Customer Loyalty Program and Marketing Plan Strategy – 2015

How can corporate executives be this wrong about customer loyalty?

I did a presentation a few weeks ago, and one of the stats I used made reference to the enormous disconnect between corporate executives and the customer experience as it relates to their brand.  As we talk about Customer and Loyalty your marketing plan must consider not only technology, but also customer satisfaction, customer communications, and satisfaction.

Michael Hinshaw, author of “Smart Customers, Stupid Companies,” wrote that there is a large disconnect among companies between what they are delivering and what their customers are actually consuming.  His data showed that corporate executives believe that 77% of their customer engagements have been favorable customer experiences, whereas only 3% of consumers believe that the experience they’ve had with a brand was favorable.

It truly makes you wonder how the disconnect can be so big. Are the corporate guys just looking the other way? In some cases, they probably are, and in others they just aren’t looking in the first place. Revenue might be even in a good place. The fact that a good customer experience could lead to double revenue is often over looked.

As competition becomes more intense and product and services become highly commoditized, getting it wrong can mean millions in revenue. We look at our own stats and know that a customer who sticks around for year two on a program spends twice as much as they did the year before. No one can actually afford to churn more than 30%. We often see our customer have churns rates of 50-100%.

There are a lot of contributing factors; however, the corporate executives creating programs and services which they feel will benefit the customer or that will benefit their bottom line and not necessarily solve a customer issue is a contributing factor. If the customer doesn’t perceive value, then there is no value.   If the program is too complicated, the customers won’t use it. Going back to the basics of your loyalty marketing plan will keep your focus on track. Your customer loyalty program should be well defined, tested, and simple.

how to keep customer happy dbg loyalty

If you find yourself tasked with how to decrease churn or even creating a new program, there a couple of planning tips that will save you a lot of grief in the long run. No one wants to go through a year of planning and a couple hundred thousand dollars or more to fail.  Your marketing plan must be a key component of your strategy.

  1. Set the goals and deliverables for you program.
  2. Determine your budget.
  3. Set financial goals and deadlines for program.
  4. If you have an existing program, document your base line stats.
  5. Test and Survey.
  6. Know your demographic – age, geography, sex, preference and buying patterns.
  7. Know the device of choice — you cannot ignore the social and mobile experience.
  8. Spend 30% of your time developing the customer communication plan.
  9. Make sure you have budget to support your communication plan.
  10. Allow customers the venue for easily providing feedback.
  11. Set up a Google Alerts

Your communication plan should be well defined for email and notifications, surveys, device management, and social engagement. Your customer loyalty program should be able to effectively execute your communication plan and engage your customers successfully.

Forrester’s Top Trend in 2015 is “Customers Embrace Emerging Channels To Reduce Friction.”

Ease of use through the customer device of choice is now a very key component to a Customer Loyalty Program.

Lara Ponomareff, research director at the CEB’s Customer Contact Council (CCC), who undertook the five-year study alongside Anastasia Milgramm and Matthew Dixon, explains that as products became more commoditized, customer service emerged as the differentiator.

We found that in the difference between meeting and exceeding expectations was no discernible increase in loyalty behavior. The biggest increase came from going below to meet,” she explains.

The research concluded that what customers really want is simply a satisfactory solution to the service issue rather than to be “delighted” by over-the-top customer service experiences, as previous measurements assumed. The study surveyed more than 100 customer service heads – 89 of which said that their main strategy was to exceed expectations – and found that a staggering 84% of customers who had experienced over-the-top interactions claimed their expectations had not been exceeded.

It brings to mind a Tea Shop I visited regularly. The company actually has a really great mobile app and loyalty program. It is very easy to use and delivers a single message: buy more tea and get one free. However, the customer interaction is WAY over the top. When I walk in the store, I am usually welcomed three or four times by sales people who call me “love” and “darling.” They ask me four times if they can get me anything else. I didn’t want to be bothered, I just wanted my tea the way I ordered it, and you can call me a happy customer. I dropped the loyalty program and started going somewhere else just because I didn’t want to be bothered. They didn’t get it right despite their best efforts. I am sure some executive told them they needed to set a standard that exceeded customers’ expectations. They spent thousands of dollars on training and set a protocol, and still somehow got it wrong. This company didn’t have an open communication plan with their customers and didn’t hear that their customers didn’t like what they were doing.

Use the planning tips and find the right technology partner to help you deliver a program that the customers value and use.

For more information about DBG Loyalty.

DBG Loyalty is a leading innovator in loyalty and rewards marketing. DBG was founded in 2002 because the industry was looking for a trusted technology leader who could develop and establish consumer loyalty programs. DBG has customer relationships which span from the time of inception.

Linda Butcher

Linda Butcher

Linda Butcher is the Chief Business Development Officer at DBG Loyalty, where she heads strategy and sales. Linda has extensive experience in consumer engagement through social media, marketing,
and loyalty solutions.

Linda Butcher

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