Table of Contents

Want to Create a Great Customer Experience?

4 Ways to Improve Customer Retention

Why Customer Loyalty is About More Than a Program

5 Things Every Loyalty Pro Must Know About Their Customers

How to Make Loyalty a Part of Consumers' Everyday Lives

3 Predictons for the Future of Customer Service

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Want to Create a Great Customer

Experience? Start With Your Employees

Creating great customer experiences requires engaged employees, not only those
who face the customer, but those who work behind the scenes. In the classic
Harvard Business Review article, “The Human Sigma,” Gallup researchers found
a clear correlation between customer satisfaction and employee engagement.

The Temkin Group’s 2016 Employee Engagement benchmark study found that
companies with high levels of customer experience have 1.5 times as many
engaged employees as do the companies with poor customer experience.

The employee factor

The International Organization of Standardization, known as ISO, updated its

widely followed quality management principles in 2015 to make the engagement
of people one of the seven cardinal foundations of state-of-the-art management
and has approved the creation of engagement standards.

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 “It’s also important to create a climate in which everyone wants to
provide feedback to improve performance.”

So how do organizations make this connection? Employee experiences are

important, but it also requires your organization to have a clear brand definition
that unites customers, distribution partners, employees, vendors, communities
and shareholders.

An engaging environment

Companies need to continually assess engagement and hold managers

accountable, while maintaining communication to reinforce brand promises and
the actions that fulfill them. Critical to this is implementing ongoing training so
everyone is capable of doing their part to maximize the customer experience.

It’s also important to create a climate in which everyone wants to provide

feedback to improve performance. Reward and recognize everyone who excels or
who makes an effort. Finally, there needs to be ongoing analysis of empirical and
subjective survey data and feedback findings to know what customers and
employees need.

The payoff? A culture based on continuous improvement and sustained high

performance that utilizes marketing and human resources dollars more wisely.

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4 Ways to Improve Customer Retention

Customer engagement is no longer a “one size fits all” marketing strategy, but it’s
surprising to see how many professionals still fail to adjust to this evolution.

In this environment, continuously acquiring new customers is more costly and

unreliable, which is why customer retention is now a priority.

In theory, customer retention should be simple and based on doing right by

customers. But, this focus has been lost. The brands that know their customers
well are those performing well. New, mystifying technologies and consultants are
not always the answer to this problem. However, a focus on customer retention
can help. Here’s how:

1. Build loyalty

Customer loyalty is, at its core, about retention, not acquisition. A loyal customer,
by definition returns to a brand, leading to increased lifetime value and long-term
relationships.

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2. Personalize experiences

Customer retention builds deeper relationships, allowing marketers to understand

exactly what customers like and dislike. While acquisition can sometimes lead to
quick, short-term growth, it doesn’t easily lead to insights that drive meaningful
experiences.

3. Generate trust

Customers are more likely to engage with brands that already inspire strong
affinity. Some leading marketers believe customer retention begins with
establishing trust through quality products and personalized experiences, while
many of the ephemeral aspects of acquisition marketing fade.

4. Establish alignment

Customers return because they know what to expect and like what they get. This
requires a consistent internal vision and the ability to mitigate outside influences
claiming to be an end-all solution. Brands must look inward to design the
simplicity that consumers crave.

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Why Customer Loyalty Is About More

Than a Program

Loyalty marketing is not about loyalty programs, as some believe it is. Rather, it’s
about driving true brand advocacy and customer loyalty based on a set of
experiences that an individual has with that brand.

Defining loyalty

The biggest challenge on the loyalty marketing landscape is the use — and
sometimes, overuse — of more and more terms that lack definition, structure and
an explicit understanding of what these words and nomenclatures mean.

As we talk to brands on a daily basis, we ask them about how they define
customer loyalty, how they socialize customer loyalty and how customer loyalty
can impact their organization.

There appears to be a divide between those who talk customer loyalty and those
who talk about loyalty programs. A loyalty program is but a piece of a

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comprehensive strategy that brands should enable to create total and
comprehensive loyalty.

