Have you ever asked your business leaders specifically what they mean by loyalty? What their vision of it is? Or whether improving loyalty will affect the business?
Getting into the detail of what loyalty means to them is such a critical part for you in being able to deliver a loyalty strategy but is something that is often overlooked.
If a loyalty strategy is your aim but different business functions are describing loyalty differently, you won’t meet the brief. If you are all measuring loyalty differently, you’ll never agree on success. If you lack clarity on what behaviors you are looking for, how can you hope to create the right conditions to positively affect these?
In this post, we aim to answer these thought-provoking questions.
More from PostFunnel on the Loyalty Series
Chapter 1: What Is Loyalty and How Do You Recognize It?
Chapter 2: What You Need and What You Don’t to Build Loyalty
Chapter 3: Measuring Loyalty – What Are the Important Metrics and How Do We Find Them?
Chapter 4: Is Personalization Relevant in Loyalty Marketing?
Chapter 5: Rewarding Loyalty to Drive Growth
Chapter 6: The Relation Between Loyalty and Technology
Getting your business aligned
First and foremost, it is important to get aligned. Your board level directors need to be talking about the same kind of loyalty that you are aiming for as a loyalty manager. Then turn your attention to your colleagues across the business and agree on the activities that are loyalty driving and which are sales driving – as you’re going to need both, but they shouldn’t be confused.
Work together to deliver growth by designing experiences that have your customer and their satisfaction in mind rather than chasing the golden bullet promotion to get a sale from anyone who might give you one.
It’s more than likely that your board will want increased sales at a lower cost (don’t we all?) And, the rest of your business will consider that loyalty is how you achieve that. So, what they actually have in their mind when they think loyalty is an increased retention rate from your lower cost marketing channels and existing customers.
It’s unlikely that they have even thought about factors such as brand consideration, engagement, reward, and relevance. And of course, the part they play in achieving those sales and that retention rate. The cultural shift you need to enable your loyalty strategy is for everyone in the business to understand that they have a role in it and what that is.
Addressing the misconceptions of loyalty
It is imperative to address misconceptions and educate your business about the difference between retention and loyalty. Give examples where there is risk of eroding loyalty by chasing sales, discounting, and over-using incentives to the wrong customers. Explain how well intended actions can be frustrating for customers due to poor targeting and understanding of customer behavior.
For instance, all your efforts can be wasted by a promotion that discounts the things that your best customers bought yesterday. A checkout change that results in people not being able to log in and place their order can make choosing your brand too much effort. The delivery change that hits hard on your most regular shoppers can drive down value growth. And a product listing change that removes a brand that some customers are highly loyal to, can drive them to your competitor.
Remember, it doesn’t stop at the order. An after sales complaint that is poorly handled has the potential to damage any hope of future purchase and referral. Ask yourself how many times your best customers will allow you to get these things wrong before they choose someone else or give up as it’s simply not worth their time.
The reason all this is cultural change is because you need other teams to be as convinced of the value of loyalty as you are. As a loyalty manager, you can influence but can’t control the entire customer journey. Start recruiting allies from all areas of the business who see the opportunity that you do and nurture those relationships in the strategies for their departments.
Measuring loyalty
Don’t forget the metrics. It is well worth your time ensuring that all departments have the same view on what success looks like. How you measure loyalty and your metrics must be consistently reported across the organization. Spend time with these teams to work through this so that you have the eyes of the business on these metrics which will determine your future success.
Secondly, you need to be technology ready. Whatever you are setting out to do needs to be supported with the right technology. You’ll need data to be democratized and consistent. Your teams will need to be able to access that data so that they can use it. And finally, your chosen technology needs to allow you to scale what you are doing in a way that makes life easier for the teams.
Without this in place, you are likely to break the morale of your teams with the demands of manual targeting and personalization and you will constantly struggle to win over the hearts and minds of your teams about the benefit of doing it.
Making customer loyalty a core value
Once the what and why of your strategy is agreed upon, it’s then about turning attention to the changes needed to make this happen. If you’re serious about being customer-centric, it brings change of huge proportion to organizational structure and team approach. This type of change management will be no easy undertaking for a marketing manager who is expected to do the day job as well. For this reason, the organizations who are most successful at this, have sponsorship at a senior level.
Making customer and loyalty a core value for the brand is a necessary step. Make it so deeply rooted in how your business operates and functions that it is second nature to everyone and everything in it.
Once you commit to that, everything you do, develop, make, sell, and invest in needs to be designed with the customer and their needs in mind. Most marketing teams will be structured by channel, so you might want to have recruited and trained specialists as targeted on driving performance in those channels.
In truth, however, this results in a tug of war over the same customers and conversion opportunities. This approach cannot serve your customer at all. What customer do you know who ever expressed their loyalty and affinity to the channel of paid advertising? Customers love brands and they respond when that brand speaks to them. By designing experiences around customer rather than channel it’s possible to get a more continuous and consistent conversation established which would be better received by the customer.
Making the change
Aim for organization evolution rather than revolution as it is jobs that are being affected here. You don’t have to change everything overnight, but you should start to identify changes. The strength of your marketing is in the sum of the parts. Use the insight and technology you have to deliver the right message in the best channels for each customer group.
You want your marketing to be noticed but efficient so place it where your customer is taking notice rather than in every channel you can. This requires all your marketing teams to plan what will be said, where, when and to whom. Sounds simple, but that collaborative approach is rarely taken.
Once you are planning in this way, move your teams away from a day to day, week to week, campaign and begin to focus on customer performance and lifetime value. It matters less about the percentage of those who are seeing your advertising and more about whether it’s being seen by the people you had intended, which is something the teams will need to get used to.
As a business what you are then focused on is delivering growth across multiple metrics. This will be a combined effect that drives growth through positive experiences. It nurtures loyalty from your existing customers because you have designed your campaign with them in mind.
