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Get Creative With Customer Engagement and Loyalty!

By Jeanne Roué-Taylor

Just yesterday I was in one of my favorite stores, a nationally known co-op. The benefits of membership at this retailer are very straightforward—the more I spend, the more I can expect to receive back at the end of the year. I happened to get a manager as a cashier, and she suggested the store credit card and reminded me of the cash-back benefit of being a member. She was enthusiastic, so I thought I would try out a few suggestions on her. It went something like this:

Me: “Thanks, I’m already a member, but I have a couple of questions: Why don’t you have achievement levels and published milestones for members?”

Manager: “We want all of our shoppers to earn benefits on the first day.”

“Can’t they do that and still be rewarded at increasing levels for bringing more of their business to this brand?

“Yes, but wouldn’t that have to be paid for somehow, meaning the lower-status customers would suffer?”

“What if you could change the math? Wouldn’t rewarding higher purchase levels incent customers to bring more of their shopping to you, increase your average basket size, and also repay your cost of customer acquisition sooner with larger average business per customer?”

“I guess that could.”

“So let’s just play that out. What if status levels could give you another layer of segmentation of your market and an ability to test personalized messages? Wouldn’t that allow you to better engage your highest-spending customers, making them feel rewarded for their high level of loyalty?

“Yes. I can see where you’re going. What’s your name?”

This was one of many conversations I have had when I shop in the stores that aren’t getting creative with customer engagement and loyalty. I’m there for convenience and because I like their offerings, but they’re missing the big picture with me (and losing a chunk of business to other retailers). There is a world of opportunity for brands to not only know their loyal shoppers well, but to use creative ways to tease out the many natural segments within their customer base.

Those segments provide a remarkable platform to test and learn the best ways to build a 21st-century business. Besides, chances are your competition is headed that way.

Creative engagement requires advanced analytics. Learn what you need to know in this webinar co-presented by TIBCO Loyalty Lab and TIBCO Spotfire.

Customer Loyalty Marketing Is Not New, But It Sure Has Changed

By Jeanne Roué-Taylor

It would be easy to think that today’s customer loyalty programs are a recent creation of marketers and advertisers, but they’re actually not. The history of customer loyalty marketing goes back quite far. As far back as the 18th century, merchants have been giving out incremental rewards for repeat business that allowed customers to redeem tokens for merchandise or discounts.

Railroads used the same loyalty concepts in the 19th century to get passengers to increase their spend on a particular brand. There have also been various third-party programs, like S&H Green Stamps, that created a “brand” for loyalty itself. We’ve known for hundreds of years that there’s a big payoff for getting customers to come back and spend more.

And Then Came Digital Data

Computerization didn’t initially change customer loyalty programs, nor did the arrival of the Internet. The ability to sign up, check balances online, and communicate with customers became automated, but the basic premises didn’t change. Points for transactions still reigned.

The arrival of the digital revolution in marketing, however, changes everything. Today’s marketer is far more likely to be a tech-savvy, digitally-fed business analyst than ever before, and that is greatly evolving what can be done in customer loyalty marketing. Rather than simply set up a points program, today’s marketer creates unique opportunities for customers to interact with the brand in ways that are ultimately valuable to both sides (and we can instantly measure just how much).

Test and Learn Constantly

Digital marketing opened a world of data-driven “test and learn” that will drive more change to customer loyalty in the coming five years than the last centuries combined. And it isn’t going to stop there. Marketers with powerful data integration platforms constantly reinvent what customer loyalty can be with ever-changing sources of data and ways of putting it to use discreetly or in powerful combinations. The race is on for each marketer to be connected and digitally fluent.

A digital world is a whole new frontier for customer loyalty marketing.

Learn about how integration and analytics are informing customer loyalty in this whitepaper from TIBCO Loyalty Lab.

 

 

Customer Loyalty in a Real-Time, Noisy World

We’re reaching a point of saturation where the noise of the connected world can easily outweigh the value of listening. As social media use continues to increase alongside constant connectivity, the voices that matter most to us—the voices we’re loyal to—end up being the only voices we can hear.

