Forget Points: CX Is Key To Instilling Loyalty

As the meaning of loyalty evolves, its measures of success change as well. For marketers that means thinking beyond mere transaction to a host of new indicators.

In the age of customer experience, loyalty marketing has moved beyond just earning and redeeming points based on purchases.

In fact, according to experts, every touch point and interaction that a company has with an individual is an opportunity to build loyalty.

“Loyalty has been defined mostly from a transaction perspective—frequency of purchase, evangelism after the fact, things like that,” said Farrell Hudzik, managing director of Accenture Interactive’s Global Loyalty and Rewards practice. “But I think it truly is moving beyond just the purchase behavior. Brands are now thinking of creating and instilling loyalty, both from a loyalty program perspective as well as just driving the preferred behavior from our customer base. … You absolutely have to have a good customer experience.”

And that experience must be seamless, she added, enabling brand or product interaction when, how, and where people want to be consuming.

According to Max Leletskyi, head of media acquisition at Global Digital Marketing Group, customer loyalty also is about cultivating a personal preference to a service or product, which is gained and reinforced by positive experiences with a brand.

“The recent tendency in building customer loyalty is subtlety,” Leletskyi told CMO.com. “Monetization methods are getting less intrusive, and brand message delivery is not nearly as aggressive as it was only a couple years ago.”

Measures Of Loyalty

As the meaning of loyalty evolves, its measures of success change as well, said Andrea Bridges-Smith, marketing manager at email service provider PostUp. Engagement is an important measure of loyalty, with marketers not just looking at how often folks purchase, but also how often they visit a website or seek out information about the company.

“I would define customer loyalty as how often [customers] come back to you to have their needs met,” Bridges-Smith told CMO.com. “I don’t mean that from just a transaction perspective.”

Indeed, the fact that marketers can now show demonstrable increases in key performance indicators has totally changed—and complicated—the game, added Brandon Logsdon, CEO of Excentus.

“There are more places to keep track of customer interactions now, and wrangling them all into a single customer loyalty score is the perennial challenge for marketers,” Bridges-Smith told CMO.com.

The problem is, customers have different habits and behaviors, said Maor Sadra, AppLift’s managing director and CRO. For example, marketers now need to precisely calculate metrics such as customer lifetime value (CLV), both current and predicted, of several segments of customers.

“Segmenting them into clusters depending on their value is a non-negotiable prerequisite, as it will provide you with an estimation of the price you are willing to pay in order to grow and retain them through the right messaging and incentives,” Sadra said.

Ran Avrahamy, VP of marketing at AppsFlyer, agreed that CLTV is an excellent way to measure loyalty against how much revenue an average customer generates. He also echoed Bridges-Smith that engagement matters. Every time a user opens an app or engages with social content, that action presents value to the business.

However, Avranhamy warned, the goal of loyalty marketing is not just to build brand preference but also to drive meaningful revenue activity and, ultimately, ROI.

“There was a time when connecting the dots across loyalty channels and demonstrating ROI was near impossible,” he said. “However, increasingly marketers are seeking the data flexibility and insights that help them connect the dots and identify omnichannel ROI.”

In addition, influencer scores are poised to become important in measuring loyalty, especially from a social media perspective, as are referrals and reviews, Accenture’s Hudzik said. “It’s going to be a gauge of loyalty to a brand, as well as the ability of those individuals to be able to drive attributable revenue from new customers and increased traffic from existing customers,” she said.

Keys To Success

Beyond definitions and metrics, what else should loyalty-minded marketers be thinking about? Exclusive content that is informative or entertains—without selling—for one, PostUp’s Bridges-Smith said.

Contextual relevance—using the right channels based on who the target customer is—and, of course, providing a superb customer experience every step of the way, are two more, Excentus’s Logsdon said.

“In order to succeed, different touch points for consumers along the path to purchase need to be connected to create a great, cohesive experience—from the initial moment of engagement to the dialogue that occurs in the form of push notifications, email, retargeting, and social media—all of which generate valuable data for marketers that inform decision-making around future conversations,” AppsFlyer’s Avrahamy added.

AppLift’s Sadra pointed to personalization and customer-specific messaging, saying marketers are missing the granularity necessary to maximize the impact of marketing initiatives.

Mobile, he said, is a true loyalty game-changer for brands willing to analyze their customers’ behavior via this channel. “It gives exceptional insights and data points on their users if we consider initiatives related to cross-device technologies and point-of-sales tracking,” he said. “Marketers are getting closer in their quest to understand the full customer life cycle journey.”

Leletskyi agreed about mobile, while Accenture’s Hudzik said the most important component of a loyalty marketing strategy is the data.

“Marketers can microsegment down to their audiences and truly understand how to provide differentiated offers and experiences based on what the data is telling you about your loyal customers,” Hudzik said. “There’s just a never-ending ability to be able to leverage data to differentiate experiences. It’s a matter of keeping up, from that perspective, and also being very conscious of wherein all these opportunities lie.”

But don’t be overzealous, she cautioned. “We also need to be very careful from a privacy and a compliance perspective, to make sure that we are using that data in an appropriate way, in a noncreepy way, that instills loyalty,” Hudzik concluded.

Customer experience is going to be a big topic of discussion at Adobe Summit 2017, March 19-23. Click here to view the agenda and register. (Bonus: Enter code CMDC17 for an additional $200 discount.)