I had the privilege to attend the recent 2012 NRF convention and was impressed with the buzz around loyalty marketing and customer centricity. In one session Macy's CMO Peter Sachse stated, "We don't need new customers. We need to keep the ones we have and get more out of them." Simple yet powerful; all marketers should take this approach--and will create more valuable brands as a result. Yet, why do so many companies continue to miss the mark here?The need to retain customers, and get more out of them, is increasingly apparent in the need for what Loyalty 360 calls expectation matching: building loyalty and engagement by using behavioral insights from customers to meet their expectations. Companies have loyal brand advocates because they "match (and exceed) the expectations" of their brand constituents. They achieve this by using voice of customer (VOC) proactively, and from across all touchpoints, to understand customers.
Brands that don't take this approach often have to resort to discounting and gimmicks to entice customers to repurchase. Take, for example, a discussion I had with a large upscale brand during NRF. They talked about the challenges they are having taking disparate loyalty, transactional, and CRM data and creating a proactive dialogue not predicated on discounting or couponing. Not only were there challenges in marketing to their current customers, but they had issued a number "daily deals" at steep discounts hoping that prospects' first purchase would lead to return purchases. This, however, created a mismatch from the inception. Customers will continue to expect discounts, while the company hopes that it can switch from discounts to other aspects of the customer experience as a way to retain customers.
This "acquisition without expectation mentality" is detrimental. Marketers harm a brand indefinitely when, from the onset of the relationship they basically tell the customer: "I want you to purchase from my brand and I am going to give you this huge discount to do so. But them I'm not going to meet your future pricing expectations; therefore, I really have no hope for you to re-engage with me."
Conversely, Kimberly Grabel, senior vice president of marketing at Saks Fifth Avenue offered a great example of expectation matching during her session with technology partner 5one. She explained that a core premise of Saks' approach to customer centricity is to be able to "feed stores with insights about their customer in real time" in an attempt in increase engagement and loyalty--in other words, expectation matching at customers' key moments of truth.
During the conference, Aprimo CMO Lisa Arthur said, "This is the most exciting time to be a marketer, and the most challenging time to be a marketer, as well." Using VOC to gain a holistic view of customer expectations, and then using expectation matching to meet them, can help marketers harness that excitement and conquer those challenges--building customer loyalty in the process.
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About the Author: Mark Johnson is CEO of Loyalty 360, The Loyalty Marketer's Association