Loyalty Is Not Dead, It Must Be Earned
By Joe Skorupa
Building a framework that consistently delivers the services and shopping experiences required to produce customer loyalty (with or without a traditional loyalty program) is one of the biggest challenges facing retailers today. Competition for the shopper’s time, attention and wallet share is intense. Here's how leading retailers are playing and winning the loyalty game.
In the Custom Research report “Winning the Loyalty Game” we uncover strategies and tactics that show how retailers are achieving loyalty and long-term customer engagement, the steps they are taking and the sales lift they expect to achieve.
Today, in the hyper-competitive retail marketplace, loyalty refers to long-term customer engagement and it is crucial to success. In fact, without it the only things a retailer has to offer are products, pricing and marketing, which is exactly what every other retailer has to offer. Earning and maintaining loyalty is the key to creating differentiation from competitors, a stable customer base, and enduring success.
But haven’t we been told that loyalty is dead in the omnichannel world? Weren’t millennials born without the loyalty gene? These are myths that are ripe for debunking. Let’s start with the fact that many retailers today don’t deserve loyalty because they continue to use methods of the past. And even more importantly, there are numerous examples of super successful retailers who inspire devoted shoppers to return again and again, such as Amazon, Starbucks, Apple Stores, Nordstrom, GameStop, Nike Stores, Lululemon and Chico’s FAS.
Key findings from the study:
· The good news is that the overwhelming majority (88%) of retailers recognize that long-term loyalty is essential to success and it can only be achieved by gaining a better understanding of customers.
· The problem is that retailers don’t have the ability or tools necessary to execute campaigns to actually produce loyalty and long-term engagement. Less than a fifth (18%) have the ability and tools in place today.
· On a positive note, two fifths (41%) say they will have them in place within 12 months.
· What data sources do retailers use? At the top of the list are web analytics (74%) and social media (71%).
· The most important finding in the study is that nearly half of retailers (47%) believe the lift to sales will be greater than 10% if they could effectively execute successful loyalty and engagement programs today using up-to-date tools.
· The top strategic deployment priority for improving loyalty and customer engagement is improving relevancy to shoppers with targeted offers (65%).
· The next planned major loyalty or customer engagement project is to improve predictive analytics (36%).
· The marketing department is the primary owner of loyalty and customer engagement responsibilities, principally the chief marketing officer (43%) and vice president of marketing (27%).
Building and maintaining loyalty is a non-stop process that requires continuous monitoring and improvement. Without active, effective and relevant engagement with customers loyalty slowly fades and the retailer becomes just another name in a mall directory or a Google search page.
Click here to download the complete report with a full set of charts and analysis.