of doubt and pressure. Given pressure to change to another brand, how likely is your customer to try another brand? So often, today we see loyalty for a reason as opposed to loyalty beyond reason. A term coined by Kevin Roberts, author of Lovemarks and Saatchi & Saatchi Chairman. The successful business of the future invests in building loyalty beyond reason.

5 Loyalty is earned, not bought. It s earned by raising the bar on product and customer experience. It s earned through delivering something that s meaningful and valuable to the customer. That s why modern businesses like Zappos don t need a loyalty program to create a fanatical customer base. They re all about creating happiness. They believe their business growth will be from genuinely making their customers happy - and that s all about providing the best customer service in the world. Amazon - has people pay for their program. Not a traditional loyalty program - it s a membership program that s all about making the experience better. Faster shipping, access to movies and music and nothing related to rewards. They recognise loyalty is created with a better product and service. It s not how much you give, it s about how you demonstrate to your customers that you appreciate their loyalty. Earn trust and loyalty - through genuine relationships. This is done by caring about customers, and interacting with them in a way that s personalised at every touchpoint. To illustrate the opportunity, imagine your business as a friend. Now imagine the scenario where your friend forgets you after every interaction. Every time you meet them, you have to reintroduce yourself. That s what businesses do today. Now, imagine your business as a fairly new acquaintance. The next time you see them, they greet you like an old friend, remember what you last spoke about and still know your children s names. The difference is night and day, and that s the future of loyalty. Businesses will behave like one single person, and the customer will feel connected at every touchpoint. It s omni-channel, personalisation and customer experience all rolled into one. In the second part of this white paper, we ll explore this concept in more detail and begin to look at how this can be achieved with large organisations.

6 Aura is a technology company that s leading the way in enabling businesses to create lifelong customers. We believe in creating customer experiences where the customer feels valued as an individual, and genuinely appreciated for their loyalty. People are at the heart of making this possible. Our core product, is a software platform that combines traditional loyalty software capabilities with cutting edge thinking such as personalised face to face customer service and rewarding customer behaviour, not just transactions. As an example, we deliver insights to staff just before a customer interaction, so they can personalise their service to better serve the customer. If you d like to find out more about what we do, please visit our website. Victor Yuen CEO victor@auraishere.com