Businesses today face a double whammy when it comes to marketing, argues Veronica Mikhail, Director of Marketing Asia Pacific and Japan for CRM software provider SugarCRM and Marc Englaro, Director of Customer Insights for customer experience agency and technology provider, Squiz, in this opinion piece.
Firstly, consumers aren’t as loyal as they used to be, and secondly they look to each other for recommendations and guidance before making purchase decisions rather than the brands they’re weighing up.
The rise of the Internet and social media has shifted power from traditional advertisers to consumers, so brands can no-longer dictate the communication agenda. That’s why customer advocacy – not satisfaction – should be a goal for every organisation.
Marketers need to understand what loyalty means today, and enable positive word-of-mouth, or watch as competitors devour their market share.
The loss of loyalty
Over the years, it has been very common for businesses to measure customer loyalty through a relatively shallow view of “satisfaction”. The principle was that satisfied customers would be loyal to the brand and purchase more over time. Marketing teams simply needed to present offers to satisfied customers at every opportunity.
But customer loyalty has become so difficult to maintain that some believe it’s a thing of the past. The blame is often placed on technology, fierce competition and ever-increasing customer demands and expectations.
The satisfaction principle may once have been sound, but those still relying on it to define loyalty and pin their marketing hopes on, are getting left behind.
Satisfaction is obsolete
The problem with customers who are passively satisfied is that they aren’t necessarily advocates. If a customer isn’t telling others how great your product or service is, you’re missing out on influencing the buying behaviour of future customers.
The difference between customers who are active advocates and those who are simply satisfied, is neatly illustrated by the Net Promoter Score (NPS) survey methodology. The NPS approach asks a single question:
“On a scale of 0 to 10, how likely are you to recommend our business to a friend or colleague?”
The objective of this approach is to determine the proportion of customers who are “promoters” and subtract the proportion who are “detractors” to get the net result. Those who are simply satisfied and passive, (i.e. neither promoters nor detractors), aren’t factored into the equation at all. Therein lies a massive wasted opportunity.
So how do you turn passively satisfied customers into active promoters?
Simply focusing on sales conversions can damage long-term loyalty. Broadcasting non-interactive, one-size-fits-all communication generally leaves consumers disinterested at best. The key is to enter into a wider conversation with consumers, understand and appeal to them individually, and inspire them towards brand advocacy in their own conversations.
Customer engagement occurs over a long period of time. The lifecycle for engagement can begin a long time before a decision to purchase is finally made, and long after purchase. It’s not enough to focus solely on the checkout experience.
With success comes higher expectations
As customers share more information with businesses, their expectations also increase. Customers are expecting nothing less than a highly personalised experience that takes into account their buying history, previous interactions, who they are and what they’re interested in.
For example, when a repeat visitor arrives at a hotel, they expect the person checking them in to have access to previously provided information. They also expect a quick, seamless and personalised service.
To add to the challenge, customers these days judge and measure experience against the best in every industry.
The answer is rather simple: pay scrupulous attention to customer profiles and shape interactions accordingly.
3 golden rules for Customer Engagement
Know thy customers
If existing and future customers are willingly sharing information with businesses, they expect you to recognise them from one interaction to the next. Taking into account demographics, preferences and context when you’re building a profile database from the first interaction, will enable you to tailor the experience to each individual and provide a much more personalised service.
A consumer is exposed to 300 to 3,000 marketing messages every day, most of which aren’t even noticed, let alone absorbed.
To cut through this noise, develop your brand’s reputation around useful, interesting and engaging information. When a consumer looks forward to messages from your brand, the likelihood of them paying attention and taking action is so much higher.
Engage outside the buying cycle
Customers want to care about brands. Apple, Nike and Canon all have strong engagement programs, and they all work hard to maintain customer loyalty, providing customers with opportunities to engage outside the traditional purchase process. By doing so, they add value and introduce a better experience at each interaction.
Customers demand to be heard and involved. It’s up to you to understand them better and cultivate a long-term relationship. The most successful brands will thrive by driving advocacy with this customer-centric business model.