Beyond the box: Relationship marketing as loyalty
Through a special arrangement, presented here for discussion is a summary of a current article from the rDialogue blog.
Traditionally, loyalty has fit in a nice little box. It’s a program that you join, with steps you take to earn rewards, and then rewards you can redeem. In recent years, that box has gotten a little larger, with a few new bows on the outside. Brands like Walgreens and Kimpton are rewarding customers for purchasing and non-purchasing activities. North Face and Nordstrom have experiential rewards tied tightly to their brands. Programs like Steelers Nation Unite and Panera Rewards have surprise & delight components.
But there’s further to go. Loyalty should evolve beyond the box — to blur the line between loyalty vs. relationship marketing, and acquisition vs. customer marketing to simply become customer strategy and customer centricity. That’s a big vision, but a reasonable, attainable vision. Disney is one brand acting on this vision today, with fluid, data-driven engagement (rather than programs) via its Magic Band that gives the customer a voice in their brand journey.
Getting started requires thinking a bit outside the box:
Step 1: Mobilize your organization around the mission of an enhanced customer strategy. Executive ownership and support is critical.
Step 2: Create a broader definition of "customer" for your brand, not just someone who buys or even opts in. Your most loyal customer may buy aggressively in one channel, but only look like an opt-in in another.
Step 3: Create a broader definition of customer value, beyond purchasing. A customer that buys two times a year may be more loyal and will purchase for more years than someone who bought four times in one year.
Step 4: Get smart about your customers through segmentation that goes beyond the typical spend, demographics, psychographic analysis, to include how they buy, how they think, feel, make decisions, and what they like beyond your brand.
Step 5: Build journey maps for those segments that lead to purchases, engagement, habit, commitment, and loyalty. Recognize that the path to loyalty isn’t a linear process, so give your journey maps room to wander, just like consumers are likely to do.
Step 6: Create strategies and tactical marketing initiatives to act upon these. Start at the beginning of the relationship. Branding and anonymous marketing begin the relationship and should lead to opt-in that enables nurture campaigns — which leads to relationship marketing which leads to loyalty marketing and so on.
Looking out two to three years, we believe the line between loyalty and other marketing capabilities will blur, moving toward true, authentic customer marketing. Clearly, it’s more complex than a six-step program. The tools, data and technology are there for us to move on this vision now, to meet the customers where they are in their journey, nurturing and recognizing loyalty from their perspective. The loyalty leaders will move there.
Do you see loyalty becoming much less transactional (i.e., simply rewarding purchases) and shifting more towards relationship building? What challenges do you see in getting there? What step or hurdle may be missing from the article?