Theory: marketing communications cultivate loyalty
Recently I wrote a post on customer loyalty – Why Companies Are Struggling in Cultivating Loyalty – and one of the readers brought up the subject of communication. In his words:
“…………..It’s critically important that companies create an ongoing dialogue with customers to determine their preferences and then create solutions to meet those needs.
One way companies can nurture the overall customer relationship is to determine the best method of communicating with customers (voice mail, e-mail, text messaging, social media, direct mail) and when they would like to receive information. Once they have determined the appropriate channel for communicating, companies can engage customers in a highly personalized and tailored way.
Companies that actively engage with customers on a regular basis can proactively offer additional products, services and information that cultivates customer loyalty.“
What is the reality as opposed to the theory?
First let me say that there will be an array of realities – one for each company and even within the company the reality will be different for each customer. Given that context let me share with you the findings from a report (Data Wastage Report 2011) commissioned by Transactis (a company focussing on data and customer insight services):
- 65% of consumers said that companies have sent them offers for products they would never buy even though these customers had previously handed their personal details and preferences to these companies;
- 58% of consumers said that some companies have sent them offers to become new customers even though they are existing customers of these companies;
- 52% of consumer said that companies have repeatedly tried to sell them products that they have already bought.
Furthermore another Transactis report (Customer Trust 2010) highlighted the following:
- Around 80% of consumers do NOT see any of the firms they buy from using their personal data to make attractive offers and deliver good customer service.
So what is the impact of all this on the 2000 UK consumers that were surveyed?
- 86% of consumers say they would withdraw permission for a company to even contact them if it continues to send them irrelevant communications;
- 88% of consumers say they would refuse to hand over any more personal information if they continue to get these irrelevant communications;
- 81% of consumers say they seriously question the competence of companies that ask for details that they have already given to the company
My take on this: reality is much messier than theory
Some kinds of communications can cultivate loyalty. I can remember that some years ago I received a thank you letter and plastic coffee mug from Amazon (with no sales related offers) and that surprised and delighted me. The result was that my loyalty was cultivated. I have also written about three other instances where the communication left me touched and loyal:
The kind of communications that do cultivate loyalty are not the ones that marketing departments typically produce and distribute. Why? Because, these communications tend to be self-serving and rather impersonal (even if they are ‘personalised’) rather than customer-centric and personal. Put differently, these communications do not create value for the customers that receive them: it can be argued that whilst 20% of customers may find them useful, 60% of customers are indifferent, and the remaining 20% are left annoyed and think less of the company sending out this ‘junk mail’. What looks like success (ROI) on a campaign by campaign basis may be failure when viewed on a longer time scale.