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Is customer experience the new loyalty?

Written by Phil Rubin

Through a special arrangement, presented here for discussion is a summary of a current article from the rDialogue blog.

Customer experience, like customer engagement, is a term that defines the white-hot space right now for marketers, much like CRM in the late 1990s and early 2000s. But things are different now, as we live in what is described by Forrester and others as "The Age of the Customer."

We have accelerated past the prime of mass marketing and, fortunately, there is no slowing down. Customers want (and increasingly expect) relevance, given the data they share with brands, the scarcity of their time and the transparency of pricing and quality. As Gartner recently reported:

"Customers will not tolerate companies that have amnesia when it comes to remembering them and their preferences for recognition."

If customer loyalty starts with customer engagement, then understanding what makes a customer willing to pay attention to the brand is fundamental. People pay more attention to you when you pay attention to them, something most brands fail to do. Brands tend to look at customers with a wide-angle lens, and still (sigh) look closer at non-customers, focusing on acquisition.

Customer in J.Crew
Photo: RetailWire

Customer experience — just like customer loyalty — is the sum total of all customer interactions, at all touch points, both online and offline, throughout the customer lifecycle. And the reasons one pursues a great customer experience strategy parallel those to loyalty marketing:

  • To build addressable and direct customer relationships;
  • To drive organic (i.e., same customer) growth and engagement;
  • To increase relevance and differentiation at the expense of mass promotion;
  • To build data and insights;
  • To align marketing (and other) investments with value.

There is no divide between customer engagement, customer experience and customer loyalty. Each strategy aligns with a mandate to deliver a better customer experience and recognize the appropriate differences between customers. Brands can't be the same thing to everyone because that same thing is not going to engage everyone.

Being relevant, whether you're a brand or a person, comes from paying attention to the other party. It's why we define loyalty marketing as paying attention to customers and acting accordingly. Does this not also apply to customer experience? Isn't customer experience, by definition, a reflection of doing just this? We think so, without question. It's why there is no mention of points or rewards in our definition. The paradigm of customer loyalty needs to flip: brands need to pay attention to and be loyal to customers rather than starting the other way around.

So, is customer experience the new loyalty? Or is loyalty the new customer experience? Clearly, the answer is both.

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