The Saturation Point

When consumers hit the saturation point, they’re highly likely to take a step back from the marketing chaos and ask themselves “What matters most?” and “How can I escape the chaos?” They’re likely to limit their focus to the things and places they hold dear. This is exactly where brand loyalty matters more than ever.

The world won’t get any quieter. To make sure they’re heard, a brand needs to make up for increasing noise with better customer engagement that leads to greater loyalty. When a brand is in a trusted relationship with its customers, it knows its customers far better and offers a respite from the need to filter out the irrelevant. It offers peace from the dark aspects of constant connectivity.

Brands and Noise Filters

When a brand engages loyal customers wisely, it offers a noise filter and creates an appreciation from the customer; that leads to brand advocacy. Strong customer appreciation—strong enough to create advocacy—is a hallmark of the brands that enjoy much higher lifetime customer value and powerful networking benefits as their customers are more than willing to vouch for the brand and introduce others to its benefits.

A focus on customer loyalty is an excellent strategy for a real-time, noisy world.

For more on how to cut through the chaos in 2014, check out this TIBCO Loyalty Lab webinar, Top 10 Marketing Trends for 2014.

An End to Pre-Holiday Shouting?

by Jeanne Roué-Taylor

I am a proud survivor of Black Friday 2013. It was the most impersonal, poorly thought through and aggressive Black Friday I’ve experienced yet.

When I say survived, I’m not referring to the competition for parking spaces, the crush of shoppers or the tough decisions of which bargain would be worth fighting for. I’m not a survivor of the long register lines. No, instead I survived the onslaught of impersonal Black Friday emails that filled every inbox of each email account I maintain.

Black Friday Specials End Tonight!

Sending an email is considered a relatively cheap form of marketing, which is why so many brands blast indiscriminately in an ever-louder effort to get our attention, killing their own effectiveness in the process. As the noise gets louder, what will be the plan for Black Friday 2014? Even more of the same?

I have a crazy idea: What if, as a marketer, instead of spamming every email in my database, I chose to put a focus on segmentation? What if I used that segmentation to define my playing field for interaction with customers so that I could then look at each homogeneous segment’s propensity to respond to interaction at different times, for different reasons, and across differing channels? What if, to cap it off, I created a culture of testing and learning what a sample of each segment actually does when I interact? What if I used those lessons to constantly improve my marketing effectiveness?

Analytics and Actionable Models

Why, then I would have an analytics platform with actionable models that a smart marketer could use to steadily increase the effectiveness of offers and build brand loyalty. I could distinguish myself from the crowd and build a base of loyal customers that know I respect their time and attention.

I could stop shouting and start engaging.

Learn how to lay the foundation for a successful customer loyalty initiative in the whitepaper, 8 Essential Steps: Championing Your Investment in Loyalty Marketing.

Loyalty Lab’s David Rosen Talks The Four Pillars

by Jeanne Roué-Taylor

Marketing is going through a time of significant change as it embraces a new form of customer loyalty driven by right-time marketing. Few people tell the story better than our own David Rosen. Rosen is particularly good at articulating how today’s marketers are evolving into digitally focused, tech-savvy pros with powerful technology tools and techniques at their disposal.

He understands that changes in marketing are driven by the broader changes in technology and consumer behavior over the past decade, like the fast adoption of social media and increasing dependence on mobile devices.

The Retail Struggle

Retailers have struggled to find the right ways to interact with existing or potential new customers as they learn the new paradigm. Most understand that relevance, timing, and context determine the right time to engage, but finding the right mix of technology and technique is elusive without guiding principles to provide focus for retail loyalty.

Rosen has an answer to that challenge.

The Four Pillars

Rosen is an advocate for the Four Pillars concept, a concept that combines customer-driven relationships, loyalty programs, wider event streams, and test and learn. His work with Virgin America and The North Face provide his evidence that it takes a philosophy to navigate times of significant change. Breaking down the concept looks like this:

Customer-driven relationships – Marketers have a role in how and where to engage, but customers’ preferences, motivations, and attitudes ultimately drive success.

