When you hire a marketer or commission a consultancy to increase loyalty, what exactly do you want to achieve? Loyalty is not just about getting people to agree to buy your product a second, third, or fourth time. It has nothing to do with transactional marketing, where you pour in traffic and try to convert it into purchases.
True loyalty also has no connection to bonus systems, where you push the desired consumer behavior in exchange for bonuses. People, of course, come for these if the product suits them. But they will easily abandon the brand if they find a more profitable or interesting option. Loyalty is when people come back to you over and over again instead of turning to your competitors. It is formed when audiences are in contact with the brand in different channels of communication, understand the value of the product, and experience positive emotions in doing so.
This cannot be achieved if you don’t take care of your customer experience and implement tools to improve it. The experience is also a product of your company. It builds value in the eyes of people. It’s the reason people will buy from you and not your competitors. More, longer, and happier.
Why invest in loyalty
Depending on the industry, it is up to 25 times more expensive to attract a new customer than to retain an existing customer. The longer people interact with a product, the more they will buy. Loyal customers are less sensitive to price increases. They recommend you to others, and you don’t spend a dime to attract new customers.
What does loyalty consist of?
The first thing that comes to people’s minds is satisfaction.
Indeed, researchers have found a positive relationship between customer satisfaction and various aspects of loyalty:
- a sense of belonging (Dick and Basu, 1994);
- the reduced intensity of blame and anger in unsuccessful cases (Forrester and Maute, 2001);
- intention to re-buy (Reichheld and Sasser, 1990; Zeithaml et al., 1996);
- intention to reuse (Bitner, Booms, and Tetreault, 1990; Jones and Suh, 2000);
- willingness to recommend (Faullant et al., 2008).
How to Achieve Satisfaction
It’s trite to meet and exceed expectations. Expectations are shaped, in part, by you broadcasting your promises to the audience. Try not to praise yourself too much or raise your expectations too high. Otherwise, people will be looking closely for the little things you can pick on, and be quickly disappointed by any flaw. Ideally, if the buyer expects from you a little less than you can give him.
It’s relatively simple here. If you have a chatbot popping up on your site with the message “Operator on call” – he really should be on call and respond quickly. If you say you have same-day delivery – it should be same-day. If you have it written that the delivery is a day, but under the asterisk in small print, “Within two kilometers of the sales office. – it’s a deception of expectations. A rare consumer will read something in small print.
If there is a question, it should be answered by a qualified specialist, not a tech support agent who reads the answer from the FAQ. There’s no need for communications or positioning to promise things you can’t achieve just to stand out in the marketplace. The worst thing you can do when interacting with a customer is to deceive expectations.
That’s half the trouble. Consumers have expectations of their own, not those formed by you. They are dictated by people’s life context, past experiences, emotional factors, social status, education, and so on. Loyalty is born in the mind of the consumer. Without communicating with them, without researching their behavior and preferences, and without collecting and processing feedback, loyalty cannot be achieved.
How to research customer experience
There are different methods of consumer research: qualitative and quantitative. Qualitative ones are in-depth interviews, usability tests, focus groups, diary studies, and participant observation. We use them to answer the questions of how and why people act in this way. Quantitative methods are mostly surveys. They are used to get statistically significant data and to find out how often people do the target action, and what percentage of people think in a certain way.
So we have collected data on consumers. What do we do with them next?
Three Fancy Letters – CJM
The Customer Journey Map or customer journey map is a tool for modeling CX or customer experience. The tool is far from new, it was invented at McKinsey back in 2008. The essence of this framework is to lay out the stages of decision-making. Compare it with the touchpoints a person goes through when interacting with a company. This allows you to see problem areas in the customer experience and figure out how to fix them. Generally speaking, CJM has standardized steps that are often filled out anyhow or simply by a template. In the first place comes the discovery of the company’s product and service.
Then the consumer looks at it in more detail, as if he were studying it in more detail. Then he compares it with other options, chooses and buys it. Then suddenly, out of nowhere, loyalty is formed and the desire to recommend it to others. Unfortunately, this approach, to put it mildly, rarely corresponds to reality.
