What happens when your customers and their needs are constantly changing?
There’s been much discussion on the impact of digital — particularly — how our behaviours are changing in the face of vast choice, with increased expectations that we should be able to get what we want, whenever we want it and however we want it. But, for businesses, the repercussions of this are far and wide. How can brands foster loyalty from a consumer who can — and will — switch to a different product or service without a second thought?
Adobe has been working with Goldsmiths, University of London, over the past few months to find out. You may have already seen Part I in the Reinventing Loyalty: Understanding Consumer Behaviour in the Experience Era report. In this, we found that half of consumers are overwhelmed by choice (46%) and would buy from an unknown brand that offers a better experience (50%). And when it comes to who they’ll spend their money with, consumers first ask:
- Does the experience adapt to my individual needs?
- Is the service available when and where I want?
- Does the brand help me to find the things I want and need easily?
- Does the experience delight me?
Using these insights, the researchers developed a new strategic framework for loyalty. The old loyalty measures of responsiveness, recommendation and retention still apply, but to achieve new loyalty brands need to be thinking about four new dimensions: predictive, prevalent, choice and experience.
Now armed with a view of what the consumer wants, Adobe & Goldsmiths spoke with enterprise marketing leaders around Europe to see how they’re performing against these new measures. The results of which are now included in our report, Reinventing Loyalty — The New Loyalty Experience.
The findings are significant and have big implications for brands and marketers.
Brands need to know the customer much better
The majority (75%) of marketing leaders admitted that they don’t understand the changing consumer and were neutral or negative about how their business performs against the new loyalty framework. And only one in four feels positive about their understanding of the consumer—there is huge room for improvement when it comes to implementing these loyalty dimensions.
Data is driving loyalty through predictive experiences
Almost two thirds (61%) of consumers in this report are loyal to brands that adapt experiences to them. Artificial Intelligence (AI) technologies can be a great tool to help brands achieve personalisation at scale. However, marketers aren’t quite there yet—only a third (32%) are using AI to enhance customer experiences. As AI becomes increasingly sophisticated, ability to use it in creating smart and adaptive experiences will be a game changer for businesses.
The new loyalty framework: Good for business
To test the effectiveness of the new loyalty framework, we asked marketing leaders about their awareness of the new dimensions and how well they were performing. We found that those following these loyalty measures may be outperforming those using traditional loyalty tactics by as much as 14%.
As external factors and disruptive businesses place increasingly more pressure on brands, the ability to use data to improve the bottom line should be welcomed by most marketers.
But how should brands incorporate the new loyalty dimensions to create great experiences? The following best practices should be considered by all marketers as they develop strategies:
- Adapt to the changing consumer: With two thirds (61%) of consumers purchasing products and services that reflect their personal values, brands must help them think ‘this is me’ when buying. Taking an emotional, rather than rational, approach to marketing is vital to achieving this
- Data is good; data science is better: On its own, data isn’t much use. But incorporated into data science techniques like AI, it can help brands tailor experiences to consumers’ needs and preferences—something which drives loyalty in almost two thirds (61%) of people, as long as data usage is transparent (76%)
- Simplify discovery and purchase: Over half (59%) of consumers say convenience is the most important aspect they consider when making purchases. Businesses have to meet them where they are, giving the customer control of their own experience
- Create meaningful experiences: Brands must offer experiences, rather than just products. Using technology to create these is key, whether that’s through making a recommendation or being able to proactively offer something
More than anything, the research showed that the impact of digital disruption has been broad, but there are opportunities for brands that can create tailored experiences. Thanks to data science technologies, this is easier than ever. Brands can scale at speed and approach their customers on a more targeted basis. Developing a culture that puts the customer front and center of every experience is guaranteed to drive loyalty and business performance.
To read the full report, click here.