LOYALTY
Why
customers are less loyal to a brand?
Can you
buy loyalty?
“why
simply the best isn’t right” which surveyed over 40,000 customers across 20
countries, shows customer relationships have eroded even in traditionally
sticky sectors such as auto, finance and telecom.
70% of
Russians opt for a different company when replacing their TV;
12% of
Germans have cancelled an insurance policy in the last one year;
9% of
Spaniards have chosen a different fixed line telecom operator.
But in
India the story is different. These go for the lowest. All of us love freebies,
deals and discounts.
Travellers
want recognition more than rewards.
The
loyalty programmes lies in the data and insights they capture.
Launching
a loyalty programme is easy but maintaining and sustaining it is difficult.
Experts recognised that loyalty has
moved away from rewards to recognition and relevance. They see whether they are
getting free wi-fi, free airport transfers, invitations for that cocktail hour
in the evening….etc.?
There are
four types of customers
1.
The evangelists,
who swear by the products they are using and rarely change;
2.
The deal seekers,
who keep looking for offers they can leverage;
3.
The value difference seekers, who seek comfort and recognition and
high touch and feel people;
4.
The simple Samaritans, who are happy if they get peace,
convenience, and are process driven.
Today we
have their earn-and-burn relationship with the programme alive.
The
real value of loyalty is in delivering what your customer wants.
Loyalty is
not a measure of customer loyalty to the brand, but an indicator of the brand’s
loyalty to the customer.
In today’s competitive environment, the
way brands can gain customer share is by
being
relevant,
being
current,
being
meaningful.
The loyalty programme’s objective is to
enable better customer satisfaction through better customer understanding.
What does a cusumer want?
1.
Communication
2.
Greeting
by name
3.
Allow
discounts with thanks
It is not a marketing initiative but an
organisation’s initiative. With every brand fighting for the same set of
customers, in the long run, it is the consumer who could be the winner.
Customer
loyalty is not the same thing as customer experience.
Customer
loyalty is all about the relationship;
It is the
consumer’s actions and behaviour; that reveals their loyalty and provides
commercial value for the brand.
It is the
consumer’s experience in interaction with the brand.
Experience
is not the same as a relationship, and loyalty can be more than the sum of the
customer’s experiences.
The
overall customer experience is only as strong as its weakest link.
Customers
think of each brand interaction in combination with the ones that came before
it, comparing it with their expectations and possible alternatives.
Good
experience will lead to greater willingness to recommend the brand.
One
negative interaction can turn an advocate into an antagonist.
Customers become advocates when all the
most important brand interactions leave them with an overall positive feeling,
compared to what they have experience elsewhere.
In today’s time, when the face of
loyalty is undergoing radical change, brands should focus on improving customer
experience to help drive value, reduce costs and build a competitive advantage.
In-store experiences have great
potential for personal relationships, relying heavily on staff as brand
advocates who bring the brand and products to life.
Today’s smarter consumers are
increasingly show-rooming –
using
stores for product advice and research before buying from the cheapest source
on-line.
Brands are being forced to react or risk
not being part of the decision journey.
Brands that can leverage all their touch
points to develop positive relationships, and that seek to engender loyalty,
are effectively building the kind of customer-centricity needed to take loyalty
seriously.
