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Customer Loyalty in the Digital Age

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Technology democratization has created a plethora of opportunities for brands to connect with consumers. Brands now need to understand what their consumers really want and establish connect with them at every stage of the purchase decision journey.

This post discusses the growing complexity in the brand-consumer love story and the need for brands to revisit their consumer engagement strategy in order to succeed in the digital age. Customer loyalty in the digital age outlines the gap that exists between consumers demand and brand outreach. It also designs the customer loyalty strategy for brands to reach to the connected consumers.

What's your consumer loyalty strategy? Do share your thoughts.

Veröffentlicht in: Business
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Customer Loyalty in the Digital Age

  1. 1. CUSTOMER LOYALTY IN THE DIGITAL AGE Prepared by: Alok Ranjan
  2. 2. THE LOVE IS EPHEMERAL The rise of disrup-ve technologies has completely baffled brands in reaching out to their consumers. To keep the consumers engaged, it is important for brands to revisit and redesign their loyalty programs to suit the needs of the connected consumers. Picture courtesy: Tom Fishburne, Marketoonist.com
  3. 3. CONSUMER 2.0 – THE CONNECTED CONSUMER 3 Research & purchase on smartphone 41% Research on smartphone, but purchase in-store 46% Research on smartphone, but purchase on computer 37% Research on smartphone, visited store to check the product but purchase on computer 19% Research on smartphone, visited store to check the product but purchase on smartphone 18% Visited the store first, then purchased on smartphone 8% MulP-Screen Purchase Behavior Source: Google ZMOT, 2012 73% 71% 69% 68% 67% 64% 63% 63% 61% 60% 60% 51% 53% 49% 52% 53% 33% 37% 22% 34% 55% Learn about new products General InformaPon Submit Opinions Exclusive informaPon Reviews and product rankings Feel Connected Customer Service Be a part of a community Event/promoPon parPcipaPon Purchase Discount Brands Consumers What Consumers Wants vs. What Brands Offer? Source: IBM InsPtute of Business Value, 2013 The technologically empowered consumer now values rela-onship, authen-city and novelty in a brand. Increase in number of touch points have created a challenge for brands to retain the customers. Further, the gap in delivering value proposi-on has an adverse impact on brand loyalty. 80% 8% Companies Companies that believe they provide superior value proposiPon Companies whose customer agree Delivery Gap Consumer-Brand Delivery Gap Source: Bain ConsulPng
  4. 4. CONSUMER DECISION JOURNEY – ADAPTING TO THE NEW NORMAL 4 Awareness Familiarity ConsideraLon Purchase Loyalty Old School of Purchase Decision Moment of Purchase EvaluaLon/InformaLon Search Brand Loyalty AUer Purchase Experience Trigger IniLal ConsideraLon New School of Purchase Decision Old model of purchase decision is no longer valid. The new decision journey makes it impera-ve for brands to enhance customer experience in order to retain their customers.
  5. 5. PURCHASE TRIGGERS FOR CONSUMERS 5 Abundance of available product informa-on, near-perfect price transparency, special deals, filling the in-store informa-on gap, product recommenda-ons, and smarter store experience (customized recommenda-ons) trigger brand loyalty in the digital age. 87% Before visiLng a store 79% While visiLng a store 35% AUer visiLng a store Consumers looking for product informaLon 35% 36% 39% 70% 71% 75% Coupons/Deals Online Videos Social Network Physical Stores E-commerce firms Search Engines Sources of Product InformaLon Myth Reality ExplanaLon Search results send consumers to e-commerce sites Search results are powerful way to drive consumers to stores Online informaPon fills in gap and moPvates store visits Once in-store consumer begins looking at their smartphones, store looses aeenPon Stores grab aeenPon through retail apps/mobile sites 42% consumers research product on mobile while shopping in-store Consumers visit stores to transact Consumers now expect customized in-store experience than just transact 69% consumers prefer physical store for informaPon during different phases of purchase process
