Loyalty has always been created through consistent performance and brand affinity.
Customers will return and pay more if they believe in the quality and value of the product or service, and especially if they feel the brand represents their own values and aspirations. Somewhere along the line however, the word loyalty has been hijacked to describe programmes that lock customers into a membership scheme or points system, often in return for obscure and underwhelming rewards.
A lot of so-called ‘loyalty’ programmes seem to offer only small improvements to the user’s experience, while giving the company behind them an intimate view of customer movements and behaviours. Similar to electronic police tagging, a lot of points cards and loyalty schemes have become more about data collection and surveillance than they are about rewards or better service.
As customers, our expectations and behaviours are changing. Equipped with a range of research, comparison tools and switching sites, it has become easier than ever for us to move around between different brands to suit our individual needs. In retail especially, customers are using these tools to demand greater value for money and seek out brands that they can trust. Showrooming is a well known example of these tools being used to play the system, where customers will visit a physical retail store to try products out, or find expert and trustworthy advice, but then ultimately buy the items online at a discount.
The change in customer expectations has been demonstrated by growth at both ends of the grocery market, as customers demand greater value for their money, as well as brands they can trust in and aspire to. Budget supermarkets such as Aldi and Lidl have seen huge growth, at the same time as more aspirational brands like Waitrose. In other words, to earn customers’ trust and loyalty, it’s as important as ever to a) deliver great core experiences, whilst b) demonstrating a brand message or promise that customers can relate to.
In the first instance, customer expectations of a great experience are increasingly driven by the trend for convenience. Customers now expect to use digital tools to get what they want, through the channel and time they want it, and will go elsewhere if this is not made possible. Meanwhile through the same tools, a customer’s individual transactions and shopping behaviours are pieced together into rich accounts of data. Apps are learning shoppers’ habits and opportunities are growing for brands to improve the recommendations they make to offer more seamless experiences.
To be perceived as a one-stop-shop where multiple customer missions can be conveniently combined has become an important strategy for the likes of Amazon. They have lowered the barriers for customers to get what they want, in a variety of ways e.g. One-Click ordering, Prime next day and Now One-Hour Delivery. In a similar vein to traditional loyalty programmes, retailers are able to use this growing wealth of customer data to streamline operations, design better propositions, and over time, build relationships with customers based on shared understanding and familiarity.
This brings us to the second part of the loyalty equation - demonstrating a brand identity and making promises that customers can relate to. Not just through simply stating who you are as a brand, but by playing the part, which is where we come to service roles.
As product and service ecosystems grow in complexity, it becomes more and more important that brands are clear about the roles they play when delivering a service experience. They also need to be clear and honest about what value is exchanged in their efforts to build and expand customer relationships.
Different customers look for different types of support in getting what they want, and will often be willing to sacrifice something themselves if they are supported in a way that suits them. For example a customer will be encouraged to share more of their personal information if in return the service acts as a specialist adviser, using the information they’ve shared to provide relevant and compelling recommendations.
Customers who especially want to be saved from mundane, boring tasks, and be treated like a VIP, are probably looking for a service that plays more of a concierge role, and are likely to spend extra money if done well.
Then there are the people who need you to be the hero; the one to save their day and every now and then, go above and beyond expectations. For this, a customer is likely to not only advocate the brand, but more importantly they will also come back time and again, and even forgive small mistakes.
Understanding the roles that both customers and the service play within the retail environment not only helps frontline staff empathise and focus on the best way to support customers, but can also help to bring the brand’s identity to the heart of customer experiences. Through these roles, customers begin to relate to the brand and build a perception based on the value it brings.
Shopping from a range of places with a variety of offers has become the norm, and new retailers are falling over themselves to make it as easy as possible for customers. As a result, lock-in loyalty systems appear increasingly outdated. Successful retail in the digital age is being shaped by the removal of barriers around customer interactions making the shopping experience so incredibly easy and convenient that customers have completed half of their journey before even considering the alternatives.
However digital tools can be easy to copy, and so gaining customer loyalty will increasingly require more than a simple and convenient experience. For brands to build relationships with their customers and gain their loyalty, they will need to shape the experience around the value exchange, and design-in distinctive service roles that customers can relate and aspire to.