We are entering the age of relevance. Find out what Matt Ramerman, president of Sinch Engage, said about the era of the marketing loyalty is coming to an end in this article originally published on Target Marketing.
According to a recent Harvard Business Review article, the era of marketing loyalty is over. The opinion piece, written by three senior executives at Accenture, explores marketing as sequential trends that supersede one another.
The authors believe we are now entering a new era of relevance. Briefly, each era is characterized as follows:
- Mass Market (1960s / 1970s) The era of mass production, scale and distribution.
- Segmentation (1980s) More sophisticated consumer research allowed marketers to target customers in niche segments.
- Technological advances at the customer level (1990s / 2000s) in corporate IT have made it possible to target users under the password customer lifetime value.
- Loyalty (2010) The age of CRM, tailored incentives and advanced retention.Of course, it is technology at each of these stages that is the catalyst for change.
- The mass-market era of Coca-Cola and McDonald's was made possible by automobiles, highways, and television commercials. Likewise, the loyalty era, with players like Amazon, was created by sophisticated CRM systems.
We are now entering an era of relevance:
Mass communication with previously unreachable segments. New data techniques are increasingly being deployed that leverage both explicit data—what is known about a customer (name, previous purchases, or contract type—in the case of wireless carriers)—and implicit data—information that can be inferred from behavior.
Data used in this way allows marketers to target individuals by name, based on their unique preferences, while – increasingly – interaction occurs via mobile messaging.
There's evidence that relevance is gaining traction. According to the latest survey from sales analytics firm, Periscope According to McKinsey, personalized messaging triggers action: Consumers' 31% is encouraged to respond to messages about products relevant to their interests; specifically, updates about product availability and price.
So why do so many companies get loyalty wrong? To further reframe the question, in the previous loyalty era, the goal was to attract customers to a brand by providing a reward of some kind, a discount offer, or a free service. This currency was the brand's goodwill, which created a relationship with consumers that compelled them to return.
However, consumers no longer demonstrate loyalty based on these incentives. Rather, they seek out the best deal for themselves in times of need. Enabled by the digitalization of everything and the proliferation of smartphones, spontaneity is the norm.
And with a market flooded with deals and discounts, who can blame them?
Loyalty can be created over a short period of time, with a customer shopping at your store one day, but expecting them to switch to a competitor the next week because a different offering appeals. For businesses, this ultimately becomes a race to the bottom, undermining competition and eroding profits, while goodwill (loyalty) dissipates as quickly as it was created.
A common mistake is for brands and businesses to use loyalty as a short-term tactic, rather than a strategic objective. Loyalty is certainly important, but the mechanics of any given program must change. This means carefully examining the customer journey and identifying opportunities to deliver extraordinary experiences that speak directly to individual customer preferences at the appropriate moments of interaction, not just at the top of the sales funnel.
These could include:
Before a purchase: an offer based on something like cart abandonment behavior. A personalized message could showcase the item (as a still image or video) and provide a link so the customer can find the nearest store or an option to purchase it directly online.
After a purchase: for example, onboarding a new customer who recently signed up for a service. The goal could be a warm welcome, recognition of what a particular customer has signed up for, and guidance on next steps.
As part of the ongoing customer experience:
Rich dynamic messages that augment known metadata with third-party data, adding an additional layer of utility. A personalized notification from an airline, for example, based on a customer's flight information, adds the weather forecast for the destination location.
In other words, building relevance goes far beyond simply offering personalized rewards, blending the customer experience with a host of other goals like onboard product awareness and upgrade.
It's important to note that the more useful the interaction is to the consumer, the more it has the potential to build loyalty. Gartner calls this "tailored help," and 881 TP3T of participants in its recent consumer survey said they hadn't received it; again, they agree.
