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Habits versus Loyalty. It's easy to get confused.

 

By: Ray Chelstowski / Hilton Barbour

Routines.

We all have ‘em.

Whether it’s the daily routine of going to the gym, grabbing a Starbucks, and reading the newspaper headlines on your mobile while you wait. Or the little one’s like the order of milk, sweetener, and counterclockwise stir…or was that sweetener, milk and clockwise?

Importantly for those of us in the loyalty game, which of these behaviors are habits, routines, or genuine loyalty?

Are you really that fond of Starbuck’s unique flavor or is it that there is a location 5 minutes walk from your home and in the lobby of your office tower? Or that you’ve accumulated enough stars on the Starbucks app to get a venti, double-pump, triple shot macchiato before that 1st Zoom call?

In a world where some organizations remain comfortable assuming that transaction frequency automatically equates to consumer loyalty, asking how you define loyalty – or separate it from habit or routine – is a critical question.

Equally for organizations that look at mountains of 3rd and 2nd Party data and draw behavioral correlations, the inevitable demise of the cookie should be sounding loud alarm bells for how your loyalty program is constructed and operates.

At Kognitiv we are constantly asking ourselves – and our clients – if what we’re seeing across their business and their loyalty program is a sign of habit, routine, or a more genuine reflection of loyalty.

One of the ways we do that is through our SmartJourney methodology which is a robust diagnostic of an organization’s loyalty efforts, who they attract and who they could or should be attracting more business from. Importantly SmartJourney provides insight into the financial impacts of your current program and recommendations on how to improve those critical financial returns.       

We’re also obsessively focused on deepening, and broadening, our capabilities around data and helping our client’s craft a more all-encompassing data strategy.

We are very aware that consumer sentiment, and government legislation, is increasingly leery of how personal data is captured, often abused, and regularly exploited. Rightly so. Nothing is more irksome that communications that not personalized and not relevant. Particularly because that needn’t be the case if an organization is truly strategic in their data strategy.

For us that means embracing an ALL-DATA strategy.

Recognizing there is gold in all data sources but being deliberate and diligent in apportioning the right correlations to the right data. That means not treating 1st, 2nd and 3rd Party in exactly the same way. And, increasingly, finding ways to capture Zero-Party Data which is the data that consumers willingly give us directly. Data that is often a better indication of where they are genuinely loyal…and where they may just be stuck in a routine or habit.

For our clients that comes to life in what we call Collaborative commerce.

Through collaboration we bring non-competitive peers within our client portfolio into an ecosystem where they can work together leveraging data they have on shared customers to develop and extend incentives that they could never build on their own. That collaboration also opens up new funding sources for our clients creating more nimble and agile partnerships where all parties succeed – and their consumers are the ultimate beneficiary.

As the saying goes, old habits die hard.

However, loyalty leaders know that consumers who routinely buy from you are not the same as loyal ones. And the impact of the latter on your business can never be understated.

Perhaps it’s time to start some new habits around your loyalty program.

ray.chelstowski@kognitiv.com

hilton.barbour@kognitiv.com


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