By: David Parsons, Ellipsis Managing Partner
1. Define Your Objectives
The first question to ask is ‘what business problem are we trying to solve?’ This may include; raising customer lifetime value, stopping customer churn and challenging competitors. Customer centric objectives understand the customer and put them first.
It is important that your agreed objectives produce an incremental financial benefit back to the business over a reasonable period of time, and exceed the incremental initiative/program costs.
2. Decide on the order of priority by using the Customer Experience (CX) Pyramid
Delivering a consistently good customer experience requires the execution of a hierarchy of sequenced requirements. Just like Maslow's famous ‘Hierarchy of Needs’, each level must be satisfied before the next becomes important.
• Meet Customer Needs: Reliably keeping promises builds trust and enables a relationship between the customer and the organisation. First, find out what is important to customers and then find out how you are delivering against this and fix the most important, worst-performing, services first.
• Make it Easy: The concept of using customer data to create a personalised experience ensures relevance and ease. Minimising complexity requires companies to dynamically adapt to individual needs and preferences.
• Make it Enjoyable: Customers who take quality for granted, and quickly get used to being treated personally, now look for something more to distinguish a supplier worthy of their loyalty. The goal is to design a customer experience that creates emotional connection, with advocacy as the outcome.
3. Incorporate People and Processes
Businesses typically struggle to implement two core competencies, people and processes.
• The quality of interactions with current and potential customers should be closely monitored
• Your decision-making processes must incorporate the needs of current and potential customers
• Employees across the company need to share a vision of the ideal customer experience
• Employees should be recognised for improving the customer experience
4. The Say-Do Gap
What consumers say they prefer is often different to what they actually prefer. Consumers will say they make purchases based on rational decisions, but consumers most often make purchases based on unconscious emotional factors.
An example to consider: when consumers are asked which reward they prefer, they will mostly always say “cash.” In reality cash rewards often fail to change behaviour. Promotional currency earned toward a future redemption is a much better driver of incremental behavior change.
5. Measure Your Customer Investments
Australian companies are spending over $5 billion in loyalty points and rewards, but what are we trying to achieve? The most loyal customers, who are sometimes the largest, are not always the most profitable. For this reason, it is critically important that we measure the profit returned from customer loyalty and retention marketing investments before potentially spending more good money.
The really high returns will come from the insights that allow you to plan a better future before it is too late.
Delivering relevant and engaging customer experiences is proof that your customer focused retention strategy is working. Learn more by attending the ADMA Retention and Loyalty Marketing Strategy course.
Sydney Course: 20th September
Melbourne Course: 16th November