The rise of customer engagement through social media has brought into question the “old” concept of customer loyalty.
The opt-in nature of social media, where customers choose when they want to receive and engage in communications with brands, has begun to overshadow the traditional CRM method of customer loyalty. On a great post over at The Strategy Web, Martin Meyer-Gossner has questioned the future of Customer Loyalty cards. Why should a customer sign up to a card, receive generic mail shots with offers and messaging that isn’t relevant to them? With the exception of a card in their wallet, where is their declaration that they support this brand or service?
Social media allows consumers to control their customer experience with organisations, becoming a fan, follower or friend – how and when they choose to. Does this emotional engagement in this interaction mean more than signing up to a discount card? Or does one click mean less then signing up for a store card? Rather than go down the typical ranting blog post route announcing the old format “dead”, isn’t there a third route?
Social Media is cheap, colloquial and great for macro and micro communications. CRM and loyalty schemes are normally more expensive, take more time but brilliant for targeting specific groups of customers. What we’ll see in the next few years is a combination of the two, where social media is used for broadcast & conversation, whilst CRM and loyalty cards are used to target and reward dedicated customers… who, hopefully, have enjoyed their customer experience so much they feedback through social media becoming brand advocates.
Social media allows consumers to fit brands and services into their lifestreams, rather than just their wallets. The impact of this change is only just beginning to bear fruit, but will be commonplace in the future.
I think that regardless of the method, the most important thing nowadays is that the customer does not feel he is treated like a number or as “just another customer”. Generic mail shots certainly can’t do much good in this.
If the customer gives you his personal information (even about his family, lifestyle etc.)and in a way commits to your brand/store, he expects that you will also use this and that he will be treated on the basis of that information – not like everybody else.
Imagine that your friend tells you he hates wine but for his birthday, you invite him (as a gift) for a degustation of wines. He would either think you didn’t listen to him or you’re making fun of him – none of this is OK for your friendship. And it’s the same with the customer.
According to what I’ve just written, I don’t believe that traditional CRM method is necessarily endangered, but you need to pay a lot of attention to what your customers want to say to you and constantly maintain a mutually beneficial relationship with them. If you succeed in this, they won’t perceive your card as just another card in their wallet but more as a sign of support or commitment to your brand/store.
But the whole idea of the loyalty card is to track the data and give better discounts, mailings, etc. You don’t send out generic mailings to people who use their cards. That’s the point.
And companies that are content to let customers decide when and where they’ll be contacted won’t last long.
There will likely be a blend. Everyone is so hasty to say the loyalty card is dead… that may be a bit premature.
I would venture to say that maybe the point, but I don’t see alot of companies do this to improved a Customers experience. They do it to sell more stuff. The word ‘loyalty’ in Loyalty card is a misnomer. It is not about loyalty it’s about discounts, mailing etc as you have said.
Colin Shaw
International Author. Lastest book “The DNA of Customer Experience”
Follow me on Twitter:
ColinShaw_CX
Ursha
You raise some good points thanks.
In my view CRM may not be dead, but its laying on it’s death bed taking its last grasps of breath! CRM has been drive to much by systems and by an ‘inside out’ mentality in my view.
Colin Shaw
International Author. Lastest book “The DNA of Customer Experience”
Follow me on Twitter:
ColinShaw_CX
Hate to point out the obvious, but the existence of loyalty cards is to sell more stuff.
Attempting to target customers and tailor marketing efforts exactly. Its not perfect, but its getting better.
Colin
I have to give you full marks for your bare-faced cheek. CRM dead? Dream on!
If I look around I see the vast majority of data-rich companies still actively engaged in CRM. It continues to provide companies with a powerful tool to reach out to customers. Sometimes it works well. Sometimes it works spectacularly well. Whatever its faults – and it has many – it is no more likely to die than the King Canute is to keep the rising English tide at bay.
CExM was supposed to improve on CRM and sometimes it has. But much of the CExM is as inside-out as the worst CRM. Like CRM it is just another tool to add to the mix. And you know what. SocCRM is more of the same. Particularly as it is often implemented.
My prediction is that CRM will continue to provide value to companies that use it intelligently. CEM will be layered on top of CRM but will not surpass it. SocCRM will be yet another layer. Who knows if SocCRM will eventually surpass CRM. It is too early to tell. But I am not betting on it in the short term.
Graham Hill
Customer-centric Innovator
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Hi Colin
I see that Tesco’s Clubcard loyalty programme is aiming to give back to customers up to GBP 140 million in rewards through its latest promotion. GBP 140 million!
http://www.marketingweek.co.uk/3016529.article?cmpid=MWE01&cmptype=newsletter
Last year Tesco gave back GBP 101 million in a similar promotion.
When was the last time a CEx programme you worked on gave back something useful to customers on anything like this scale?
Graham Hill
Customer-centric Innovator
Follow me on Twitter
Interested in Customer Driven Innovation? Join the Customer Driven Innovation groups on LinkedIn or Facebook to learn more.
We’ve found that customer loyalty cards are still very popular within the restaurant and pub trade.