Build Customer Loyalty From That First Touch Point

Technology is often discussed among loyalty marketers as an integral way to magnify customer engagement, customer experience, and customer loyalty. But, technology can also have a counter-productive effect.

Loyalty360 caught up with Kristin Luck, who is an adviser at Virtual Incentives, to learn more about her views in this and other areas connected to customer loyalty.

Technology is such a critical, yet rapidly moving piece of today’s customer loyalty puzzle. It’s often challenging for brands to stay on top of all of this, yet it is crucial for their respective loyalty programs/customer experience initiatives. Can you talk about how you view the future of technology from a customer engagement perspective and how loyalty marketers can best keep pace with all of these innovative developments?

Luck: For all of its benefits, I think unfortunately technology has also served to distance us from our consumers. Think about customer satisfaction surveys, for instance. We used to interview consumers face-to-face or over the phone; there was always a human touch point. Now, these surveys are conducted almost exclusively online or via text message. That human interaction is gone. It’s a good thing that, as an industry, we’re more efficient and more responsive, but it’s a bad thing that we’re less connected to the consumer. We need to be better about identifying methods and solutions that keep engagement paramount throughout the consumer lifecycle- focusing on building loyalty from the moment of that first touch point.  

It’s challenging to stay on top of marketing technology because there is nearly constant innovation. The amount of development and new product news can be overwhelming. What works for me is to commit to reading industry news on a daily basis and investigating trends and new tech platforms that appear to be truly innovative. The key is to make sure you have your customer engagement strategy dialed in so that, rather than getting distracted by every new shiny tech platform, you can objectively look at the new tech that crosses your desk and quickly decide “will this help me deliver or will it likely be a distraction”?

Data has been such a huge element in customer loyalty in recent years, in particular, yet many brands we talk to on a regular basis still struggle with how to best leverage it so it can be used to help personalize ongoing communications with customers. What is your advice for loyalty marketers in this respect?

Luck: The challenge with having access to so much data is that it’s easy to get distracted and lose sight of the metrics that are vital. Figure out which data you have access to, define what’s important and then track those metrics diligently.

That said, although I’m a big fan of KPI dashboards to ensure alignment throughout an organization (I use Cyfe to manage), I’d really encourage others not to rely solely on KPIs. Much of the juicy, meaty data that drives personalization and engagement comes from taking a deep dive into consumer behaviors and preferences.  If you don’t have someone data savvy on your team, make it a hiring priority for 2017.

Speaking of personalization, this has been talked about for years but is something that hasn’t been implemented widely by brands. What challenges remain for marketers when it comes to personalization?

Luck: In research recently conducted by Virtual Incentives, 57% of consumers stated that brand affinity improved when reward communications were personalized to create relevancy. And 82% said a company offering them their preferred incentive would make them more loyal to that company in the future.
Personalization helps you cut through marketing clutter and grab attention, plus creates an opportunity for a deeper interaction with your consumer. But there’s a fine line between personalization that is welcome and personalization that is creepy: That’s the challenge.

When it comes to personalization, knowing your consumer (via primary research and data mining) and delivering messaging that’s relevant to them plays a big role in ensuring your marketing is well received.

There has been considerable talk related to fintech this past year, including the point that payments will play a large role in fintech innovation. What are your thoughts on fintech, its future, and potential trends related to it?

Luck: Digital payments are in increasing demand, particularly among millennials and markets that have been historically underserved by traditional banks. Look at firms like Bank Mobile, targeting millennials, or M-Pesa which filled a big banking gap in Kenya, or startups like Support Pay which developed an app designed to streamline child support payments.

The refugee crisis also presents an enormous opportunity (and challenge) for the fintech community. There are more 60 million refugees worldwide. Refugees typically can’t get bank accounts. They often don’t have valid ID and banks often won't give them accounts because they’re too poor. Refugees who can’t access banking services lack any sort of financial security. During SIBOS 2015 in Singapore, there was a co-creation session about the refugee crisis (as part of a series on financial inclusion) during which the goal of creating a Refugee Bank was launched- a digital bank for all refugees to bring financial inclusion to refugees.

This is the fintech industry I’m really excited about: Finance savvy entrepreneurs that are creating solutions that can solve not just business finance problems but social finance problems.

Most fintech startups fail because of risk and regulation considerations, credit and business cycles, and cost of customer acquisition. Do you think more fintech startups will succeed or fail in the future?

Luck: Fintech firms are only getting savvier about working within regulatory environments so I don’t see that being a real barrier for firms in the future. I also think customer needs are changing and, as a result, fintech firms are adapting much more quickly than traditional banks.

For instance, millennials are more credit adverse and as a result, traditional credit scores aren’t always useful, which creates a great opportunity for fintech firms. Take, for example, Social Finance, which created its own proprietary underwriting score in place of FICO that it uses to evaluate applications for its student loan, personal loan, and mortgage products.

Overall, I see more fintech startups succeeding as they learn from the failures of their peers and as consumers grow more comfortable with online and mobile payments and less reliant on traditional banking.

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