One of the most startling findings in “State of the Customer Journey 2014,” was the dramatic gap that is emerging between marketers and the ever-changing connected consumer.
It seems brands and consumers are at complete odds when it comes to what these loyalty programs should be about. Specifically, a large majority (nearly three quarters) of consumers declared that loyalty programs should now be about how brands can show how loyal they are to them, as individual consumers. Any guess how the majority of marketing execs saw it? You guessed it. The majority (nearly 2/3) of marketers still believed that loyalty programs should be the other way around – a way for consumers to show the brand how loyal they are to them. In today’s “Age of the Customer,” you already know which side of this battle will win.
In our world of infinite options, increased commoditization and desire for immediate gratification, can consumers truly be loyal to a “brand?” Considering this dramatic gap in the perception of “brand loyalty,” let us introduce: “categorical loyalty.” Are consumers really loyal to Whole Foods, or devoted rather to natural, organic food as a category? To Tesla Motors as a brand, or rather to the concept of a 100% electric vehicle that has long enough range to replace their petrol based vehicle? Loyal to Zappos, or rather to a brand that can make it finally easy to shop for “hard to fit” items via the Internet with great return policy and customer service? Each of these examples are often confused with brand loyalty, but in many cases consumer are focused on the attributes, experience or category of offering.
These examples are ripe for disruption. As brand and categorical options continue to grow, traditional loyalty program strategies become more challenging than ever. Consider the downfall of the UK’s Tesco, long-standing example of the market’s successful loyalty program example, now in turmoil.
Gartner’s Jake Sorofman said it perfectly in his recent blog, inspired by this same research report, “Most loyalty programs are a bit of a misnomer when you consider their actual intent. More often than not, they’re structured to reward a consumer’s transactional loyalty to a business or a brand—not to demonstrate loyalty to the customer.”
In 2015, fewer and fewer consumers will be loyal to “brands.” Instead, to win their attention (and wallets), brands will need to shift their strategy to show their most valued consumers how loyal they can be to THEM, as a consumer.
So how exactly can a brand show loyalty to its customers? One of the most successful tactics in 2015 will be “surprise and delight” efforts- rewarding consumers with unexpected moments of experience. This is more than points-for-purchase.
Consider the frequent bakery shopper that is offered a free cup of coffee with their order, just for being a great customer. Consider the airline that provides its flyer with a surprise upgrade (remember when that used to happen with airlines?), the happy anniversary email that is sent to the owner of a car one year following the purchase, with a QR code for a free car wash to get it looking brand new again. The major bottling company that produces personalized bottle packaging to its greatest social advocates. These are all inexpensive experiences to craft and create for the brands’ most valued customers that demonstrate the brands’ unique appreciation to them as a consumer.
Marketers, this is a wake up call. Consumers have told us exactly what perspective we will need to win their attention in 2015. Good luck on your own journey to demonstrating this new generation of brand loyalty.