How to keep customers even when loyalty is dead
It is an uncomfortable truth for many businesses that, in the eyes of their customers, their brand is an insignificant thing. The amount of time and energy that target audiences invest in thinking about brands, even when making a purchasing decision, is often fleeting at best.
In fact, according to our recent report, The Loyalty Paradox, over 25 percent of people show no sector-specific brand loyalty whatsoever. This can be a jarring realisation for business leaders who spend significant resource on crafting a brand identity that they believe will inspire loyalty from consumers.
However, whilst it may initially seem difficult to accept that over a quarter of consumers show no sector-specific brand loyalty, the situation becomes more nuanced upon closer examination. Within the FMCG sector, for example, women seem to be driven towards greater brand affinity than men, as do younger generations in comparison to their older counterparts.
What is consistent across consumers is the trend of habitual purchasing behaviour - where purchases are made out of habit, rather than a strong commitment to a brand.
Is this taking the place of more traditional customer loyalty?
From a commercial perspective, encouraging this habitual behaviour yields many of the same benefits as the more nebulous concept of inspiring brand loyalty. So rather than chasing the Golden Snitch of ‘the brand ambassador,’ businesses need to be resetting their own expectations. This is where the vast amounts of data that is now available can be utilised, helping brands break down the purchasing journey and pinpoint the key triggers which encourage consumers to return.
Individual customer journeys
The key to unpacking any habitual purchasing behaviour is a comprehensive understanding of the data to inspect throughout a customer journey. Companies must be able to work out what it is about the specifics of their interactions with potential customers that allows their product to end up in a shopping basket more than once.
This pragmatic approach acknowledges that product quality is not the only driving factor for loyalty, and it is the interactions a brand creates which can make all the difference.
For a few years now it has been technically possible for organisations to move away from conceptual target journeys featuring very large buckets of consumers, online/offline/app purchases etc., and start mapping and identifying customer touchpoints down to an individual level to provide a view of real-world journeys which encompass unique different touchpoints, pre, during, and post-purchase.
However, there is a significant resource expense to planning down to this level, which does not provide sufficient benefit. You are taking a wide view of a company’s interactions and using a combination of data analysis techniques to understand which interactions add or take away the most perceived value and then providing refinements to turn that around. These can relate to very specific behaviours relevant to only a handful of consumers or those which cover the entire customer base.
In instances where mapping thousands of potential individual journeys is not practical, this impact over input lead approach can still provide a viable north star to work around.
In addition, the role of successfully working technology should never be underestimated, creating the most idealised customer journeys falls at the first hurdle, if the tech cannot support it, or interactions are not delivered consistently. Integrating technology so that customer data can flow correctly across an organisation and be used effectively by in-house teams is one of the greatest challenges modern organisations face, but one of the projects we at Edit find most awarding.
Customers want control
As the concept of developing a holistic indicator of customer ‘loyalty’ is more complex than it first appears, especially in terms of marketing’s tangible impact on customer churn, or purchase frequency for example, shifting audiences towards being advocates of the use of their first-party data can be hugely beneficial.
This means organisations should concentrate their targeting to consumers who consent to sharing their data, and see the value in a long-term exchange, whether that is delivered via offers, incentives, exclusives, or editorial content.
Modern customers demand control of the data they share too, making their own choices about how they want to interact with organisations. They have certain expectations around digital touchpoints and communications and are looking to have autonomy over their digital customer experiences. One of the more surprising insights unearthed by our research was that a majority of consumers prioritise the ability to personalise and control their interaction with a brand over any form of brand incentivisation scheme when it comes to building a relationship with that brand.
By interacting with customers on their own terms and developing a sense of trust, as well as putting minds at rest by only using information that people are willing to share, companies can provide customers with a sense of control that will be key to encouraging habitual purchasing behaviour.
The definition of loyalty has changed
Brand loyalty may not be the key driver of repeat purchasing that some organisations perceive it to be, but that doesn’t mean there is nothing that brands can do to encourage customers to keep coming back. Brands need to reconfigure their experiences around the demonstrable needs of their customers.
Traditional messaging that could be considered ‘marketing 101’ still has its place. For instance, customers will still expect key information that helps with a buying decision to be articulated to them across the purchasing journey. They will want to know how a product can benefit them, how it is made and what it stands for, for instance.
But to successfully compete in the online marketplace in 2022, businesses will need to go beyond the basics. Savvy millennial and Gen-Z purchasers understand the value exchange between their needs and company objectives, and they will only choose to accept any relationship if the balance is in their favour.
This means that organisations need to provide potential customers with a personalised experience that offers them the control and choice that they crave, whilst making the rewards for first-party data sharing immediately evident.
Doing so will create an environment wherever more sophisticated insights can be obtained. In turn, this will allow companies to ensure that projected customer journeys are more closely aligned with the reality, delivering a frictionless experience that leads to repeat purchases - whether that is down to loyalty or not.