You don’t have to be an Einstein to understand what is important to your target customer, but understanding the relativity between the customer’s experience and long-term loyalty does take some sharp thinking. And it can make a double-digit difference in sales.
These are the findings of a recent report by COLLOQUY called The Big Bang Theory of Customer Centricity. Among its findings: Companies that practice Enterprise Loyalty can see their revenue increase by as much as 20 percent. The report highlights five companies that demonstrate these capabilities: Caesars Entertainment, Qantas, the financial services company USAA, the British grocer Tesco, and South African retailer Woolworths.
When you think about it, this makes perfect sense. Does the frontline employee know how often a particular consumer shops with your company? Do the site planners know from data insights how far your regular customers drive to shop at your locations? Do the folks in merchandising realize that the stores in college towns should stock smaller packets of fresh meat and produce, because the average households are smaller?
All of these insights can be gained through the practice of Enterprise Loyalty – the sharing of customer data beyond the marketing department, where it has traditionally been held. But adopting Enterprise Loyalty might require a philosophical shift in operations.
For many companies, the standard thinking has been that loyalty program data, as a marketing tool, should be sequestered in the marketing department. But in reality, all departments of an organization, from finance to legal to merchandising, can benefit from these insights because they reveal what is relevant to the consumer. And the consumer will benefit as well, in ways that are evident.
How do customers respond to Enterprise Loyalty practices? According to the report, companies in the early stages of an Enterprise Loyalty strategy can experience an 8 to 10 percent bump in revenue. Over three to five years, that gain will increase up to 20 percent. Here’s how that longer-term sales increase breaks down:
-A 2 to 4 percent increase from promotion optimization;
-3 to 5 percent increase from pricing optimization;
-1 to 3 percent increase from assortment optimization;
-3 to 5 percent increase from improved customer experience;
-and 1 to 3 percent increase from employee productivity.
These gains are real, and they can represent a material difference in a company’s return on investment. By overlaying a variety of data and then using those insights to understand the customer’s needs and aspirations, a company can create the types of experiences that result in rewarding relationships.
That’s the first step toward customer commitment. And it’s not just a theory – it is the way to operational and financial success.
