Your SlideShare is downloading. ×
Acxiom_LOYALTY IN TODAY’S MARKETPLACE DEMANDS BETTER CONNECTIONS WITH CUSTOMERS
Acxiom_LOYALTY IN TODAY’S MARKETPLACE DEMANDS BETTER CONNECTIONS WITH CUSTOMERS
Acxiom_LOYALTY IN TODAY’S MARKETPLACE DEMANDS BETTER CONNECTIONS WITH CUSTOMERS
Acxiom_LOYALTY IN TODAY’S MARKETPLACE DEMANDS BETTER CONNECTIONS WITH CUSTOMERS
Acxiom_LOYALTY IN TODAY’S MARKETPLACE DEMANDS BETTER CONNECTIONS WITH CUSTOMERS
Acxiom_LOYALTY IN TODAY’S MARKETPLACE DEMANDS BETTER CONNECTIONS WITH CUSTOMERS
Acxiom_LOYALTY IN TODAY’S MARKETPLACE DEMANDS BETTER CONNECTIONS WITH CUSTOMERS
Acxiom_LOYALTY IN TODAY’S MARKETPLACE DEMANDS BETTER CONNECTIONS WITH CUSTOMERS
Acxiom_LOYALTY IN TODAY’S MARKETPLACE DEMANDS BETTER CONNECTIONS WITH CUSTOMERS
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Acxiom_LOYALTY IN TODAY’S MARKETPLACE DEMANDS BETTER CONNECTIONS WITH CUSTOMERS

566

Published on

New research indicates when brands don’t …

New research indicates when brands don’t
connect customer data with marketing
efforts, the results are inconsistent
engagement that leads to lost opportunities,
diminished results, eroded margins and
fleeting brand value…engendering a loyalty
divide. Consumers demand better, authentic
connections based on value and brands
must deliver. Savvy marketers blend data
from multiple sources to provide customer
engagement that is authentic, relevant and
consistent to the brand, nurturing comfort,
familiarity, safety and trust – thus increasing
loyalty with their customers.

Published in: Education, Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
566
On Slideshare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
10
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. TheLOYALTY DIVIDE LOYALTY IN TODAY’S MARKETPLACE DEMANDS BETTER CONNECTIONS WITH CUSTOMERS
  • 2. EXECUTIVE SUMMARY New research indicates when brands don’t “The Loyalty Divide” is a follow-up to a previous Loyalty 360/ Acxiom paper titled, “Making Every Interaction Count: How Customer Intelligence connect customer data with marketing Drives Customer Loyalty,” which revealed that brands have the ability to efforts, the results are inconsistent collect a treasure trove of customer preferences, behavioral insights and engagement that leads to lost opportunities, predictive analytics and can apply this soup of information to all customers, diminished results, eroded margins and and not just those in their loyalty programs. However, while marketers fleeting brand value…engendering a loyalty know they need to use data to better retain customers, the reality is most are not making optimal use of it to improve marketing results or their divide. Consumers demand better, authentic customers’ experiences. connections based on value and brands The good news is that marketers are making incremental progress by must deliver. Savvy marketers blend data adopting new marketing technologies and are trying to use customer data from multiple sources to provide customer to improve results and make each customer interaction important. The engagement that is authentic, relevant and desire to do great things with customer data was consistent across the consistent to the brand, nurturing comfort, entire sample. However, desire and ability are not the same. Success is prevented by lack of sufficient funding to access and use precious customer familiarity, safety and trust – thus increasing data. loyalty with their customers. IN THIS UPDATE, WE EXPLORE WHAT SEEMS TO BE A WIDENING DIVIDE BETWEEN MARKETERS AND CUSTOMERS’ PERCEPTIONS OF LOYALTY. BRANDS DON’T OFFER LOYALTY. CONSUMERS GRANT IT. In late 2012, we surveyed 130 marketing executives from a myriad of industries. Nearly three-quarters of respondents were in audience analysis and measurement, with the remainder in broader marketing and sales roles. We inquired how they’re using customer data to understand what’s working, what’s not working, and to identify and share best practices. Our sample included 110 survey respondents, and 20 qualitative interviews with medium and large brands that are successfully innovating in their loyalty programs by connecting customer data with customer experiences. HIGHLIGHTS OF THE RESULTS AND OUR RECOMMENDATIONS FOLLOW.2 Loyalty 360 / Acxiom White Paper • LOYALTY360.ORG The Loyalty Divide Loyalty in Today’s Marketplace Demands Better Connections with Customers
