Rethinking Loyalty and Customer Relationship Strategy

Traditionally, customer relationship strategies have fit inside the nice little box known as loyalty programs. You join these programs with steps you take to earn rewards, and then rewards you can redeem. In recent years, this box has gotten a little larger, with a few new bows as part of the packaging. Brands like Walgreens and Kimpton are rewarding customers for purchasing and non-purchasing activities. Northface and Nordstrom have experiential rewards tied tightly to their brands. Programs like Steelers Nation Unite and Panera Rewards have surprise & delight components.

 

Build a stronger, deeper relationship with customers by focusing on their success.

At rDialogue, we’re excited about the evolution. However, we think there’s a next step to take. We believe that customer relationship strategy should evolve outside the box altogether. We believe the most successful brands must blur the lines between loyalty and relationship marketing to simply become customer strategy, or as like to put it, customer centricity. It’s a big vision, but an attainable one. Disney is one brand acting on this vision today, with fluid, data-driven engagement (rather than programs) via its Magic Band that gives the customer a voice in their brand journey. To help you get started, we’ve outlined some steps you might take to redefine your customer marketing strategy.   

  • Step 1: Mobilize your organization around the mission of an enhanced customer strategy. Executive ownership and support is critical.

  • Step 2: Create a broader definition of “customer” for your brand, not just someone who buys or even opts in. Your most loyal customer may buy aggressively in one channel, but only look like an opt-in in another.

  • Step 3: Create a broader definition of customer value, beyond purchasing. A customer that buys two times a year may be more loyal and will purchase for more years than someone who bought four times in one year.

  • Step 4: Get smart about your customers through segmentation that goes beyond the typical spend, demographics, psychographic analysis, to include how they buy, how they think, feel, make decisions, and what they like beyond your brand.

  • Step 5: Build journey maps for those segments that lead to purchases, engagement, habit, commitment, and loyalty – to align with your growth objectives. Recognize that the path to loyalty isn’t a linear process, so give your journey maps room to wander, just like consumers are likely to do.

  • Step 6: Create a customer strategy with tactical marketing initiatives to act upon. Start at the beginning of the relationship. Branding and anonymous marketing begin the relationship. This leads to opt-in which enables nurture campaigns which, in turn, leads to relationship marketing and finally loyalty and brand advocacy.

 

Nurture the kind of loyalty that builds the customer relationship.

Traditional loyalty isn’t going away entirely, but it’s no longer the entire strategy for customer marketing. Loyalty programs are now just one among many tactics in creating a relationship with your customers. They should not detract from the customer experience, but rather must work toward enhancing it.

Looking ahead, we believe the line between loyalty and other marketing capabilities will blur, moving toward true, authentic customer marketing. Clearly, this new customer relationship strategy is more complex than a five-step program. But the tools, data and technology are there for us to move on this vision now, to meet the customers where they are in their journey, nurturing and recognizing loyalty from their perspective.