Customers’ relationships with brands have forever changed as a result of the COVID-19 pandemic.
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A new Forrester report demonstrates that changing buying habits caused by availability issues in 2020 have made consumers more comfortable with trying out new brands. As a result, it’s more important than ever that marketers understand how critical building and retaining customer loyalty is in modern business.
Loyalty, And Loyalty Programs, Have Evolved
Building an emotional connection with your brand is the first step in stimulating behaviours that matter, according to Forrester. That connection is no longer limited to loyalty schemes, which have themselves evolved beyond simple rewards for purchases. Indeed, some of the global brands with the strongest loyalty from their customers have never operated a loyalty scheme – Forrester cites Apple as the clearest example.
Engaging emotion is where the foundations of brand loyalty lie. Marketers must understand the emotional connection a customer has with their brand if they’re to capitalise on it.
As Forrester illustrates, rather than straightforward accumulation of points for spending on more products, loyalty scheme rewards are increasingly experiential in nature. Know what your customers want, then tailor loyalty schemes and rewards accordingly.
Customers Expect Brands To Share Their Values
Increasing brand-value awareness has meant that consumers are much more likely to purchase from brands that they believe share their own values. Forrester points out that 60% of online adults in the United States consider at least one of four key factors when making a buying decision: brand reputation, values, environmental impact and social impact.
Furthermore, once they find a brand they feel shares their values, they remain loyal to it. In the same survey, 75% of adults who are members of a loyalty program and regularly purchase from brands whose values they share said they spend more money at those companies.
The opposite is also true. Forrester reports that empowered customers will look elsewhere if a brand doesn’t meet their needs. Looking for enhanced customer experience, consumers are turning in larger numbers to brands that position themselves as partners.
‘Understanding how consumers feel about your brand, its products, and its values is critical to attracting and retaining them. The bonus? Values-driven consumers are more loyal, too – they spend more with brands that align with their personal value.’
‘They can do so by defining the value of their CRM and introducing strategic initiatives as well as precise execution and optimisation techniques.’
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Build Communities, Make Customers Feel Special
A personalised experience doesn’t need to be expensive from the marketer’s point of view, but can make a big difference. Small touches that make customers feel remembered and appreciated do not go unnoticed. As an example, Forrester cites a US coffee shop chain that realised their baristas recognised regular customers, and so afforded them the freedom to choose when to offer a complimentary coffee. As a result, the employees themselves played a role in building a sense of community between brand and consumer.
With 68% of loyalty program customers wanting offers that aren’t available to other customers, the importance clients place on such apparently ‘special’ treatment is clear. Make your customers feel like they’re part of a special club and reap the benefits of their resulting loyalty.
Measure Emotional Loyalty To Learn How To Use It
Forrester warns that, while measuring program-based loyalty is simple, measuring emotional loyalty in an increasingly digital world is considerably more complicated. New tools are emerging, however.
While post-transaction surveys are a good starting point, they only measure sentiment at a given moment. Frequent, short surveys are a better bet, combined with text analytics tools to assess how customers are feeling in online forums or chat groups.
Some loyalty vendors are going further still, with Jakala’s Experience Lab testing responses to offers, creative campaigns, user interfaces and brand messaging. Forrester’s advice is to build a clear picture of customer behaviour, if you intend to influence it. Give the customer a voice and analyse how they’re using it, and use the data to build what Forrester calls a ‘baseline metric of emotional loyalty’.
With 15 years of deep technological expertise behind us, redk has the know-how and insight to enhance customer satisfaction while increasing engagement. Talk to us about CRM Transformation, Marketing Automation or any of our services, and learn more about our tangible business outcomes.
CRM Transformation Practice at redk
Hideki applies over 15 years of experience in the field of CRM and Customer Experience to overcome business challenges in the customer cycle.