  • 3. DESIRE AND ABILITY ARENOT THE SAMEOUR RESEARCH FOCUSED DEEPLY ON THE TOPIC OF Based on the survey results, we conclude that a narrow focusLOYALTY AND THE CONNECTIONS NECESSARY TO NURTURE on one or two customer data points hinders the business. TheLOYAL RELATIONSHIPS. inability to connect and personalize customer experiences— across channels and partners, and over time is divisive, notWhat enables a brand to do “grand” things for people and nurturing. Not understanding customer motivations andto delight them? What enables individuals to live better and experiences remove us from building connections because wemarketers to perform better? Are these things possible without neither know, engage nor optimize relationships with customers.knowing your customers through data? Does data—gatheredfrom all relevant sources and refined—enable brands to betterengage and optimize the relationship for all? “ AVVY MARKETERS BLEND DATA FROM MULTIPLE SOURCES TO S PROVIDE CUSTOMER ENGAGEMENT THAT IS AUTHENTIC, RELEVANT AND CONSISTENT TO THE BRAND, NURTURING COMFORT, FAMILIARITY, SAFETY AND TRUST” The Loyalty Divide Loyalty in Today’s Marketplace Demands Better Connections with Customers Loyalty 360/Acxiom White Paper • LOYALTY360.ORG 3
  • 4. THE LOYALTY DIVIDE ORIGINATES WITHIN OUR RESEARCH CLEARLY INDICATED ONE KEY CHALLENGE: MARKETERS RECOGNIZE THE BUSINESS VALUE OF ENGAGING WITH CUSTOMERS BASED ON THEIR NEEDS AND EXPECTATIONS, BUT MOST AREN’T GETTING IT DONE. Marketers’ efforts are stymied because brands don’t devote the resources, LOYALTY SHOULD technology or necessary budget. Too often, critically important data is inaccessible and isolated within systems (e.g., service, finance or sales) that FOCUS ON are difficult to integrate with marketing systems. This disconnect creates the divide between loyalty as part of a holistic, customer-centric enterprise BEHAVIOR, AS strategy, and loyalty as an afterthought. Loyalty should always be focused LOYALTY MARKETERS on behavior, as loyalty and engaged brand advocates exhibit a unique and desired form of it for the brands they are engaged with. Disconnected AND ENGAGED customer data leads to disconnected customer experiences, damaging loyalty as a behavior potential. BRAND ADVOCATES EXHIBIT A UNIQUE AND DESIRED FORM ARE HINDERED BY A LACK OF FEEL THE NEED TO ENGAGE INFORMATION OR ACCESSIBILITY CUSTOMERS BASED ON THEIR OF IT FOR THOSE TO CUSTOMER DATA NEEDS AND EXPECTATIONS BRANDS WITH WHICH 56% 66% THEY ARE ENGAGED. OF MARKETERS OF MARKETERS4 Loyalty 360 / Acxiom White Paper • LOYALTY360.ORG The Loyalty Divide Loyalty in Today’s Marketplace Demands Better Connections with Customers
  • 5. SWIMMING IN ASEA OF DATAWhile marketers collectlots of customer data frommany sources, a lack of 68% OF OUR SURVEY RESPONDENTS COLLECT OUTSIDE CUSTOMER DATA FOR THEIR MARKETING CAMPAIGNScoordination and integration 53% DO NOT APPEND OR INTEGRATE 3RD PARTY DATA INTO CUSTOMER RELATIONSHIP MANAGEMENT (CRM) EFFORTS;widens the divide between ISOLATING THOSE RELATIONSHIPS FROM OUTSIDE INDICATORSthe loyalty that companieswant and the potentialloyalty that customers give. 87% DO NOT ACCOUNT FOR THE COST OF SERVICING CUSTOMERS WHEN MARKETING TO THEM; THROWING A BLANKET SPEND OVER THEIR CAMPAIGNS INSTEAD OF FOCUSING ON THE MOST VALUABLE CUSTOMERSMANY MARKETERS ARE MISSINGTHE DEEP, MEANINGFULUNDERSTANDINGS OF THEIR 72% OF MARKETERS DO NOT RECOGNIZE AND LEVERAGE REFERRAL VALUEAUDIENCE—NECESSARY TOPERSONALIZE CREATIVE THAT 94% IGNORE INFLUENCER SCORESENGAGES AND PLEASES. FOREXAMPLE, IN OUR RESULTS: 89% DON’T USE NET PROMOTER SCORES FOR SEGMENTATION AND MEASUREMENT, DISREGARDING SOME OF THE STRONGEST INDICATORS OF LOYALTY THERE AREThe reasons for these lost opportunities to increase customer understanding include; lack of easy access to data (85%), an unfulfilleddesire to locate and access all customer data in a single location (57%), and being limited to only using customer data available athand to drive engagement (46%). ON THE BRIGHT SIDE, OVER 55% OF MARKETERS ARE COLLECTING SOCIAL DATA. BUT,THEY CONTINUE TO STUMBLE WHEN TRYING TO OPTIMIZE THIS INFORMATION WHEN SELECTING AUDIENCES ANDMEASURING RESULTS: HAVE A HARD TIME ARE NOT COLLECTING DO NOT INTEGRATING AND SOCIAL DATA RECOGNIZE THE ACCESSING SOCIAL DATA REGARDING REFERRAL VALUE TO ACTIVATE ALL MEDIA COMPETING BRANDS. 75% 72% 70% The Loyalty Divide Loyalty in Today’s Marketplace Demands Better Connections with Customers Loyalty 360/Acxiom White Paper • LOYALTY360.ORG 5