“Terms such as ‘frictionless loyalty’ and ‘empowered engagement’ are

often heard but don’t necessarily help brands in their customer
journey.”

There is also a growing complexity and increasing number of technology

platforms that are intended to create simplicity, but have done the exact opposite.
Terms such as “frictionless loyalty” and “empowered engagement” are often
heard but don’t necessarily help brands in their customer journey. In fact, they
tend to do the opposite, often creating confusion.

Getting the big picture

It all consistently breaks down into an 85 to 15 ratio where 15 percent of the

brands have created the culture, technology, process and alignment with the
organizational mission to truly put the customer first.

The other 85 percent, though, continue to struggle, whether it’s due to the lack of
understanding of where they are in their customer journey, where they are in
their ability to execute, or most importantly in their ability to truly hear and
understand their customers.

It’s a unique time in our industry to help those who are struggling and coalesce
thought around the big picture idea of customer loyalty.

Over the next year, we must work to create a series of certifications and
standards, as well as continuing education resources, that will help create
simplicity and bring unity to the industry while coalescing thought around
customer loyalty.

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5 Things Every Loyalty Pro Must Know

About Their Customers

In its commercials, DirecTV takes a swipe at its competition, cable television,

through a pioneer family of sad-sack “settlers” who accept so-so clothes, food and,
yes, entertainment.

As loyalty operators, are we settling with programs that fail to get the most value
out of data analytics or create true engagement? Before you answer that, here are
some questions to explore:

1. Are you segmenting members for the past or future?

Segmentation should: leverage various data sources to model potential at the

individual member level, test program offers and measure accordingly, and
update frequently.

Evaluate a combination of purchase details, profile data and partner data to help
estimate future rate of return. Weigh various approaches to segmentation and

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consider the methodology, timing and resources for each.

2. Are you investing in members appropriately?

Your value prop should motivate best members for preferred behaviors and offer
something beyond tangible discounting. Some programs overinvest in a group out
of line with their potential. Evaluate member sales vs. program funding, and
analyze benefit costs by type vs. percentage of sales.

3. Are your members effectively engaging?

Consider: Are you achieving incremental financial benefit from additional

redemption and engagement? Are you simply pulling ahead an expected
transaction or generating incremental spend? Are you able to drive incremental
margin through category strategies? The data is already sitting there; not putting
it to better use is a waste.

4. Are your marketing efforts better for members?

Conduct a thorough campaign measurement, not just for a promotional period but
pre– and post-campaign. Be sure to look at the frequency cycle of those targeted.
While things like response rate, click-through rate and the like are important,
don’t lose focus on leveraging the value of individual customer information to
drive bottom-line financial improvement.

5. What is the ROI for your program?

Analysis of a loyalty program should evaluate three factors. Benefits, which may
include, reduced attrition, increased value, account acquisition, membership fees.
Costs, such as one-time startup costs, liability costs, operating and marketing
costs. Results like return on investment, net present value, what-if scenarios and
comparison to industry benchmarks (to assess the range of possible outcomes,
such as incremental transaction lift, attrition improvement, enrollment, or
penetration rate).

Remember: Loyalty programs are a gold mine of data, but companies must have a
clear plan to mine that gold. Don’t settle.

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How to Make Loyalty a Part of

Consumers’ Everyday Lives

Keeping consumers engaged in loyalty programs has become increasingly

difficult, as every brand is vying for their attention and willing to reward their
members with all manner of incentives, from points and rewards, through to
special promotions and cash back.

It’s imperative now more than ever for brands to cut through the noise and find
new ways of naturally integrating touch-points into the day-to-day lives of
consumers, allowing them to earn and redeem in ways that are accessible,
convenient and add value to their lifestyles. Ultimately, what we’re talking about
here is putting consumers firmly at the heart of loyalty programs.

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Creating opportunities

There are already many examples of excellent earn-and-redemption loyalty

platforms that put customers front-of-mind, with some specializing in online
audiences and others focusing more in-store. Brands such as Avios, Tesco and
Virgin Atlantic are just a few examples of brands doing this well, with retail and
travel being two industries synonymous with loyalty and rewards in general.