Loyalty programs – Loyalty programs have an important role to play in giving customers an opportunity to raise their hand and provide permissioning for loyalty data to be collected.

Wider event streams – Transactions aren’t enough to know a customer. Brands need to monitor data that streams continuously across social media networks, mobile phones and other software and devices.

Test and learn – It all comes together when a brand can develop strategies to be tested with groups of consumers to find what’s the most effective message, timing, and channel for engagement.

The Four Pillars are a great answer to the challenge of navigating marketing’s changes. Listen to the webinar or download Rosen’s whitepaper on event-driven marketing to learn more.

Everyone Shops for a Different Reason

By Jeanne Roué-Taylor

Customers are rarely a homogenous group. They differ greatly in revenue potential, levels of loyalty, and frequency of contact. What makes loyalty work, therefore, is an ability to segment your customers using powerful analytics. Segmentation allows the right amount of effort and right offers to be applied in the right moments to the right customers.

Knowing enough to segment properly takes powerful analytics. Unless analytics are a key part of your loyalty platform, odds are you won’t be able to do much more than old-fashioned transactional loyalty.

But segmentation isn’t such a simple thing. There are common segments based on how people shop—like price or convenience—but below those broad categories, there are more subtle ways to segment based on what is required to engage a customer in the right moment with the right offer. This is the description of behavioral segmentation, and takes a capability to test and learn that wasn’t available until recent times.

Test and Learn

Test and learn provides a way to find segments that may not otherwise be visible to marketers. By choosing existing segments and testing offers on a smaller scale, new segments can be developed and marketed to in a larger way. The opportunity to test and learn is a benefit of a customer loyalty platform that includes powerful visual analytics.

In the end, everyone shops for a different reason. Marketers armed with the tools to not just segment along traditional lines of age, race, and other factors—but also to test and learn—have a distinct advantage over those who don’t.

 

To Supply and Demand, Add Context and Timing

By Jeanne Roué Taylor

We’ve spent most of our lives hearing about the law of supply and demand. Brands create supply through manufacturing and the building out of service capabilities. Through marketing, quality, and some amount of skill and good fortune, our customers demand our products. Can this well-tested, age-old law survive our times? Yes, but only if it adds two more components: context and timing.

A real-time marketing system does exactly that. The new supply chain is about more than goods and transactions—it is also about relevant marketing that takes into account the subtleties of what’s happening in the customer’s world.

Thanks to fundamental shifts in technology, the new laws look something like this:

Supply – What is my current inventory level? What inventory is stressed because of low sell-through or seasonality? Where are my services overstaffed? From where can I fulfill an order that makes the most sense cost- and timing-wise? Where should I stage my inventory for most efficient sell-through?

Demand – What are my hottest items that shouldn’t be discounted? What is the market talking about, and where can I join the conversation? What can I do to better capture the interest of my customer as both an individual and a refined segment of all of my customers?

Context – What are my customer’s buying patterns: When do they shop, how do they shop, and where do they make their buying decisions? What do their patterns reveal about what they’re most likely to buy next? Where is my customer at this moment? What are the ambient circumstances, like weather, seasonality, location (in store, near store, on web or mobile) that help answer the question, “Customer, what’s going on in your world, right now?”

Timing – When is my customer most likely to be receptive to communication? Do I understand their preferences, including means of communication and timing? Can I reach my customer at the right moment with the most relevant information? Real-time must be right-time marketing.

For marketers who were previously disconnected from the supply chain world, the new laws represent an opportunity to play a much bigger role in moving the brand’s needle. The new world of retail is far more mobile, far more contextual, and far more personal, making it a much more dynamic environment for doing business.

 

Customer Loyalty Is The New Customer Service

By Jeanne Roué Taylor

In a recent post, 3 Reasons Loyalty Programs Aren’t Optional, I pointed out why loyalty programs are a critical part of customer engagement. A sudden surge in tablets and smartphones, the phenomena of Big Data, and the need for customer permission to avoid creepiness were reasons every brand needs to have a loyalty program.

