A clever blend of data is key to building loyalty

Whenever I go to York railway station and decide I want a coffee, I make the subconscious choice to go to Starbucks rather than any of the other outlets. Is this because I feel loyalty to Starbucks? No – it’s because I can get my espresso in a china cup rather than a paper one. At what point does a customer become loyal to a particular brand, anyway? Do they ever actually think: ‘I’m loyal to Brand X’? I’m not sure we have these conscious Road to Damascus moments. 
However, buying coffee is often dictated by availability – and being desperate enough to choose the lesser of many evils. More considered choices, such as supermarket, insurance provider or next car purchase, are much more likely to bring loyalty into the equation.


We often talk about ‘choice architectures’ during the decision-making process, in which defaults, frames and price anchors have a bearing on consumer choices. Ideally, brands want our decisions to be based on experiences we have had with that brand, product or service. The abundance of data now available to brands gives them the opportunity to influence, and hopefully enhance, the experience that customers have. As a result, they can have a positive influence when that customer comes to re-evaluate their needs.


Take car insurance. Aviva offers Drive, an app that monitors driving skills. Once the driver has completed 200 miles, they get an individual score out of 10 based on things such as cornering, braking and acceleration. Drivers who score 7.1 or more save an average of £170 on Aviva’s comprehensive car insurance. So this piece of IoT thinking (a mobile phone in my car) not only potentially makes me a safer driver but could also save me money. Forget the tricks of behavioural economics theory on the insurance quote page – I’m in.


What would prevent me from cancelling my gym membership? Personalised prompts from my gym to keep coming back if I start missing sessions are useful. So the fact that gyms like Pure Gym provide usage statistics like this means that they can use the data to understand my behaviour and react when that behaviour changes.

And if one of the reasons I don’t come in is because I hate when it’s too busy to use my favourite machines, why not let me know when it’s busy so I can plan my sessions accordingly?

One of the biggest issues Telco companies have when considering churn is the impact of ‘bill shock’, when a customer is distraught at the size of their mobile phone or data usage bill. And yet, data can tell them in advance when a customer is likely to go over their minute or data limit. My bank warns me when I’m in danger of going overdrawn, therefore my Telco provider can easily do the same thing.
In a similar vein, my credit card provider reminds me when I haven’t looked at my online statement for a while. Yes, it shows a sense of corporate responsibility to make sure I keep an eye on my finances but it also makes sense from a business perspective. If I run into trouble financially, having a credit supplier that has an eye out for me means their card won’t go near the shredder.
This stuff isn’t rocket science, so why aren’t more brands doing it? For some older organisations, pulling together all of their various data can be a painful process, while some companies feel they need to have the perfect data set before getting the ball rolling (they don’t – just take some data offline and play with it). There is a (slightly controversial) theory that some marketers think they know best and are afraid that the data will tell them otherwise or even take their jobs away.
But really, it’s just about data making brands even better – by looking at some of the real influences on customer loyalty and tapping into the data available to shift the loyalty dial in their favour.
 

First published on Zone's site

Gamification is now the point when it comes to customer loyalty

The shop-ocalypse has arrived, and as the twin horsemen of Black Friday and Cyber Monday looming on the horizon, supermarket security guards and server-maintenance technicians alike were crossing themselves in fear.

And while retailers -  both of the bricks and mortar and e-commerce variety – are hopefully enjoying the benefits of the annual pre-Christmas shot in the arm (I say most as, of course, we know that Asda are giving this year a miss), a question that often gets forgotten by their marketers is: ‘What do we do with all these new customers?’. Wearing my CRM hat, all too often I see too little attempt to look beyond the sort of ‘stack ‘em high, sell ‘em low’ mentality that will prevail this weekend in terms of follow-up responses to first-time interactors. 

It’ll certainly be interesting to see if the increased embracing of a gamification approach to CRM – i.e the application of elements traditionally associated with gaming  ­– has an effect, and whether the marketing departments of any major retailers adopt that kind of approach specifically to post-Black Friday purchasers.

Even the most basic CRM model knows three things about customers post-purchase: who they are, what they bought and when they bought it. And this week the ‘when’ is crucial, because as it’s Black Friday marketers know they like a deal. That’s the kind of genuine, actionable intelligence that retailers need to exploit as they attempt to drive more value than occasional purchases of heavily discounted goods. It’s here where the gamification aspect of a sophisticated CRM approach kicks in.

Whereas the old temptation for marketers was to see these customers merely as prime fodder for end-of-line discounting sales and the like, a smart CRM approach will have identified the desired behaviours, and seek to encourage and reward them on an ongoing basis – as well as ensuring there is more than one route to success (and reward) for the customer.

By delivering genuinely meaningful rewards (such as free priority delivery or early access to new products) and increasing their scale (in line with greater, yet still attainable challenges), gamification can create an ongoing relationship that goes beyond the occasional interaction generated by specified discounting or the now increasingly dated accumulation of points approach.

Look at what Marks & Spencer has done with the recent launch of its Sparks loyalty scheme, which now has gamification at the heart of its structure. The retailer has identified frequency of spend, amount spent, advocacy (hopefully) via reviews and promotion of CSR credentials – via ‘Shwopping’ – as the behaviours it wants to influence.

Points in the form of ‘Sparks’ are given based on these behaviours and, by reaching key thresholds, the customer is rewarded with access to special events and priority notifications of sales etc. The scheme goes further by promising to tailor rewards based on a member’s interests.

It’s a similar story with ASOS, but because of the very nature of the brand’s audience the social aspect of ASOS rewards will do the bulk of the lifting to encourage engagement with the brand. Currently when users post an image of themselves on social channels using certain hashtags the content is used on the ASOS website.

Moving forward, those signed up to the loyalty scheme will be awarded points for posting on social channels and interacting with content thus recognising, promoting and rewarding an natural existing behaviour. 

In this age of big data, there’s no excuse not to use this kind of approach: one that both understands a customer’s existing behaviour and attempts to alter it through ongoing interaction. It’s certainly a far better way of winning a customer’s loyalty than straight discounting… after-all, a digitally empowered customer is a notoriously fickle one. 

Post first published in Marketing