However, for continued and longer-term success, the real winners will be brands
that can effectively drive engagement both online and offline, creating more
opportunities to interact and, therefore, engage with their loyalty program
members on a daily basis. And it’s something consumers think is important too:
61 percent of travel and financial services loyalty members in fact, according to
our recent global research into the behaviors of global loyalty program members.

“… only 30 percent of loyalty members believe that their loyalty

program rewards actually reflect their lifestyle and hobbies.”

Individualizing rewards

Equally important is ensuring that the data from these interactions is used
effectively. Our research found that only 30 percent of loyalty members believe
that their loyalty program rewards actually reflect their lifestyle and hobbies.
Most of us are already aware of the importance of personalization when it comes
to loyalty program, but clearly more work needs to be done.

Brands looking to build a successful loyalty program should ensure that they
invest time and resources with partners who share a members-first philosophy
and have tailored insights to back it up. Having the same vision and focus is
crucial in building a loyalty ecosystem that delivers true engagement, value and
loyalty.

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3 Predictions for the Future of Customer

Experience

Recently organizations have realized the value a Voice of the Customer (VoC)
program can play in delivering insights into the customer experience. VoC is now
a fundamental part of a well-rounded customer experience program, increasingly
so for B2B companies and as table stakes for B2C companies.

The growing importance of the customer experience isn’t surprising. After all, it’s
well recognized that in many industries customer experience has become a key
player, with prices and even product features being difficult to use as
differentiators. With this momentum comes an evolution of best practices. As we
continue into 2017, we must start thinking about what the next innovations and
trends will be to continue to drive viral, transformational change.

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1. Getting the executives on board

As customer experience practitioners, we know how important certain metrics are

— such as Net Promoter Score® (NPS®) or repurchase propensity. However,
these numbers do not necessarily hit the mark with top executives. It’s important
to clearly show the linkage between customer experience metrics and financial
and business metrics — as these are the sort of scores that executives focus on
daily. They may like the simplicity of one number, but one number is rarely
sufficient for deeper-level insights.

In addition, the juggernaut of predictive analytics has arrived. Leveraging

predictive analytics in VoC and the customer experience will help drive business
change in the organization by looking forward instead of backward. For example,
instead of worrying about what a customer’s NPS® was last week, it’s about
strategizing on leading indicators deep within the experience that will predict
impact upon customer, operational and financial metrics.

2. Motivating employees

Many workers aren’t engaged at the level that provides fertile ground for great
customer experiences — and haven’t been for years. However, you can turn this
situation around by demonstrating the importance of their role in the customer
experience.

In the future, more organizations will focus on motivating employees to deliver

better experiences. It sounds simple, but it works. By creating viral change in the
organization, starting with frontline employees, organizations can kill the typical
“command and control” ethos. This will empower and enable all employees in the
organization — from the bottom up.

Getting customer data and insights into the hands of the right people will allow
for richer conversations, translating to added value for the customers. This is
great for customers, but also allows all employees to be engaged, authentic and
truly enjoy their role, because they know they are making a difference.

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3. Eroding existing data silos

To drive action and change within an organization, it’s critical to break down
existing silos. This will become increasingly important as the customer experience
evolves. Organizational data silos can make it impossible for companies to get the
kind of holistic, real-time insights they need to improve the customer experience,
anticipate customer behavior, drive organizational improvement and maximize
innovation and profitability.

An effective customer journey map relies on cross-functional collaboration,

sharing and communication and continual refinement. This helps to break down
some of the walls that impede delivering on the customer experience promise and
promote an understanding of how everyone plays a role in the journey. It will no
longer be good enough to simply gather customer feedback, analyze and report
on it, then drive tactical action. These are becoming hygiene factors — something
that helps businesses improve, but doesn’t drive transformational change. “Find
and fix” will only bring you up to par.

While it’s difficult to truly predict what lies ahead for VoC and the customer
experience, it’s clear that change will start with those driving the program.

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