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Customer loyalty, where perception is reality

Mobile, digital and social are the future of marketing, but how do we leverage these channels to build customer relations?

At Marketing’s third annual Customer Loyalty conference, a range of brands and industry experts gathered to find out.

With the ever-evolving digital landscape and media fragmentation, delivering a consistent and remarkable customer experience is becoming more complex.

Darren Fifield, head of marketing solutions for eBay Enterprise Asia Pacific, believes mobile is key to that experience.

Mobile phones, he says, are a crucial part of our daily lives with 84% of consumers unable to go a single day without their mobile device – while 75% of consumers use their phones on the toilet.

Fifield explained a more dynamic consumer has emerged and the way they shop has drastically changed, setting aside old retail behaviours and developing new shopping habits.

In the old days, he said, everyone was stuck in their swimming lanes and consumers were easily marketable and predictable.

But now, customers don’t neatly swim in lanes all the time. Subsequently, it has also changed how retailers need to market to them.

With the adoption of mobile devices, disruptive technologies and new channels, the key thing for marketers is to be able to understand how their interactions are influencing consumers.

“More than 84% of consumers believe that retailers should be doing more to better integrate their offline and online channels,” Fifield said.

Hence, the experience from online to offline must be consistent, because “your customers could be coming from various channels and devices, and you need to be ready and facilitate the consumer experience”.

While many brands extend their footprints on social media platforms, Matthew Lee, head of CRM at Fimmick, argues most brands and companies do their marketing campaigns very well on social and receive quite a lot of positive comments from customers.

However, he said, most of the campaigns were one-off based and disconnected with their current CRM data.

It is therefore crucial to have an “always on” concept with the help of social CRM enablers to keep their most passionate customers buzzing.

But creating a valuable loyalty programme requires a digital technology platform. Other than deploying the RFM model (recency, frequency and monetary value) to analyse customer value, Lee suggests combining VAS (viral power, activeness and sentiment) to identify those customers.

By combining both RFM and VAS, he explains companies can identify different types of customers with the ultimate goal of driving advocates.

Keeping track of factors such as customer behaviour, social interactions, external factors and click-throughs, “we know when it is the best time to post and get consumers’ attention; these are the types of data that drive revenue”, said Lee.

To create an effective loyalty programme, Paul Martin, VP of information technology for Asia Pacific at Aimia, suggests it can be improved by applying digital technology.

He says analytics technology can map a customer journey to desired behaviours. For example, brands can first break down the data silos and leverage analytics to identify high-potential customers.

After that, they can deliver personalised, relevant and unique deals to meet customers’ needs.

In the age of data, most marketers believe the more data they get, the more returns they can have. But companies have to use the data responsibly to make the experience relevant.

Martin reveals 80% of Millennials will share a lot of personal data, but they will lash out if that data is misused.

Besides making security arrangements to protect the personal data, brands should also let customers have control over what they provide, how it is used and how it is shared.

In the fast-moving digital and mobile-first landscape, customers are evolving rapidly. Martin Benda, global business development manager at Aimia, suggested brands have to stay relevant with customers to keep moving to the beat of their drum.

To achieve this, he says brands need to create an effective customer strategy by integrating loyalty programmes, data analytics, data mining and new technology to re-target or retain existing customers.

Xen Chia, strategic marketing director of XGATE, talks about the effects of social media on customer loyalty and the challenges of managing big data for CRM managers.

He says utilising social as a strategic tool to harness loyalty matters, as the future of digital marketing belongs to brands that can use marketing automation effectively to create different segments of leads, convert leads to customers and build customer loyalty to maximise their lifetime value.

It is commonly believed that repeat customers are valuable. Seema Roy, director of marketing of Asia Pacific at Preferred Hotels & Resorts, shared an 80/20 figure at the conference which may support this notion: 80% of future profits coming from 20% of the loyal customer base in the hotel industry.

On the other hand, repeat clients spend 33% more than the new ones on average, Roy added.

She explained repeat customers tended to spend more and stay longer, and if they loved a programme, they shared that love and loyalty within their network.

Since her company doesn’t own or operate any hotels, but only provides points-based loyalty programmes for independent hotels, Roy understands the company needs to engage its members better.

It brought on one marketing automation partner Marketo, enabling the company to collect users’ data and target relevant marketing messages across websites, email, social and display advertising.

“In today’s world, loyalty isn’t just driven by benefits; it’s driven by the customer experience,” she said.

“It’s important to us to set the groundwork for that experience from the dreaming stage all the way to the booking stage.”

To increase the customer offering, Stephanie Kelly, fair director of Affordable Art Fair Hong Kong, says corporates can add value to customer loyalty through external partnerships.

Kelly says it is important to make customers proud to be associated with the brand, because “people will forget what you said, people will forget what you did, but people will never forget how you made them feel”.

After attending the Affordable Art Fair, its sponsor’s customers rated the event higher on all attributes, including NPS (net promoter score) because it created delightful and unique experiences for them, she added.

Pure Group International’s director of customer experience Cristiane Ross echoes the same opinion.

She thinks creating a positive member experience builds customer loyalty because loyalty is all about an emotional connection with its clients.

Establishing VIP programmes not only helps to enrich and capture customer data; it can also reward loyal customers in a simple and easy way.

Sheila Chan, head of PR and special projects at Cafe Deco Group, shared that her company relaunched its VIP programme for its existing and new customers in 2013.

The result was encouraging: an almost 15% increase in the total number of VIPs compared with the same time in the previous year, and it also drove more than HK$2 million in additional revenue during the promotional period.

She also said that brands needed to put customers first because “the customer’s perception is your reality”.

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