The Seven Pillars Of The New Customer Loyalty

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Is Brand Loyalty still relevant for customers? In a market where the limitations of space and time are canceled by technology - and we can buy everything we want directly with a tap on a mobile screen - does it make sense to talk about loyalty?

The answer is ‘Yes’ to both questions. Customer Loyalty is still relevant, but it is hard to get and even harder to retain as the competition is so tight. This is the starting point of The 7 Pillars Of The New Customer Loyalty, our new checklist that will help you improve your strategy and evolve to stay relevant.

As said, loyalty is still important and will continue to be in the next future. Indeed, in times when we have become accustomed to brand switching and polygamous loyalty, the ability to attract and retain the attention and engagement of customers is even more critical.

The reason lies not only in the economic value of this long-lasting relationship - loyal customers buy more and more often - but also in exponential effects regarding competitive advantage (i.e. the sharing of 'positive vibrations' in their communities and social networks).

If the intrinsic value of the customer loyalty remains unchanged, however, the same can not be said of the relationship between companies and people. This connection has been deeply altered by the advent of the digital technology, that has shaped the market scenario in which we have been immersed for more than ten years now.

Not to mention that the pace of this change has further accelerated with the advent of the mobile devices. In a few years, in fact, the smartphone has become the primary point of reference we all turn to when we need information and make weighted decisions.

Whether it is a car purchase, a comparison between two TV models, a holiday booking, the choice of the perfect outfit for the evening, or the sharing of our opinions, the answer is always there, in the palm of our hand.

If we turn the focus on the Brand, the story remains the same: the smartphone is the primary means of spreading contents and messages. When it comes to digital customers (Millennials and Generation Z above all), there is no engagement and loyalty strategy without mobile technology.

We want to emphasize the fact that technology is, as always, a means and not the ultimate goal of your strategy: the solution is not to recreate, in the digital context, the old dynamics of engagement and fidelization typical of the offline world (a virtual loyalty card, to name one).

The reason is that today people do not just want to buy products or services. They want to live experiences. At the heart of any loyalty strategy, there should be the awareness of the value of customer experience as the primary factor of differentiation on the market.

According to Gartner, 89% of companies expect that the decisive battle for relevance on the digital markets will be fought in the field of customer experience. It is not a coincidence: people already consider the experience more important than price and the product itself.

In order to grow your business, you must build personal relationships with customers. Focusing on the experience is the only way to move from a utilitarian loyalty (I spend, and you give me a tangible prize in return) to an emotional loyalty (I choose you because I feel I am an integral part of the Brand).

The evolution from a traditional fidelization to the 'new customer loyalty' is not easy or immediate, but it is necessary if you want to survive in an ecosystem increasingly saturated and competitive. To move towards the future, you must first take a step back, admitting that you do not know your customers, despite the Big Data and your CRM.

The amount of information about customers that the technology makes available to companies is of no use if you do not know what to look for, how to move from macro to micro, and ultimately how to get an intimate understanding of the person.

Before even thinking about customer engagement and loyalty, you have to understand people. Choices are mainly driven by emotional elements, so you need another key to read the traits of personality, behaviors, attitudes, thought patterns, and prejudices.

We are talking about the final step from the study of the Demographics - which tell you who the customers are - to the Psychographics - which tell you what they think and what they want.

Only by studying these essential hidden traits you will be able to gather and select the data you need to personalize experiences and messages. Understanding is the basic requirement to convert customers into Brand Ambassadors.

The purpose of The 7 Pillars Of The New Customer Loyalty is to define the foundations on which to build your engagement and loyalty strategy, to create innovative experiences and establish a lasting and valuable relationship with your customers.

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Generation Z – Understand And Engage The Mobile-First Customers


We have barely started to understand millennial customers, and it is already time to move on. Say hi to the Generation Z, the first ‘truly mobile-first’ generation of customers, set to disrupt (again) the way you plan and execute your business.

Till now, the GenZ has been overlooked in marketing research, because younger customers did not have the same purchasing power of the previous generations. The spotlight was on Millennials, but things are swiftly changing.

Just so we are clear:

  • The Generation Y, what we call Millennials, includes those born between the early 1980s to the mid 1990s.
  • The Generation Z, also know as Post-Millennials or iGeneration, includes those born between the mid 1990s to the early 2000s.

Millennials have captivated marketers and researchers for the past five years or so because they have represented the final transition from an analog to a digital world. They were - and still are - the first digital customers, with a very peculiar mindset and unprecedented needs and desires.

The digital customer is, still today, the primary focus of business planning, but there are new kids in town, and you should not ignore them. We are talking about almost 60 million teens in the US alone, that translates into more than a quarter of the entire US population.

While the two generations have some traits in common, in fact, they also show different behaviors and approaches when it comes to technology. The GenZ grew up submerged in a digital world, shaped by mobile devices. They do not know other world but this.