  • 6. BRANDS THAT LACK BROAD-BASED, HOLISTIC CUSTOMER UNDERSTANDING ACROSS MULTIPLE CHANNELS AND VARIOUS TOUCH POINTS, TO UNDERSTAND THEIR NEEDS AND POTENTIAL LIFETIME VALUE, STRUGGLE TO CULTIVATE BETTER RELATIONSHIPS WITH THEM. Sending irrelevant, inconsistent and disconnected messaging reinforces customers’ perceptions that “brands don’t know me” and fosters large customer disloyalty and margin compression issues. Consider that a majority of our respondents (63%) “always or frequently treat new customers the same when choosing advertising media.” This reflects the bias toward acquisition versus retention. Are we surprised when customers say or act as if “we don’t know them?” Consider that 99% of customers’ activities fall outside of your brand’s touch-points. How valuable would it be to narrow that 99% gap? Some individuals read the newspaper and watch sports while others listen to traditional radio and others subscribe to satellite radio. One engages with Facebook and Twitter while another bounces around the Web unpredictably. Generally, consumers may only engage with 5 to 6 brands in social media channels as they have finite capacities in this arena. Shouldn’t all brands want to be part of their potential best customers’ consideration sets? Certainly! Yet still, social media is not often well-blended into the marketing / loyalty mix because it’s hard for marketers to understand ‘social signals’ and use them appropriately. There needs to be a concerted effort from the brand to converse with consumers vs. just to ‘push’ to consumers. DISCOUNTING ≠ LOYALTY Savvy marketers invest in data analysis “frequently use price discounts” as part of UNDERSTANDING that yields the deep segmentation and their promotion mix. This relegates the issue audience targeting necessary to recognize of trust between the brand and customers as THE WIDE VARIETY OF valuable behaviors when customers will pay secondary in importance. a premium for some things and on other AUDIENCE ATTITUDES Marketers that indiscriminately use price items, won’t budge on price. Understanding discounts underestimate the negative impact AND PREFERENCES the wide variety of audience attitudes and to their retention efforts. If consumers preferences reveals opportunities for brands perceive loyalty as a discount program REVEALS to understand and act upon differences in only, they will buy only when they receive price elasticity. discounts. Thus, marketers actually train OPPORTUNITIES In the early 1980’s, automobile dealers their customers to promiscuously shop FOR BRANDS TO discovered that offering rebates increased based on price alone, instantly dumping automobile sales and changed customer one brand over another, creating a behavior UNDERSTAND behavior, but not loyalty. Customers that a brand will struggle to change. We started to expect rebates and would rarely are taught in Marketing 101 to never focus AND ACT UPON consider a car without one. Yet, 47% of solely on price as a paradigm; it has the DIFFERENCES IN our respondents use “everyday low prices” least amount of cache or uniqueness as a as part of their core brand message, or, differentiator for the brand. PRICE ELASTICITY.6 Loyalty 360 / Acxiom White Paper • LOYALTY360.ORG The Loyalty Divide Loyalty in Today’s Marketplace Demands Better Connections with Customers
  • 7. CONSIDER THE NUMBER OF DAILY DEALS SITES THAT ENTICE MARKETERS WHOCUSTOMERS TO BUY FROM A MERCHANT AT A STEEP DISCOUNT. ARE LIMITED TO MASS MARKETING TACTICSMany first time customers take advantage of be made much more effective if used wisely HAVE VERY LOWthe deal, never to return. A 2012 Raymond in concert with targeting the best audienceJames survey of more than 100 merchants likely to be a repeat customer. RATES OF RETURNfound that 39% of merchants were not likely WITH RELATIVELY Excessive reliance on discounts createsto run another similar promotion for the expectations and reliance on them, which HIGH COSTS. Whatnext couple of years due to the low rate of about loyalty? Forget erodes brand value because it incentivizesrepeat customers. 40% reported this was customers to look for the discount, rather about it. Brands needless effective than other types of marketing than creating loyalty to the brand. Not allwhere if the merchants instead used their to invest in relationships companies have the necessary infrastructuredata to score and target their best audiences, to be the low-price leader. Any customer proportional to thethey would likely have a higher success expected or potential relationship built on low price only lasts untilrate of repeat customers using daily deals. a competitor offers a lower price. return opportunity ofDiscounting isn’t necessarily bad, but could the individual versus the tried and true mass media approach of equal investment into all potential participants.CLOSING THE DIVIDEA sporting goods store might tune its advertising during a down to all of the relevant buying signals. If brands properlylocal sports telecast (e.g., Big Ten