You can track the CJM with the advanced retention report of the Finteza analytics service will allow you to estimate the number of users that go from viewing a product card to leaving the site within a selected period of time.
The essence of this framework is to lay out the stages of decision-making. Compare it with the touchpoints a person goes through when interacting with a company. This allows you to see problem areas in the customer experience and figure out how to fix them. Generally speaking, CJM has standardized steps that are often filled out anyhow or simply by a template. In the first place comes the discovery of the company’s product and service. Then the consumer looks at it in more detail, as if he were studying it in more detail. Then he compares it with other options, chooses and buys it. Then suddenly, out of nowhere, loyalty is formed and the desire to recommend it to others. Unfortunately, this approach, to put it mildly, rarely corresponds to reality.
It’s also unclear what happens to the buyer after the first transaction is completed. He bought, maybe even recommended, but then what happens? What happens when he comes again? These actions, too, need to be modeled and thought through to make his experience better.
CJM that will work:
- Is not filled out by a template from the Internet;
- Is based on real consumer data, preferably both qualitative and quantitative. If there is no budget or time at all, you can get by with qualitative data, expert interviews, and information from web analytics systems;
- If it focuses on more than one service cycle. The post-purchase experience should also be modeled – what happens when the customer returns?
Satisfaction is not enough
A satisfied customer does not, by definition, become loyal. What’s more, a satisfied customer won’t forgive a company for a mistake in service. 32% of customers will walk away after one negative episode, even from a brand they like. 92% of people will end a relationship if a negative experience is repeated 2-3 times.
A strong relationship is a combination of fulfilled expectations, where a person is satisfied with functional factors, and emotional attachment. It’s even more complicated because learning past experiences and current audience preferences is a relatively straightforward story. The emotional components are quite difficult to operationalize.
Consumers either don’t realize why they feel this or that or don’t admit it to themselves. People also like to give socially acceptable answers, even in anonymous surveys.
Based on extensive research across 9 industries, and with more than 9,000 interviews, Ipsos survey company has identified 6 components of emotional engagement:
- Pleasure. When a company makes a person’s life easier or gives more freedom, an impression of pleasure is formed from the relationship with the company. Pleasure is associated with the ability to have the desired experience and avoid trouble.
- Belonging. A person who shares the values of a company and sees how they care about the common good feels a sense of belonging. A sense of belonging is the key to a healthy trusting relationship.
- Clarity. It is a feeling of predictability, and transparency of service. It is formed when the customer controls the process and receives a predictable result. Uncertainty, especially now, discourages customers. Transparent information about all aspects of the service will make people feel more confident.
- Fairness. The reciprocal exchange and willingness to make concessions on the part of the company form the impression of fair treatment. If a person thinks the company benefits unfairly, he or she is less willing to use the company’s services.
- Control. A feeling is formed when people’s opinions are taken into account. For example, a customer’s complaint was not only addressed but also reported on the work done afterward.
- Status. The buyer feels his status when he is valued, and respected, and provide special treatment. This is the most difficult of forces to improve. Significant flexibility and an individualized approach are required for each.
Your strengths at every stage of the customer journey
At every stage of the interaction with your company, offer the customer appropriate amenities and incentives. For example, when searching for product information, clarity is important: a clear catalog and delivery times. You can track the sales funnel and take actions to optimize it through Finteza.
At the time of order, you can offer a discount on shipping so that the shopping experience isn’t overshadowed by worries about shipping costs. You can offer payment after delivery so that the person feels fair treatment. A note in the package with a personal thank you will just make him smile.
Bottom line
Loyalty is made up of many factors. To get it, it’s not enough to give the customer a discount or congratulate him on a holiday. It is necessary to take into account the customer experience at all stages of interaction with the brand. To do this, it is necessary to communicate with the audience and conduct research, surveys, and tests. Build hypotheses on their basis and implement them into the product.