Millennial customers were mobile pioneers, but today’s teens are mobile natives. A huge difference. They live in symbiosis with their smartphone; they rely on Google, social networks, and communities for all daily activities.

They are not shy about buying online from their mobile devices and, even when they go to the retail store, they walk in expecting something fresh, innovative, engaging. A powerful customer experience, in a few words.

This generation of customers brings to completion the evolutionary trajectory started with the Millennials. They had phones when they were in elementary or middle school, and that shift is already shaping customer journeys that you need to study and understand.

Your business will be affected by their behaviors sooner or later. They are young but, even today, they spend something like 44 billion dollars annually (in the US alone). This figure is set to grow exponentially in the near future.

The first step to understanding the post-millennial customers is to compare them with the previous generation. Last year, in an article published on The Huffington Post, George Beall tried to identify how the GenZ differs from the GenY. What came out is something that you should bear in mind when you plan your next marketing moves.

Among other things, post-millennials teens are:

  • Less focused: They process information faster thanks to mobile apps, and their attention span is significantly lower than other customers.
  • Multi-Taskers: Whatever they do, they do it using multiple devices. This behavior is critical when you try to frame their purchase behaviors.
  • Less price-obsessed: They favor the experience over the bargain. Price is steadily losing weight in the list of factors that influence the purchase.
  • More demanding: “They expect businesses, brands, and retailers to be loyal to them. If they do not feel appreciated, they are going to move on. It is not about them being loyal to the business.” (Marcie Merriman, Ernst & Young)
  • More social: born and grown with a smartphone in their hands, they are strictly linked to their social communities and communicate mainly through mobile apps (Snapchat, YouTube, Instagram).
  • More global: Millennials were the first global generation, thanks to the Internet, but the GenZ is even more ‘global’ in their thinking, interactions, purchase behaviors.

Putting all the pieces together we see that the smartphone is the pivot around which the whole existence of teenagers revolves. A further confirmation comes from a recent report by Google titled “Generation Z - New Insights Into The Mobile-First Mindset Of Teens”.

The first finding is precisely the importance of phones. Getting a phone is a life-changing event, up there with graduation and driving license. While teens have more devices than ever at their disposal, the smartphone is the most used. Moreover, they usually get it earlier than previous generations (the median age is 12).


GenZ - Cool Brands(Click on the picture to enlarge)

The smartphone acts as a bridge that connects the offline and online experiences of teens. Visual contents, messaging apps, social networks, and video games create the environment in which they share their life and find entertainment. Fun - or maybe not fun at all - fact: Nearly 3 in 10 teens say they text with people who they are physically with at the time.

Another research finding states something we have already said: GenZ is a mobile-first shopping generation. Teens have a peculiar idea of what is ‘Cool’, they know what they want, and they buy it online. Video games, books, and apparel are the most common products bought online.

What is really interesting is that they buy online not only because it is more convenient and they can find better deals, but also because they can see multiple brands and retailers without leaving home, and they can choose faster than going to the physical store.

All in all, 53% of those between 13 and 17 years old mostly use the smartphone to make online purchases. If you are a retail brand trying to establish your position in a hyper-crowded market, you might want to take note of this new habit.

The technology is ‘how’ they make purchases, and the ‘Cool Factor’ is the foundation of ‘why’ and ‘what’ they choose one product over another. What aspects make a product cool? The word-of-mouth (offline and online) is still the main factor affecting the choices, and the new forms of advertising come right after.

The third factor, though, is what draws our attention: Something is cool if it is personalized to me. Millennials have been called the Me-Generation because of their self-obsession; with the GenZ, this trend is expected to undergo a fast track.

Personalization is the foundation of cool contents, products, and experiences. Something is cool if it is unique, impressive, interesting, awesome. If they perceive that it is tailored to them, on their dreams and desires.

They expect big things. Your challenge is to live up to the standards and exceed their expectations. After all, these young customers represent the future of your business. A future that is already here.

Download The Mobile Engagement Playbook, a collection of relevant insights that'll help you to overcome the challenges of the digital transformation and grow your business exponentially.

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What Drives Customer Loyalty? Look Beyond Traditional Programs

What are the drivers of customer loyalty? One of the major challenges brands face today is to create meaningful, satisfying experiences for their customers. Experiences they will love so much that they will come back again and again.

The spread of disruptive technologies undermines the ability to conquer and retain customer’s heart using traditional loyalty programs. When technology changes, so do the drivers of trust and engagement. Are you willing to look beyond the usual way of doing things?

In the last few months, we have witnessed a wave of new, interesting researches on the issue of loyalty and its impact on what we call “the relevance of a brand”. Creating and retaining a customer base that is faithful to the company is the top priority. There is a direct link, in fact, between loyal customers and their profitability.