But the reasons go even deeper than technology and privacy. In today’s climate of increasing choice, customer loyalty takes on many of the traditional aspects of customer service. By knowing your customer’s history, preferred channels of communication, current context and—most importantly—your service options, the chance of turning around a bad situation or delighting your customer are significantly improved (learn more in this whitepaper).

Sounds Good, But How?

Understanding your customer’s history, preferences and current context is the job of a loyalty platform for a loyalty program, but taking on the customer service opportunity requires the same knowledge of the customer. By studying customer responses with a test-and-learn approach, customer service based on customer loyalty data allows for segmentation and can be improved upon just like customer loyalty programs. It’s a win-win.

Customer service today is an opportunity to create customer loyalty in new ways and with far better results than in the past. And the best part? It is a by-product of having an excellent customer loyalty platform…and the tools are already available.

Customer Engagement Requires Knowing Your Crowd

By Jeanne Roué Taylor

How well do you know your customers? While most brands would say they know their ideal shopper, how many can break down their customer engagement into finely tuned segments based on analytics? Some can, but too many are still behind the curve when it comes to having the loyalty platform to gather data, visualize and discover patterns of people and behaviors, and respond with the right engagement at the right time. Having a high level of customer intimacy enables right-time marketing and it’s within reach of most businesses (learn about right-time marketing in this whitepaper). We’ve entered a data-rich age where there are fewer and fewer excuses for not knowing your customer crowd.

How to Know Your Crowd

For starters, every customer has unique attributes that we refer to as their characteristics. That set of information includes permanent things like gender and age, but also includes things like past history of interaction and purchases that paint a clearer picture than simple demographics. While age, gender, affluence, and other factors give us broad stroke indicators of buying propensity, finely tuned segmentation requires a richer set of information than traditional groupings.

The second aspect of knowing your crowd is tightly coupled to how your customers communicate with you, which we refer to as channel. These are the pathways of interaction preferred by your audience, and getting the channel right is the difference between having a seamless conversation and being intrusive. Brands that can’t listen and respond across the many, sometimes simultaneous, channels of today’s marketing can’t say they truly know their customer.

The third aspect of knowing your customer is having a context for each moment of interaction. Knowing whether a customer is currently in the act of shopping, at the time of purchase, or just in the information-gathering phase has a strong effect on what interactions are most appropriate and what the timing should be for engagement.

Characteristics, channel and context together are what define truly knowing your customer crowd. Without them, your ability to increase intimacy, gain loyalty, and increase total lifetime value are negatively impacted.

Watch the webinar on right time marketing and learn how to use characteristics, channel and context to determine the best time to market.

There Are Two Kinds of Loyalty

By Jeanne Roué Taylor

There’s an enormous amount of buzz in the marketplace around loyalty. But how many of the conversations make the distinction between the two kinds: one of them that’s good for the moment and the other that’s good for the long haul? Knowing the difference has a real impact on how a brand designs, implements, and maintains its customer loyalty program.

Loyalty of Convenience

In a recent blog, Seth Godin referred to the first type as the loyalty of convenience:

“I’m going to look around, sure, but probably won’t switch. Switching is risky, it’s time consuming. Switching means a new account manager or moving my software or reprinting something. Switching means I might make a mistake or lose my miles or have to defend a new decision.”

Loyalty of convenience is only as good as the near-term incentives. It is a loyalty that requires steady, non-stop investment or it breaks and loses its accumulated value. A customer stays loyal only as long as the convenience lasts.

Enduring Loyalty

Enduring loyalty is the kind that comes from relationships, not cash rewards or convenience. In the world of enduring loyalty, customers stay engaged because they feel a connection to the brand. Seth Godin refers to this type of loyalty as, “I’m not even looking.”

A loyal customer who isn’t looking doesn’t care if there’s a lower price or competing product somewhere else. Because they’re invested in the brand, it takes more than just a pretty price to turn their head.

Learn more about what it takes to create enduring loyalty in this whitepaper on Customer Loyalty Management.