Tuesday, April 19, 2011

5 Key Customer Loyalty Trends for 2011

Here are a few insights from Mark Johnson, CEO of Cincinnati-based Loyalty 360—The Loyalty Marketer’s Association for how best to engage customers in the coming year. He wrote 11 here are five.

“In today’s crowded marketplace, creating loyal, engaged customers is more important—and more challenging—than ever,” says Johnson. “That is why we are going to see a number of key trends unfold over the next year.”
Here a few key trends he predicts will dominate the loyalty marketing industry in 2011:
1. Focusing on engagement and building long-term relationships. Loyalty is not a program — it is a journey & a strategic business goal. 
2. Loyalty will focus more on emotions rather than on rational, incentive-based initiatives It’s the emotional side of the decision-making process that creates connected, passionate, & engaged customers. Behavioral economists tell us that economic decision-making is 70% emotional & 30 % rational, which is why incentive-based loyalty programs that engage the emotions of your customers will work better than rationale based ones.

3. Relevancy will be a key driving force of customer loyalty and engagement. Today’s customers want loyalty programs to be “about me”—individual, relevant, meaningful, etc. Ipsos Mori and The Logic Group found that 48% of people surveyed said “Personally relevant deals are the second most frequently chosen reason for spending more with a company.” As business owners we need to strategically use the data we collect to show customers we’re listening & give them what they’re asking for.

4. In-the-moment marketing - how best to use all customer touch points, including mobile.  This is certainly not a one-size-fits-all communication channel. The most successful loyalty initiatives will be those that are relevant in terms of both messaging & communication. Take a more strategic, generational look at how you can most effectively use moment marketing, including mobile.
5. Cause-related marketing/corporate social responsibility programs that are aligned with strategic corporate goals will effectively drive loyalty—especially with Millennials.  That marketing segment of 18- to 34-year-olds. According to a recent survey by Cone, interest in cause-related marketing grew among the general population between 2008 & 2010, with social & environmental causes having a significantly greater influence on the purchase decisions of Millennials than any other generation. If marketers are looking for 18-to 34-year-olds’ receptiveness to branding, social and green issues are a good place to start—85% of respondents said they would switch brands because of such marketing, while 73% said it would get them to try a new brand.
KEY TAKE-AWAYS: Focus on...

The goal of customer loyalty initiatives will be to engage customers. With engagement comes loyalty, advocacy, trust, passion—the soft side of the customer relationship that directly impacts the bottom line.

What actions are you taking to create loyal customers?