Back in 2015, we wrote a piece about customer retention, and how to improve the way you plan and execute your strategy. A few statistics, taken from that article, still give us valuable hints:

  • The probability of selling to an existing client is between 60 and 70%;
  • The probability of selling to a new customer is just 5-20%;
  • It costs six times more to attract a new client than to retain an existing one;
  • A 2% increase in customer retention has the same effect as decreasing costs by 10%;
  • A 10% increase in customer retention result in a 30% increase in the value of a brand.

It is easy to see why investments in loyalty are booming. According to a recent report by Accenture Strategy, not coincidentally titled ‘Seeing Beyond The Loyalty Illusion’, “more than 90 percent of companies currently employ some form of customer engagement or loyalty program. In the United States, alone, loyalty program memberships grew at a rate of 26.7 percent from 2012 to 2014.

While the investments are growing, however, customer satisfaction remains an overlooked and underestimated field of study. This casual approach leads to an inevitable conclusion: the costs are increasing, and yet most loyalty programs fail to deliver valuable engagement or actual business results.

If something is not working, you put it down, right? Not this time. Traditional programs do not work, but they are still there; because sometimes it is easier - in terms of money and time - to keep them than shut them down. It is hard to admit a failure. So, billions are spent each year in traditional incentives, collections of points and non-cash rewards.

What is the result of this effort? Back to Accenture Strategy:

  • 71 percent of customers claim loyalty programs do not engender loyalty;
  • 77 percent of customers retract loyalty more quickly than they did three years ago;
  • 23 percent of customers show negative or non-existent reaction to companies’ loyalty efforts.

All in all, the propensity to switch from one brand/product to another “is six percentage points higher among customers for whom traditional programs have a negative or negligible effect.

This gap is destined to increase now that millennials - the first true digital native generation - are showing their full potential, becoming critical to driving revenue growth. The digital customers:

  • Take faster purchase decisions - The attention span lowers to 8 seconds.
  • Live online and offline at the same time - The customer journey gets disrupted.
  • Reward the most innovative brands - ‘Mobile-first’ becomes ‘Mobile-only’.
  • Show different purchase patterns - The 4 Ps of marketing change forever.
  • Choose experiences over products - The customer experience becomes the key.

Of course, retention is a long-term run, not a short term activity. However, given the premises, how can you react if loyalty programs cost significantly more, and deliver significantly less? How should you adapt to avoid that the value of loyal customers slips through your fingers?

You have to look beyond usual, and you can do it starting with your customers. ‘Engage’ and ‘Convert’ still are two critical keywords in the age of digital transformation, but they are now complemented by a third - and increasingly important - element: ‘Understand’.

To keep it simple, you will never engage and monetize your customers if you do not know them in the first place. Knowledge is the foundation of today’s marketing. You must know who your customers are (Demographics) but also what moves and motivates them, what are their main psychological traits. Why they do what they do (Psychographics).

Loyalty is more than merely collecting points for every purchase. Loyalty involves an emotional investment, a personalized relationship, a relevant connection.

Even when you employ new technologies in your programs, you must remember that technology is the means by which you create value for customers, not the ultimate goal of the entire strategy.

We get tons of information from customer service, but it Is really important to know how to use that information and not just take it at face value. It Is necessary to interpret customers, not just take them word for word.” (Maryam Mohit, Vice President of Amazon)

In recent times, customer research and analysis have gained brand-new momentum. The most innovative companies have realized that the in-depth knowledge of clients is mandatory, in order to exceed their needs and provide the best customer experience.

All the data in this world, though, will not help if you keep focusing on the most obvious findings. Today more than ever, you have to understand and drive the important clusters of emotions that either destroy or drive added value and create loyal customers.

A wrong approach to customer research translates into wasted opportunities (and budgets). The investments grow but not the understanding of how customers behave, and why. Loyalty still matters but you need to move beyond the old rules, and rethink the way you build and deliver engagement through your entire brand essence.

In other words, you need to find the new drivers of customer loyalty, those that fits perfectly with your customer’s profile, habits, and behaviors.

According to the American Marketing Association, “there are five variables that have been uncovered to be potential drivers of brand loyalty; several have multiple indicators that are combined.” These variables are:

Dependable - When your brand can exceed expectations and create consistent experiences across all touch points of the customer journey.

Better - When you establish your brand as the best solution to fulfill customers’ needs, when and where it matters most.

Social media - When your brand is able to speak your customer's language and connect with them delivering engaging, personalized contents.

Light emotional connection (LEC) - When your brand can close the link to your customers as human beings, not just mere consumers.

Heavy emotional connection (HEC): When your brand can tap into your customer’s heart and mind, leveraging inspiration and emotional advocacy.

Study, analyze, act: this is the proper sequence. Today, loyalty is not just a program; it is a full-time commitment at all levels of your organization. If you make the necessary adjustments, you will unlock the power of technology, to create business value, sustain growth and gain competitive advantage.

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