Network in the Midwest) and coordinate this information, they can get a more holistic, nuancedthrough online and social media (e.g., NFL.com). However, view of the customer.without access to customer information such as sales data, or, For example, take two customers who spend $200 a month at aadvocates following specific advertised promotions, they will big-box, do-it-yourself store. They may look the same in terms ofcontinue casting too wide a net and investing too much budget the transactional data immediately available from the company’sfor diminishing results. If instead they customized the local systems. One customer spends the same or more at similar storescircular for their specific audience with the right mix of emails and in the area every month while the second customer has a smallerdisplay ads, they may see signs of increased customer activity. overall budget and spends only at that store. Which customerIn the digital age of empowered consumers, companies can’t could be more loyal? Armed with this data, a marketer wouldafford to not have multidimensional insights into their customers’ know that earning the loyalty of the first customer could producehabits and buying behaviors. No one signal will ever consistently more lifetime value than the second.describe or predict consumer behavior, so it’s best to have asmany data elements as possible, then refine that information The Loyalty Divide Loyalty in Today’s Marketplace Demands Better Connections with Customers Loyalty 360/Acxiom White Paper • LOYALTY360.ORG 7
  • 8. OVERALL, BASED ON THIS MOST RECENT RESEARCH AND OUR EXPERIENCE WORKING WITH THOUSANDS OF BRANDS AROUND THE WORLD, WE RECOMMEND THAT FIRMS TAKE THE FOLLOWING ACTIONS TO CLOSE THE LOYALTY DIVIDE: Utilize all available customer data (finance, marketing, etc.) 1 to create useable information. Collect data from outside the brand. Use the combined information to 2 optimize media and campaign decisions. Make sure you can effectively recognize the consumer across all channels 3 and touch points they may have with your brand. Activate and refine insights such as transactional, customer lifetime 4 value and net influencer scores to recognize your lifetime customers and prospects who think, look and act like them. Be aggressive but considerate when gathering customer information. 5 Just because a company can gather information doesn’t mean that it should. Customers will happily provide certain information (e.g., zip code, e-mail) as long as they know how it will be used and what type of value it will provide back to them. But if it is misused, they will quickly distance themselves from the brand. Remember that marketing should be to do things for customers, not to customers. Use data and insights to precisely determine which customers should 6 receive short term rewards (eg. daily deals) while seeking to build long- term trust – this will make your marketing spend more effective. Remember that loyalty marketing is a process. Making sure the data your 7 brand collects is accessible, integrated and usable is the key to refining customer understanding and testing and measuring to get closer to boosting marketing ROI, customer profitability and pricing power.8 Loyalty 360 / Acxiom White Paper • LOYALTY360.ORG The Loyalty Divide Loyalty in Today’s Marketplace Demands Better Connections with Customers
  • 9. ABOUT LOYALTY 360 ABOUT ACXIOMLoyalty 360 is an unbiased, market driven, voice of the Acxiom is an enterprise data, analytics and software as acustomer focused clearinghouse and think tank that is service company that uniquely fuses trust, experience andcommitted to bringing loyalty to the forefront as a critical scale to fuel data-driven results. For over 40 years, Acxiommarketing strategy. A trusted source for cutting edge research, has been an innovator in harnessing every important sourcebest practices, and networking opportunities, Loyalty 360 and use of data to strengthen connections between people,gives members the expert insights and guidance they need businesses and their partners. Utilizing a channel and mediato better understand loyalty and develop programs that neutral approach, we leverage cutting-edge, data-orientedeffectively engage their customers and employees and build products and services to maximize customer value. Everystronger relationships with them. week, Acxiom powers more than a trillion transactions that enable better living for people and better results for our 7,000+ global clients. The Loyalty Divide Loyalty in Today’s Marketplace Demands Better Connections with Customers Loyalty 360/Acxiom White Paper • LOYALTY360.ORG 9

×