The world of data is constantly changing and evolving. New technologies, legislations and policies pressure companies to re-examine the way they deal with data.
Developing a strategy to boost customer trust to your brand is critical to your business’s long-term success.
Due to COVID-19, every business today is in a competition for customer trust. The concept of trust is deeply hardwired in our brains. More specifically, trusting someone is associated with many positive emotions and is an amazingly persuasive force. Conversely, distrusting someone is associated with negative emotions.
How do you build trust with customers?
You earn customer trust by repeat good behaviour, and providing value to customers they can’t get anywhere else. Rather than create new customers right now, you can work on maintaining your relationships with your past customers. Today companies can do this by knowing their customers and finding ways to make customers’ lives easier and better. Like any relationship, exploit it and customers will run from the building.
In a post-coronavirus world, it could be a long haul back to business as usual. This is the time to think about your relationships and how to keep them healthy.
Customers tend to be people of habit, and many enjoy the benefits that come from being loyal to a brand. Loyalty programs used to just be for airlines and grocery stores, but now brands across all industries offer programs to reward customers for their loyalty.
Leading companies that develop a people-first approach will win in today’s digital economy, according to the latest global technology trends report from Accenture (NYSE: ACN).
As technology advancements accelerate at an unprecedented rate – dramatically disrupting the workforce – companies that equip employees, partners and consumers with new skills can fully capitalize on innovations. Those that do will have unmatched capabilities to create fresh ideas, develop cutting-edge products and services, and disrupt the status quo.
Although perceived value is a strong driver to encourage shoppers to return for future products, it has been shown by many retailers to not be the only driver and influences based around customer service, product range, stock availability and the shopping environment also have a key role in the shopper’s decision to return.
Research by HarvardBusinessReview shows that “increasing customer retention by five percent” can result in a “25-95 percent” increase in company profits.
This is unsurprising as Bain and Company found a direct correlation between the amount of time a customer has been with a retailer and the amount that customer spends. Their research revealed that “apparel shoppers purchase 67% more per order after shopping with a company for 30 months than they spent on their initial purchase”
I said back in the early 2000 era, we were all looking to deploy strategies across customer lifetime value – brand satisfaction and brand loyalty played a key part in our business survival toolbox. In today’s world customers staying loyal to companies for long periods are numbered.
The amount of trust consumers put in brands is decreasing all the time, and a typical consumer will now switch brands without hesitation if they get a better offer. The famous rule of 20% of customers accounting for 80% of the turnover has turned into more like 60/40 rule (40% of the customers generate 60% of the turnover) and it is slowly evolving towards a 50/50 rule where loyal and disloyal customers generate the same amount of income.
The conventional wisdom about competitive advantage is that successful companies pick a position, target a set of consumers, and configure activities to serve them better. The goal is to make customers repeat their purchases by matching the value proposition to their needs.
By fending off competitors through ever-evolving uniqueness and personalization, the company can achieve a sustainable competitive advantage.
But the idea that purchase decisions arise from conscious choice flies in the face of much research in behavioural psychology.
The brain, it turns out, is not so much an analytical machine as a gap-filling machine: it takes noisy, incomplete information from the world and quickly fills in the missing pieces on the basis of past experience. Intuition, thoughts, opinions, and preferences that come to mind quickly and without reflection, but are strong enough to act on, is the product of this process.
This behavioural shift is putting some fundamental, established marketing tactics in doubt, but are we as marketers powerless to stop it?
Loyalty programs are an often-overlooked aspect of customer experience, but they can be vital in building relationships and loyalty with customers — when they’re done well.
So exactly what is the solution?
According to popular theory, there are two ways to escape the commodity market. On the one hand, a company can work more efficiently, making it possible to sell its products cheaper. On the other hand, you can offer a unique added value, thereby re-establishing differentiation so you can charge higher prices again.
If we look at history and look at people behaviour, historically people engaged in brand loyalty, but how do you get customers to become loyal to your brand in the first place? Here are a few suggestions:
Build targeted messages
With social media being the centre of many people’s day-to-day lives, consumers want to see that brands care about them. Consumers are constantly bombarded with ads, so yours can easily get overlooked.
How do you stand out? Try targeting your ads, using campaigns that appeal to your audience’s specific interests, and customizing your messages with a personal touch.
Develop a loyalty programme
Customer loyalty programmes are a huge factor in retaining loyal customers. 44% of customers have between 2-4 loyalty cards, and 25% have between 5-9 loyalty cards.
43% join loyalty programmes to earn rewards, and 45% say it’s a primary driver for purchasing from a brand. As you can see, loyalty programmes are a huge deal with customers, and it pays by getting them to come back to your brand whenever they decide to shop.
However, be aware that you’re more likely to retain customers through a free rewards programme. The majority of people (52%) aren’t willing to pay a membership fee.
Adopt a mobile strategy
Brand loyalty has gone mobile. Seventy-seven percent of smartphone users say that mobile offers have a positive impact on their brand loyalty, according to AccessDevelopment.com. This can include surprise points and rewards or exclusive content.
Another 66% of consumers say they’d have a more positive opinion of a loyalty programme if it was available on their smartphone or in a mobile wallet app. Furthermore, 73% of smartphone users are interested in having loyalty cards on their phones.
What happens if you fall behind your competitors and don’t offer a mobile solution to your loyalty programme? You’ll likely see a decrease in customers. 66% of companies that saw a decrease in customer loyalty in the past year didn’t have a mobile app.
Another reason a brand will lose customers is because it doesn’t respond to their needs. In today’s fast-paced social landscape, customers expect brands to respond to their feedback, and quickly.
97% of customers say they’re more likely to become loyal to a company that implements their feedback. By ignoring them, you’re sending a message that their loyalty doesn’t matter, and with that, they’re likely to move on to a brand that shows them otherwise.
Although ideas about brand loyalty have shifted from generation to generation, people are still brand loyal today. However, you will have to adopt strong social and mobile strategies to retain customers who rely on the internet landscape to make buying decisions.
Let’s have a look at the customer experience and why the need for product experience management.
Truly understanding customer needs may help companies improve not only the buying experience but also their bottom line.
A company’s relationship with its customers is about much more than improving product ratings or decreasing wait times. Understanding the customer journey is about learning what customers experience from the moment they begin considering a purchase, and then working to make the journey toward buying a product or service as simple, clear, and efficient as possible.
Customer experience has become the centrepiece of most marketing strategies today. Marketers have begun to realise that it’s the biggest differentiator a brand or a retailer has in today’s overcrowded market.
A great customer experience starts with a compelling product experience. Customers have their pick of channels, so standing out among the crowd with relevant product information is imperative.
The race to own customer experience is on. Companies are recognizing the importance of delivering an experience that makes them stand out from their competition. Some are learning the hard way.
Finally, my personal opinion is that the subject of whether sustainable competitive advantage has disappeared is greatly exaggerated.
Competitive advantage is as sustainable as it has always been. What is different today is that in a world of infinite communication and innovation, many strategists seem convinced that sustainability can be delivered only by constantly making a company’s value proposition the conscious consumer’s rational or emotional first choice.
They have forgotten, or they never understood, the dominance of the subconscious mind in decision making. For fast thinkers, products and services that are easy to access and that reinforce comfortable buying habits will over time trump innovative but unfamiliar alternatives that may be harder to find and require forming new habits.
Mona K. Sutphen, former White House Deputy Chief of Staff once said:
“Most good relationships are built on mutual trust and respect.”
This powerful statement makes us understand that trust is the glue in the retail customer relationship.