This Week In Loyalty

Historically, loyalty has been the “get more” industry, offering customers a reward for purchases – more purchases generate more discounts, points or other rewards. All the effort has focused on motivating a purchase, and on the person making the purchase.

Loyalty 2.0 acknowledges the importance of the purchase transaction to the business, but sees it as having become commoditized from a consumer standpoint. It brings new consumer touchpoints to marketers’ attention. There are obvious ones – e.g., company website, blog, twitter, facebook or linked-in pages and meetup/other groups, as well as company-sponsored customer panels (whether for research, new product development, or other purposes).  What’s new on this front is the opportunity is to differentiate between visitors who leave a trail (register, set up a wish list, write a review, ask for help, or purchase), and those who don’t.

In addition to the company’s own properties, there are venues online and online-enabled offline popup venues that are not controlled by the company or the brand, where customers congregate, compare notes and swap stories. Review sites like Yelp and TripAdvisor, enthusiast communities like DavesGarden.com or Photo.net, YouTube, blogs and meetup groups galore, and other discussions initiated by happy or disgruntled customers or employees are all venues where the real, unfiltered conversation takes place. The opportunity for marketers is to capture and act on these insights cost effectively by listening to these conversations and turn them into value-adding (or at least perception-enhancing) consumer touches. Marketers ignore these new touchpoints at their own risk.

Loyalty 2.0 also introduces an expanded set of targets. Maritz has discovered brand advocates with a high share of voice may not be customers at all. They can be users who did not buy for themselves (e.g., gift recipients), or potential customers who are at the consideration stage. They can also be admirers whose evangelism is based on an appreciation for the company’s product or its social values as with Apple’s design aesthetic or Patagonia’s emphasis on reuse and sustainability.

Optimizing the level and quality of consumer engagement across an expanded set of actions and touchpoints for this broader definition of who matters requires new models and new tools. Maritz, LoyaltyLab, and BzzAgent, among others, are leading the development of the next generation of models and tools to allow brands the means for meaningful consumer engagement in a Loyalty 2.0 world.  Whether through business model innovations that create stickiness, sticky new tools or applications, or other means, the stakes are high as first movers experiment with insinuating themselves into consumers’ lives online and off in ways that lock out their competition.

The message to CMO’s from is clear: In the new world of frugality, where conspicuous consumption is “out,” marketers need to move beyond consumption-based card programs to create and sustain profitable customer relationships.

By Judy Hopelain
Strategic Marketer
Brand Amplitude
http://www.retailhitsandmisses.com