How Reliable Insights Lead to a Loyal Customer Base
We all crave human interaction, especially in times of COVID-19. Most activities are limited to home or online, which accounts for any sort of consumption too. But who doesn’t miss being recognized by your favorite barista and being greeted with “the regular?” You want people to know your favorite things, to be acknowledged. In today’s world, this applies to online just as much as to a physical store experience. Places that know your name are the ones that you’ll more likely feel loyal towards. And that is exactly what customer loyalty is: a feeling of allegiance as a reward for outstanding services and/or products.
Factors that influence customer loyalty are not all self-explanatory. They merge together from elements such as convenience (especially for physical stores), but also emotional aspects like brand perception, personal experiences or word-of-mouth- recommendation. Loyalty factors also differ among industries. Healthcare generally has a higher customer loyalty rate than retail, for example, as the element of trust is highly relevant in the health industry.
You’ve probably encountered the traditional ways of building loyalty: incentives (such as coupons and discounts). And while those are a great way to drive sales and introduce new products, they are lacking what’s in the deal for you: insights!
Insights are the most effective way to gain and retain real loyalty. Once you truly know your customers, building brand loyalty becomes a piece of cake! In this blog, we’ll go over strategies to build true customer loyalty with the help of insights. We see insights as the core element of customer centricity. How else can anyone provide outstanding customer experiences than by identifying what regulars desire before they have even articulated it?
How does customer loyalty help my business?
Loyal customers are your MVPs, and you need to make sure you understand and meet their needs. New customer acquisition is getting increasingly expensive. Meanwhile, 80% of your revenue derives from 20% of your customers. High customer retention means reduced acquisition cost, which should be your main goal in a cost-conscious environment. Identify your most profitable customers and nurture them. They are the key to increasing your revenue, as they are most likely already loyal towards your brand. Make those current customers the core audience of your marketing activities. Given a positive customer satisfaction, there is an increased chance of future brand loyalty, leading to follow-up purchases.
How does customer engagement influence customer loyalty?
Customer engagement is closely intertwined with customer loyalty. Customers are active on countless channels, from web to social media to mobile. How they want to interact with brands is their personal preference, and you need to be able to reach them wherever they are. Customer engagement is quantifiable with KPIs, such as Engagement Rate, RFM, RFE, or Customer Lifetime Value, but isn’t limited to those. It also takes into consideration word-of-mouth referrals or reviews.
Engaged customers are likely also your most loyal customers. They follow you on social media, are actively talking about your products offline and online, and happily endorse your services. Studies have shown that engaged customers are also less price sensitive than non-engaged customers. They are your keepers, and you need to make sure to reward them for it.
Implementing insight-led customer loyalty
We are going to dive into some hands-on tips on how to establish true customer loyalty that you can implement by analyzing your customers’ actions and understanding their needs. But let’s be practical for a moment… Where to begin when you are attempting to improve your customer loyalty? It seems like such a massive task with no clear starting point. You go back to what you already have, the data of your customer base. You have their contact information, and you’ve previously convinced them to buy from you.
Now it’s time to remove data silos, align your CRM with your marketing solution, and get that highly-desired 360-degree customer profile. You may need to invest in some tech to get this done. Setting up this base for future marketing activities will save you money in the long run. You will be able to create value from existing insights.
Wake up that customer base and increase loyalty with the following tips:
1. Gut-feeling is not enough, establish loyalty with insights
In order to improve your customer loyalty, you first need to be able to understand who your current customers are. You need to be able to recognize returning visitors and differentiate between them and first-time visitors. The GDPR and other privacy policies have not made this task any easier. However, there are still legal and easy ways to capture all of your data in a GDPR-compliant and effective matter.
2. Build a cost-effective loyalty program
Here’s where we need to talk about loyalty and reward programs. Many consumer-facing companies have some sort of customer loyalty programs in place, be it stamp cards or an online community. These programs create a sense of exclusivity and the desire to belong to a special “club.”
There are many ways to build a communal experience among “insiders.” When creating your loyalty program, make good use of your data to discover which services/advantages your customers would like to see in the program. It should not focus solely on up-selling, but rather create value for the members. Not all of your customers love discounts as a loyalty reward. Some will even react negatively to offerings of such kind.
Credible, authentic programs trump sales campaigns and discount codes. You want your loyal customers to communicate with each other, creating a sense of community. Add rewards for new customer referrals, birthday specials or raffles and analyze how the members utilize them.
While you’ll have benefitted from your insights when setting up your loyalty program, you will also expand your customer knowledge through the program itself. Combine loyalty program data with your other data sources and identify outspoken brand ambassadors.
3. Encourage feedback & recommendations
Personal recommendations are the gold standard of your business. A happy and returning customer will most likely recommend your services and/or products to their friends and family. However, the openness to feedback is hard to measure with statistics alone. Think about adding a “Net Promoter Score” or asking for feedback as part of the checkout process or in the post-purchase follow-up email. With Mapp Cloud, you are able to match this information to the specific customer profile, creating a vivid image of your most engaged and loyal customers.
4. Make insights part of customer service
Your customer data can work for you and will probably outperform many conventional customer service solutions. By creating user segments based on engagement rate, you will be able to identify the impact of your customer marketing. Sales values (cart size, order frequency, order value) should not be the only factors taken into account. All levels of engagement (time spent on site, page impressions, newsletter subscription and interaction) need to be included. Know what your customers want (even before they do) by analyzing their interaction with your content. Match feedback with the existing customer profiles to sharpen the image even further.
5. Personalize where you can
Even if you aren’t using it right now, you have plenty of information about your customers readily available. That probably includes contact data, preferred buying channel, preferred marketing channel, buying history, interest in discounts, just to name a few. Make sure to include as many known aspects into your marketing activities. Address your customers by their name, only offer items that are in stock, and let them know when new items are available that match their interests.
6. Let the customer be your marketing automation trigger
Always aim to reach your customer at the right time, on the right channel, with the right message. By creating automation workflows that are activated by your customers’ actions, you make sure communications are delivered in the ideal context. Mapp’s omni-channel marketing approach for email, mobile, web, and direct mail enables you to build a multi-channeled campaign flow that makes the most impact.
Need a partner to build insight-led loyalty?
All your efforts to improve customer loyalty with insights should be customer centric. And Mapp is here to help! Mapp Cloud’s “insight-led” approach combines data with artificial intelligence to generate actionable insights that let you connect with consumers along their journey with your brand and build true loyalty.
Want to find out more about improving customer loyalty through customer insights?
This article was first published by MAPP. Permission to use has been granted by the publisher.