Loyalty Is an Outcome, Not an Objective

 

By: Hilton Barbour

Almost every planning meeting in history has a classic moment where a heated debate breaks out over whether something being discussed is a strategy or a tactic. 

We’re of the school that a strategy is the WHAT you’re trying to achieve like, for example, gaining increased penetration of a new market sector. The tactic is HOW you’re going to do that which might involve launching a unique product purpose built for that audience or starting a loyalty program where that audience can earn more significant benefits than any other group.

The same clarity is important when you’re discussing the difference between outcomes and objectives.

An objective is something you plan for and actively drive toward.

An outcome is what occurs when all your objectives are subsequently met.

Many organizations will communicate profit as an objective when, in reality, profit can only be achieved after all the other objectives you set – keeping COGS low, negotiating favorable retail positions, getting NPD out the factory, spurring increased purchase frequency – occur.

Profit is an outcome, not an objective, because it cannot be achieved in isolation. It requires all elements of your business to meet those specific objectives first.

Actually, one of our favorite sayings on the topic is “Profit is the outcome of doing the right things right”

Why is this clarification important for loyalty leaders and loyalty programs?

Because true genuine loyalty is an outcome, just like profit, of doing all the right things right.

Because earning the increasingly elusive loyalty of your customers requires taking a holistic and objective view across your entire business and seeking out all the elements in your control that impact each interaction and making that experience as brilliant as you can.

That means a product that delivers what you proudly proclaim in your advertising. Every. Single. Time. And, because mistakes, acts of God, and supply chain issues do happen in the real world, being forthright and proactive with your customers when your product doesn’t deliver what you claimed. And doing that ASAP.

That means a customer service ethos, in line with your brand positioning, that is oriented towards helping, not thwarting, customers who want to deal with you frequently. If they need help installing, downloading, returning, or upgrading your product make it as simple as you can. And do it across the channels they prefer. And with as much humanity and care as you can muster. Is there a place for an automated chatbot? Maybe, but if low-cost airline Southwest Airlines can create world class fun and human customer experiences on their margins, we think chatbots shouldn’t be your first idea if you’re trying to be customer-first.

That means a loyalty program that seeks to reward your customers both financially and emotionally for picking you over all the other alternatives they could’ve. In today’s business environment that means paying particular attention to how you collect and use their data and being open and transparent with them about it. It means doing your very best to put honest-to-goodness personalization at the heart of your program, which means more than getting their salutation right but sweating over the rewards that would have the most impact on their lives and reinforce their decision to shop frequently with you. Ultimately it means looking at your loyalty program efforts as central, not as an addendum, to the slew of marketing efforts you perform daily.

In our experience helping Tier One organizations with their loyalty initiatives, the most successful are those who have rigor and discipline baked into their business objectives. Those who recognize that success comes from doing the right things right. And, when it comes to loyalty, that it’s the culmination of efforts across every aspect of the business that makes customers come back to you time after time after time.

That’s an outcome we can all agree on.   

ray.chelstowski@kognitiv.com