We’ve all heard the statistics that it costs more to acquire new customers than it does to keep existing ones. Yet many marketers continue to struggle with building customer relationships that last. Fortunately, advances in marketing technology are empowering the next generation of customer loyalty and driving more high-value customer interactions than ever before. Here are some insights you can use to maximize your own customer relationships.
The Problem with Old Approaches to Loyalty
According to a study published by COLLOQUY, the average U.S. household has enrolled in more than 18 loyalty programs. The bad news is that they’re active in only 8.4 of them. Rajat Paharia, author of the book Loyalty 3.0, believes this is because most loyalty programs-like those ubiquitous “buy 10 get one free” punch cards and cash-back credit cards-are “emotionally shallow.” Merchants essentially bribe customers for their loyalty. With such a strong focus on freebies and price deals, these programs can eat a giant hole in profits. What’s more, there’s little to stop a competitor from stealing customers by simply offering better rewards.
The solution, Paharia says, is to take your loyalty program to a deeper level by learning how to fully leverage three critical components:
Key 1: More Data
With tools such as Email Intelligence at your disposal, you can collect data that goes beyond traditional demographics. These services can show you a wealth of data, such as what sorts of interests your customers have, what sorts of items they typically purchase and which social networks they prefer. To take it a step further, look to online and offline methods to fill in even more data blanks, so you can learn as much as you possibly can about your customers.
Key 2: Proper Motivation
Now that you know more about your customers, you can start to connect the dots and uncover meaningful insights into what makes your customers tick. What sorts of customers do you attract? What does a day in their lives look like? What do they value most? What are their challenges? What do they search for? What do they buy?
Crafting a complete buyer persona empowers you to understand how to build deeper relationships with your customers. As Lauren Sorenson explains at HubSpot, “At the end of the day, personas put a face to your customer and help you identify their needs and wants.” Armed with these insights, you can begin to identify new areas of value that you can add to your customers’ lives.
Key 3: Smart Personalization
John Donahoe, CEO of eBay, recently declared that personalization will be the next key competitive advantage for Internet retailers. In fact, personalization really goes beyond customer loyalty; personalization speaks to improving the entire commerce process.
It’s no longer sufficient to merely add the customer’s name in the subject line of your emails. To build true loyalty, personalize every aspect of your communications with your customers-from customized product recommendations to special offers to targeted content based on each customers’ interests and needs.
Furthermore, merchants with truly loyal customers don’t need to worry about competition because their customer relationships will be based on a deeper connection of trust and shared value. As Paharia states, “All brands can attain true loyalty if they are committed to a win-win relationship with their customers.”
If you’re looking for more information on how to better leverage data to drive stronger results, click here to download “Using Customer Data to Achieve Email Marketing Success.”