Part 3 – Operationalizing Stickiness…Loyalty’s Holy Grail
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We’ve learned in the earlier posts that if you’re continuing to invest in traditional loyalty programs, you’re spending money on outdated techniques and, worse yet, you may be losing more customers than you gain. We’ve also learned that consumers are more prone than ever to shop around. So, if the old way doesn’t work and new, elegant experiences only encourage shopping around, where do we go from here?
According to McKinsey, the key to success with today’s consumer is creating stickiness as they begin consideration, prior to each purchase. Translated this suggests that being relevant and consistent in key moments early in product or service consideration is what matters most.
Reading between the lines, the McKinsey study suggests that because improved shopability and the barrage of competing offers, loyalty can only be guaranteed in the moment. Therefore, seeing sticky customers with high purchase intent in real-time early in the process is critical to the loyalty marketer. Measuring stickiness, however, requires a different point of view and a new approach.
Most brands are stifled by silo’d transactional data that’s both hard to use and incomplete as it doesn’t reflect the mobile and location aspects of today’s consumer journey. Continuing with my experiences from the prior post, my engagement with the drive-thru of one of my favorite brands should be as relevant as using their new app. Unfortunately for both brands this is not the case, as the brands have decided that I can only be known and treated as loyal if I change my mind and decide to use the app.
In this situation, the brand has decided that the way they will know me is through their app. Unfortunately for the brand, the app isn’t a priority for me and as a result my usage, and what they know about me, drops off. In the end, the brand has to find different ways to connect with me…and the many others just like me. In the end, brands are missing this enormous opportunity to see and connect with customers across an ecosystem of engagement that sees everyone. I, in fact, have connected via the brands ecosystem on numerous occasions; I have used their kiosk, redeemed mobile coupons, I have used their WiFi and sometimes even the app. To connect this ecosystem, brands must embrace a new holistic digital-to-physical customer data approach that connects all channels and is enriched with both on & off site location. Then, enhancing this contemporary view of today’s consumer with a real-time engagement score is the key to operationalizing stickiness.
The connected ecosystem with real-time scoring enables brands to quantify and measure the effectiveness of key moments in the consideration to purchase journey and focus on customers whose frequency and intent is strongest. One example would be, favoriting a particular shoe on a web site and then visiting the store on several subsequent days would yield a high engagement score that the brand can instantly leverage when she later browses on her phone. Following this pattern, the more frequent the engagement, regardless of channel, the higher the score. When the engagement stops, the score would naturally decay suggesting the customer interest has subsided.
Seeing and acting in a connected ecosystem with a real-time engagement score yields a view into customer stickiness that is the key to driving revenue and massive ROI…which is the marketers Holy Grail.
With shopability being at an all time high and new approaches, like location, changing the traditional thinking about loyalty, it’s time for companies to rethink their approach to defining and maximizing the value of their customers. Without a course correction, investments in loyalty are likely to be wasted in the years ahead—diluting margins, draining profitability, driving less-than-expected growth, and decreasing customer value along the way.
For more on How Engagement Score can drive 800% ROI please visit us at www.engage.cx.
(Contributions from Peter Roesler @webmarketing007, Robert Wollen @RobertWollan of Accenture, Patricia Odell, Chief Marketer @chief_marketer and @McKinsey)