From The Wise Marketer’s Loyalty Guide 4:
Capturing data, measuring unique transactions, acknowledging loyal and valued customers, treating customers differently according to their value, communicating with them in a relevant manner, analysing your results, enhancing your approach, are all great strategies for making more money. But you either believe in a measured, consistent approach to customer engagement and its ability to drive incremental profits, or you don’t, says Carlos Dunlap, practice director of the loyalty consulting group at Kobie Marketing. Either approach could work, but why does it really matter what your customers think?
Customer desires, affinity for the brand and preferences are considered irrelevant to many marketers who simply blanket the marketplace with “cool” and creative print ads and media (mostly using children, animals and supermodels, it seems). Those who prefer direct mail shower their purchased lists with their best offers — often some form of discount for a premium product — in the belief that they’ll get some kind of result if they just hit the list hard enough and often enough. Actually these marketers feel quite safe because they get to do it over and over again with a new piece of “test creative” and another new list of anonymous potential customers. There are also some marketers in the loyalty space who genuinely believe that you can completely and accurately determine a customer’s loyalty with a single question (“How likely are you to recommend us?”).
Traditional marketing is much like the one-size-fits-all approach. Pushing a brand or product by highlighting the same features and benefits to everyone doesn’t take into consideration the variable buying decision criteria of different segments of consumers. Without understanding the personal differences, the value drivers and the intent of individuals, traditional marketing efforts lack the power to motivate the majority of the target audience. Consequently, some new customers will be of long-term value but many will not be worth the cost of acquisition.
Direct marketing is exactly like this, with a few test variations — and hopefully a control group — to make us feel better about the usually high failure rates. Sponsorships continue to be an expensive proposition without a measurable benefit. And then there’s mass advertising. Creative television commercials may win awards but they don’t necessarily sell products. And like sponsorships, mass advertising is more about ego than driving business success or measurement. How many times have we seen big companies in the spend millions of dollars on ultra-creative Super Bowl commercials, only to be struggling or even out of business within a year?
I’m not against direct marketing. But I’m a firm believer in a consistent, measured approach to marketing, acquisition and ongoing communications. Most importantly, your ability to measure the appeal and responses to all of your communications may make all the difference in your marketing efforts. Understanding and predicting your response rates and the correlating financial benefits will help you design and justify your campaign before its execution.
Marketers have a unique opportunity to make a measurable and justifiable difference. As loyalty practitioners, we must do the right things. A trusted and well-rounded approach requires us to focus on building loyalty strategies for the whole enterprise, delivering a customer experience that engages, and making every decision based on the economic drivers of the programme. It’s this measurable, justifiable component of our trade that makes our services so appealing and valuable. And, apart from doing the right things, maybe it’s also time to reconsider the need to track and measure to the ‘nth degree’, provide hundreds of redemptions options and accumulate millions of dollars in points liability. Maybe we don’t have to do those things in such a scientific, statistical manner to make a real difference.
Keeping customers loyal takes more than a few promotional strategies and free samples. Companies must galvanize and align their whole organization with a true commitment to delivering consistent and good experiences for their customers. Employees function as internal advocates who continually breath life and passion into a successful customer loyalty strategy. Engaged and satisfied employees, combined with good products, services and value, ultimately lead to engaged, satisfied, loyal and profitable customers.
As an industry, we are at a critical stage of evolution. With the innovations in technology that allow for more efficient behavior tracking, we have no more excuses for not doing it right, whether the loyalty programme has a foundation of research, points and analytics, or whether it simply provides a good experience for every customer along with an occasional treat or special offer. Either strategy can work, but the combination of science and art might be the best approach for the future. If you want customer retention and ongoing earnings, then you must recognize profitable customer behaviors and reward them accordingly. When you get down to it, it’s not so much your customers’ attitudes and intentions but rather their actual transactions that boost the bottom line.