“Loyalty is dead” stated a Forrester analyst at the 2015 Integrated Marketing Week.
No brand wants to hear those words, but the reality is consumers today are bombarded with so many loyalty programs, offers and cards that there is no distinguishing factor drawing them to one specific name. As discussed in this Mobile Commerce Daily article, with the wide use of digital and mobile, customers have instant access to deals, reviews and alternatives for making their purchases, where it has become simple for them to go to a competitor. This has far reaching consequences for brands as it is more costly to acquire new customers than it is to keep existing ones, and generally 20% of customers account for 80% of sales- ultimately affecting the bottom line.
So what can brands do to bring back the loyal customer?
What’s missing in all of this is the personal connection. Something that mom and pop shops do very well, whether it be through greeting regular customers by name or remembering just how they take their morning coffee. This was my experience at a cafe in my old neighbourhood and it kept me going back for years, without considering other options. Replicating the small shop feel would’ve previously been tough for bigger brands with multiple locations, but that’s no longer the case.
A customer’s smart phone is the gateway to connecting with them 1-1 and it can be a powerful tool for attaining brand loyalty and unlocking sales – when done right. But it has to go beyond having a cool app. Utility, convenience and a strong user experience are a must. For example, 76% of U.S. retailers fail to allow mobile redemption of their loyalty programs (2015 Capgemini Consulting report ‘Fixing the Cracks: Reinventing Loyalty Programs for the Digital Age’) which is unacceptable. The successful integration of mobile with the in-store experience is crucial for the future of commerce and some brands are clearly not responding quickly enough.
The brands that do think innovatively and act quickly have realized the benefits of adapting their marketing strategies to the changing behaviours of their customers, where mobile is a key force. Following are some results seen over a 6-month period by a retailer with multiple locations (Lucova.com client) who revamped their mobile program to adapt to their customer’s needs. This included incorporating hands free mobile payments, greeting a customer by their first name as they walked in and engaging customers through real-time offers in-store – all enabled by Bluetooth technology.
– Customer’s who carried out a mobile transaction were 3X more likely to return to the store and their average spend doubled
– When customer’s paid for a purchase using mobile, they used loyalty points 85% of the time
– 90% of customers who downloaded the brand’s app went onto create a personal profile which included uploading their picture and setting individual preferences
Technology works best when the human element remains a focus. Brands can attract those loyal customers again by offering a mobile program that delivers effectively on function, convenience and most importantly a seamless experience that puts the brand’s relationship with the customer at the forefront.
By: Shivanu Thiyagarajah, Director of Marketing at Lucova