Customer satisfaction is worthless. Loyalty is priceless.

By: Ray Chelstowski / Hilton Barbour

You could be forgiven for thinking this was an early version of a classic Rolling Stones track. Actually, it’s the title of a famous book by Jeffrey Gitomer.

In it he he argues that even if a company had a 97% satisfaction rating there remained another 3% who were “free agents”. They might be currently happy with your product, but they are continuously on the lookout for even better alternatives.

While 100% customer satisfaction might be unlikely – particularly with the millions of new products launched almost daily - there is little doubt that a well-constructed and well-executed loyalty program is one way that you can keep your satisfied customers close.

And keep a close eye on those that look set to leave.

Customization and personalization are the key.

Mapping a personalized customer journey – through the entire life stage of their relationship with you – is a delicate blend of creativity and hard data. It requires knowing your customer holistically and analyzing them through different data types like demographics, purchase history, and behavioral data.

Increasingly sophisticated software allows businesses to review, and react to, behavioral data helping them understand if the customer is happy, upset, moderately satisfied or apathetic with the company. Understanding what is triggering a decline in participation, or rise in frustration, can be a critical component in fixing what is driving your loyalists away.

This strategic dexterity forms the backbone of Kognitiv’s SmartJourney methodology where we help clients map brand-new customer loyalty programs or retune and refine existing programs that are underperforming.

Gone are the days when customer loyalty was rewarded generically and merely leveraged purchase history to profile participants. As the excellent chart below highlights, US consumers are increasingly active in the loyalty space…but have fallen out of love with almost 50% of the programs that they initially signed up for. That is something that would make Jeffrey’s head spin.

Today we can take a different and more customized route to ensure consumer loyalty. A perfectly curated loyalty program can help businesses retain customers while attracting new customers.

Data sits at the center of that kind of success and the brands that embrace an analytical approach to loyalty will have an edge on their contemporaries. They will be the ones that truly understand how to harness a customer’s online and offline behavior.

And, as the good people at Mastercard and our friend Jeffrey would say, that’s priceless.

ray.chelstowski@kognitiv.com

hilton.barbour@kognitiv.com

Comments

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