A New Day, A New Model, A Perennial Truth
Posted on: Wednesday 10 April 2019 | Jed Mole, VP Marketing, Acxiom
As the battle for consumer loyalty rages on, we look to brands past, present, and future for some clues as to what works.
Those were the days
Back in the halcyon days of advertising-led marketing, customers would find a brand they liked – from washing powder, through to banking – and if they found that it passed ‘the Ronseal test’ (i.e. it did what it said on the tin), they stuck with it. In the absence of a brand failing or a dramatic price promotion from a competitor, people were likely to stay loyal to ‘their’ brand, sometimes for life. As time moved on, branded competition grew and, in the Mad Men era of advertising, creative straplines, jingles and visuals reigned supreme in the battle to change a customers loyalty.
Towards the end of the last century, companies looked for new avenues to secure this loyalty. Loyalty cards and reward points proliferated across retail and services. A new nature of relationship developed between customer and brand. Customers felt they were getting something extra, whilst businesses were better able to collect customer data. At the time, it was a very successful strategy, enabling businesses to better understand customers, what they purchased, and why and what drove them. Loyalty schemes could be simple such as collect nine stamps from nine cappuccinos and the tenth was free, but they could also be hugely complex to create and manage, such as those offered by some major stores and supermarkets. It was important to match the right loyalty programme to the right business.
As the digital revolution advanced, customers started not only purchasing online, but also researching and comparing all manner of products and services. Via the mighty power of Google, Amazon, and eBay, brand loyalty was greatly eroded by the ease of price comparison and alternatives. Indeed, many well-known brands were lost and continue to fail as the retail-consumer dynamic continues to change.
At present the loyalty landscape is more complex than ever. According to the Communications Market Report (Ofcom, August 2018), the average British adult is now online for around 24 hours a week, mainly due to smartphones, which are now used by 78 per cent of the population. The ubiquitous use of smart phones now empowers customers to, with just a few taps, make buying decisions and purchases whenever and wherever they like. Advertisers have noticed this and have adapted accordingly. Mobile now accounts for almost half of all digital Ad Spend, according to recent research from IAB UK and PwC (Mar 2017). Smartphone advertising grew 37.4 per cent to account for 45 per cent of all digital ad spend, according to the report.
Whilst this presents great opportunities for businesses, it also presents great challenges, not least of which is figuring out exactly what kind of real-world customer experience people expect; those who think it’s just try-before-you-buy are thinking far too narrowly. Customers increasingly want a lot more. They expect a relevant, seamless experience across all channels of a business with which they engage. They’re far more likely to be loyal to those companies that provide them with such an experience, rather than a brand or service itself. The better the customer experience, the more engaging, the easier, the more relevant and ubiquitous, the greater the loyalty. Loyalty is certainly more complex these days. So, how can a company not only win customers but also encourage loyalty?
Steve Jobs said “get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.” For loyalty and Marketing, it’s a case of going ‘back to the future’ and taking note of what Mr Jobs said, because it is about knowing your customer. Only then can you hope to market with relevance, and create a great customer experience. Only then, can you really expect to earn their loyalty. But in today’s world, knowing your customer means turning data and technology into people.
But due to the sheer variety of technology and data, and because of the rising consumer and regulatory expectations, getting the right data can be tricky. But once you have the right data, getting the data right is next. Some assume it’s about building one marketing stack or replacing all legacy systems with whatever’s new. There will always be ‘the latest thing’ and trends to approach marketing technology one way or another. However, one perennial truth, is the importance of eliminating data siloes, physically or virtually, to connect at the data layer. Remember, the customer is the data and the data is the customer. It’s not about connecting IT, it’s about creating a unified data layer that focuses first on understanding the customer regardless of the combinations of data sources and technology brands. A unified data layer allows the marketer to use that customer understanding to make marketing more relevant, deliver the best customer experience and to earn loyalty through it.
There are many ways to use data to drive value in both simple and sophisticated ways across the online and offline channels. Attribution and measurement and trending now while customer journey mapping is an evergreen quest. Even when the right data is being used in the right way, you need to be secure in the knowledge that all you do with data is legal, fair and just. Ethically sourced data being used in ethical ways, to drive customer satisfaction with regards to your business practises. Loyalty may take many new twists and turns but data, technology and ethics, will sit at the heart of what it takes to win and keep customers’ hearts.
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