Apple is often cited as having the most loyal customers worldwide. But what drives their customer retention? 14 years of impressive innovation across a range of devices has people waiting in line to buy whatever they release. From the iPod to the iPad. They love the design. They value the reliability and common operating system across devices. And their loyalty points? Well, no. Because they don’t issue any.
Clearly Apple is an extreme example of customer loyalty. To call some of their customers loyal is somewhat of an understatement. However as a brand it works as a reminder that loyalty points alone do not drive customer loyalty or improve customer retention. They may create a false sense of loyalty among the top 10% to 20% of customers pursuing mercenary objectives. And others may feel a sense of lock-in, as they strive to reach a level of points to earn something of value. But this is not real loyalty. What is needed is a wider loyalty strategy.
Personalization helps with customer retention
As many customers are generally mercenary by nature, and merchants are mostly focused on profit, evolving from simply thinking about issuing points to having a real loyalty strategy is a long-term exercise. It can’t happen overnight. Issuing points can be a very effective way to start influencing consumer behavior by appealing to left-brain, rational actions. However once momentum is established, the merchant should start targeting more emotional forms of engagement to accelerate a customer’s feeling of loyalty and advocacy.
Loyalty points are just one tool to use. There are others in the arsenal, too. Perhaps the most important one is treating the customer with respect and recognition. Personalized targeting can help a customer recognize that you care enough about them to engage on more of a one-to-one basis. In fact, most customers have given information about themselves to brands expecting better personalization – only to be disappointed. It’s okay if they expect something in return, but at a minimum, you need to call them by their name and make reference to recent interactions with the brand.
Statistics show that once the customer becomes part of a loyalty program, the relationship between them and the brand increases by a significant factor, these correlations would be visible when using something like Heap Analytics to follow the behavior of different customers. It’s critical to take advantage of this. By putting the customer first, you improve their impression of the company and drive further engagement.
Loyalty points do not create loyal customers
Customer retention is critical at a time when acquiring new customers can be incredibly costly. At Currency Alliance, we believe that a well rounded loyalty strategy is much more effective in the long run than simply issuing points in the hope that consumers who are locked-in to your points program won’t go to the competition. We offer solutions for implementing a holistic strategy and have created a universal loyalty currency called comcoin. It helps consumers get more value, which in turn helps merchants get more quality information about customer interactions.
You don’t have to become the next Apple. But realizing that a customer isn’t necessarily loyal just because you issue them with loyalty points is an important first step on the road to building a truer sense of loyalty. If you want to improve customer retention, a strategy focused on dialogue with the consumer and personalized targeting is essential. When looking at Customer Relationship Management (CRM), it is important to make your conversations feel personal to each client. One way of personalizing communication is by direct contact, such as telephoning them. This can make it feel a lot more personal, whereas an email could be sent to multiple people at once. Phoning each customer directly can take longer, which is why it’s good to have multiple phone lines open and have a team of people calling clients, increasing productivity. When looking for a phone line, it might be worth looking at Eatel Business crm features on their phone lines. This can help to improve client relationships. Ringing clients is always a good way to keep them loyal to your company.
If you would like to talk further, have any comments, or would like information about our loyalty enablement capabilities for your loyalty strategy, please get in touch.