  6. 6. LOYALTY PROGRAMS – FACILITATE BRAND ADVOCACY 6 92% 72% 87% 82% 76% Asia Pacific Europe Middle East/Africa LaPn America North America 57% 46% Consumer Purchase behavior influenced by loyalty program Ped to a retailer Consumer Purchase behavior influenced by loyalty program Ped to a brand 80% 70% Programs are worth parLcipaLng Programs are part of relaLonship with the company 2X Visitor Increase 4X Spending Increase 88% Higher Profit Source: Maritz Source: Maritz Source: Nielsen Loyalty Programs facilitate purchase decisions to a greater extent thereby influencing customer engagement and improving margins. Consumers are more likely to purchase when offered loyalty program Loyalty Programs Increase Margins Consumers Agree to Loyalty Programs
  7. 7. BEST PRACTICES – ANALYZING WHAT IS RIGHT 7 55% 51% 51% 36% 22% Ease of redeeming rewards Monetary rewards Ease of earning points Access to exclusive deals and coupons Easy enrollment opPons What Customers Want? 34% 70% 64% 14% More revenue Customer retenPon Customer engagement Beeer customer experience What Businesses Want? 60% firms consider loyalty to be a strategic priority (Forrester). It is necessary to strike a balance between what consumers demand and what is offered, keeping firms expecta-ons in sync with their business objec-ve. Source: Mintel Source: Forrester Define program objecPves Offer cross – channel customer experience Engage with consumers Innovate with new channels Create value through personalized experience Provide value beyond tradiPonal No customer is equal Use gamificaPon Communicate effecPvely Believe in data Happy Customer CriLcal Success Factors for a Perfect Loyalty Program
  8. 8. DESIGNING THE LOYALTY PROGRAM 8 The connected consumer demands a unique, transparent and customized loyalty program from organiza-ons that aids the purchase decision. It is impera-ve for firms to leverage strategic direc-on adopted by the industry leader to design a tailor made loyalty program to their compe--ve advantage. The Successful loyalty program addresses customer expecta5ons, builds trust, ensures sa5sfac5on and develops a sense of belongingness for the brand. IdenPfy consumer touch points Map business processes Define program goals & business outcomes Segment target group Define profitability drivers Define measurable analyPcs Formulate partnering strategy Design incenPve structure Devise integrated markePng & communicaPon strategy Tools & vendor idenPficaPon
  9. 9. VALUE DRIVERS OF THE LOYALTY PROGRAM 9 Customer touch points & Business process mapping Define program goals & Business outcomes Target group segmentaLon Profitability drivers Define data & analyLcs Partner strategy Design incenLve structure Integrated markeLng strategy Tools & vendor idenLficaLon ˃  Define conLnuum of touchpoints for consumers ˃  List processes and idenLfy value integrators ˃  Develop/Maintain program specific strategies ˃  Manage program communicaLons ˃  IdenLfy expiring inventory and purchase frequency ˃  Manage governance for most valued and inacLve customer ˃  Manage technology limitaLons and program inerLa ˃  Move beyond Lered segmentaLon and idenLfy profitability drivers ˃  Risk miLgaLon ˃  Perform profitability planning ˃  Manage service usage levels ˃  Perform gap analysis ˃  Manage data from disparate systems ˃  Set parameters to draw insights from available data ˃  Define loyalty analyLcs ˃  Integrated markeLng & loyalty analyLcs ˃  Define partnering format (Single, MulL-partner) ˃  Financial viability of partnership ˃  Brand adracLveness ˃  IdenLfy incenLve areas ˃  Define consumer behavior for each incenLve areas ˃  RedempLon rules ˃  Manage regulatory compliances ˃  Devise cross-channel markeLng strategy ˃  ReacLve & proacLve markeLng communicaLon strategy ˃  Loyalty markeLng lifecycle management ˃  Gap analysis of exisLng resources vs tools desired ˃  Requirement mapping available services ˃  Set criteria for technical & funcLonal evaluaLon Firms should evaluate drivers of the loyalty program to gain compe--ve advantage. Tailoring offers, providing ancillary services and increasing switching cost will add to the compe--ve posi-oning of the firm.
  10. 10. Feedback/QuesPons? 10 © Copyright OnMarkePng, 2017
  11. 11. CONNECT WITH ME 11 © Copyright OnMarkePng, 2017 Email: alok.bim@gmail.com Twider: @thealokr LinkedIn: in.linkedin.com/in/ranjanalok/ Google+: OnMarkePng Facebook: facebook.com/OnMktg PresentaLons: slideshare.net/alokbim