How often do you think your customers, upon closing a transaction, leaving the store, or visiting your web page, think, “Boy, that brand really understands me.” In fact, most organizations do have the ability to do just that – to really understand their customers. Technology is enabling brands to gather and decipher data at every moment, from the website to the aisle to checkout to the call center. All of these actions provide a window into the needs and aspirations of consumers. The question here is – if we have the means to gather such information, do we really use it wisely? Bryan Pearson, president and chief executive officer of LoyaltyOne shares his views.
The highest level of building customer relationship is all about gathering information, and then segmenting and deploying it across the organization, including to front-line staff, that distinguishes a chain that simply follows a consumer’s purchasing patterns from one that actually knows the customer intimately, and is willing to act on it.
Simply put: Companies succeed (or fail) based on the satisfaction and happiness of their customers throughout the brand interaction. And the most effective way to ensure customer happiness is by delivering experiences that are relevant. Relevance in turn will lead to customer intimacy and ultimately emotional loyalty with the brand.
But don’t confuse loyalty with the number of times a customer visits you. Repeat business may simply be the result of a variety of functions: location, price or selection. Emotional loyalty, however, is when a customer chooses to stay with your brand even when an equal or potentially better alternative is available.
Companies have the capability to analyze large amounts of data, segment customers by groups and create offers based on individual behavior. Likewise, they can use this information to build a more relevant experience, and turn that customer data into an engagement device.
The challenge is in understanding how to use all of this wonderful data in ways that don’t just create the exceptional experiences that deliver satisfied customers, but that result in engaged guests who have emotional loyalty to your brand.
These three steps will upgrade your brand from customer-merely-satisfied to customer happiness, through intimacy.
Define and Build Emotional Loyalty for Your Brand
If customer intimacy is the way to foster greater guest commitment, even in the face of competition, then loyalty, particularly emotional loyalty, is the result of knowing what your best customers love about you and building on that.
A customer may say she is loyal to one grocery chain because she stops by on her way home from work. But in reality, she may only shop there because it is on her daily commute. What if a new grocer, with wideraisles and better service opened nearby? Chances are she would try it, and if she preferred the price, service and selection, she would switch grocers.
But let’s say that same shopper has established a relationship with her long-time grocer’s employees, who greet her by name. She also appreciates that the employee who stocks the aisles lets her know when certain items are on sale and that the cashier tells her about upcoming cooking events. And she is impressed by the store’s follow-up emails, which recognize her purchases preferences in the forms of recipes and coupons.
In short, her long-standing grocer chose to invest in the customers it already has, and to use its data-insights to anticipate their needs and to build more relevant experiences.
When that new grocer opens nearby, this shopper chooses to stay with her older but more personalized chain. These actions all indicate emotional loyalty, and to retain it, you need to nurture this elevated level of brand commitment.
Assure You Are Relevant to Your Customers
Acquiring such commitment takes more than the right products, prices and location. To achieve emotional loyalty, you need to resonate with you customers through a differentiated experience.
Relevance represents the most powerful opportunity for companies to build long-term, profitable relationships. It occurs when you are able to understand your best customers’ core interests, assign value to them, and then connect with them in a way that says, “I know who you are, and I understand your needs.”
Many brands could afford to be more creative and expand their recognition options to meet the equally advancing or shifting lifestyles of their customers. What if a regular customer just had a serious health scare? Or perhaps a job promotion? Suddenly, the features that are most relevant to his preferred brand may change, to heart-healthy foods or a seat on business class.
Unfortunately, achieving relevance is an increasingly daunting task. As channels of communication proliferate and compete, the process of reaching the consumer is like whispering in a windstorm. The only messages that rise above the noise are those that offer solutions to specific customer needs – on a timely basis.
Any enterprise vying for the consumer’s time and interest is tasked with meeting the challenge of relevant and resonant communications so that they can be heard. People lead complex lives, after all, and engaging them effectively takes understanding them on multiple fronts: by location, timing and individual preferences.
Use Your Guest Data Responsibly
Having such ground-level knowledge of your best customers requires advanced data processes, and great responsibility. It is pretty straightforward: When consumers share personal information with you, they are entering into a value exchange, and they rightly expect something of worth in return for the data they give you. If you are a hotel operator and ask a guest if she prefers to sleep near to or far from the elevator, then provide her with the room she wants. If one is not available, offer an upgrade to one that is. This not only will win the guest’s admiration, but also expose her to the desired amenities of a suite and entice her to book one on her next trip.
In short: If you expect your customers to continue sharing information and business with you, then you need to give them something they value in return.
Also, be clear with your customers about what information you are collecting, why you are collecting it and how you plan to use it. It’s basic relationship building: For consumers to trust you, you need to be honest with them. Limit the amount of data you collect to only what you need, use the data you collect only as directed and as is permissible, and retain it only as long as needed.
And – it should go without saying – safeguard your customer data as if it is a corporate secret.
Building Experiences for a Happy Customer
By mastering and combining these principles, you have positioned your company to make the most important step it may ever face, one that will carry it from focusing first on the product to focusing first on the consumer.
This step, or in many cases this leap, occurs when everyone in the company, from the executive suite to the front desk, places the customer at the center of their purpose, and view their brand experience through the consumer’s eyes. This may seem like a given in many service industries, where the experience really is the distinguishing factor. But for those working in the sales aisle, the kitchen, the stock room or even the call center, the customer can seem pretty far away.
Bridging the gap takes the skillful collection, analysis and segmentation of data, always in the context of the consumer’s lifestyle. Companies have the resources to collect this kind of data. But to truly standout, they must use the data in ways that enable and empower all workers, and incorporate their guest insights throughout the operations of the entire organization.
With such comprehensive understanding of the consumer, we can develop not only the best services or products, but also the most effective ways to connect with customers and present them with relevant offers based on their past activities. And we can do this not only through our direct communications, but also through our frontline workers who complete the experience.
Think about it. Think about the companies that create truly relevant experiences for their customers and build long term, emotional loyalty in the process. They are all champions of customer intimacy, and not all of them even operate loyalty programs. But the ingredients to winning trust and emotional loyalty are the same.
At the end of the day, their customers are likely to say, “Boy, this company really understands me.”
Bryan Pearson is president and chief executive officer of LoyaltyOne and author of The Loyalty Leap: Turning Customer Information Into Customer Intimacy.
About LoyaltyOne – global leader on consumer insights & strategy, loyalty marketing and customer experience management. LoyaltyOne aims to transform the landscape of the Indian loyalty industry by creating value through customer centric marketing, retail analytics, customer lifecycle management, data privacy and usage.
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