Turn the Sieve into a Bucket: 6 Practices for Loyalty Marketing

This week our company held an all hands meeting to celebrate the company's 10 year anniversary.  During that meeting our CEO said something that struck me as odd.  In a nutshell he said "in the past, the industry has been all about signing up a customer and hope you never hear from that custmer again.  That can no longer be the case."

Really? "Hope you never hear from that customer customer again?"  

Is your customer base a sieve?
Source: paulnoll.com

I believe him when he says that.  He's been in the industry a long time and knows that he's talking about.  I'm surprised that was the industry paradigm.  In some ways I understand.  You spend so much new customer acquisition in our industry that there is little leftover to spend on the customer experience.  The problem with that model is instead of creating a bucket to fit your customer base in, you create a sieve.  With a sieve, you have to keep the faucet turned on full blast in order to keep it full. 

Every company needs to invest in their current/recent customers in order to get them to stay.  Here are 6 principles customer marketers should consider when design customer loyalty campaigns.

Onboarding
Make it extremely easy for your customers to understand your product.  I bought an exercise program recently and the instructions were so easy to understand and follow, that it made me stick with it and now I'll consider buying their line extensions because I know that they'll make it easy for me.
Tools to Use:

• Welcome kit or program
• Strong online support or education
• Online community (which helps with other areas as well)
• Easy to get a hold of customer support team

Monitor External Touch Points
You can design the best customer touch point map and optimize to the hilt but you can't control what others say about you.  You have to monitor this closely, even if you work for a cable company and customers have no other choice if they want cable TV. They may not have a choice now but a disruptive technology could come along and your customers are just looking for an excuse to adopt it.  Don't make your reputation be the reason customers leave, it's lazy!  Also, mistakes happen but just don't do the things that cause negative PR.

I'm a believer in responding to negative press or comments.  You can control your response.  Don't get in an argument but your customers will look past the bad PR if they can see you are aware and you are addressing it.

Regular (but relevant) Communication
Keep in touch with your customers on a regular basis but make sure the information is relevant and timely.  You run the risk of customers tuning you out if you over communicate with junk information.  Asking customers what they want to hear about and how often is a good thing.  Don't be afraid to ask. 

A good customer marketing manager with strong analytical skills will survey their customers, monitor website and email activity in order to find patterns in what customers are looking for.

Listen to Your Customers
I touched upon this in the previous section but it is huge.  You have to listen to your customers through surveys, email responses, and customer care calls.  I've talked about this in a previous posts as well (surveying customers when they leave and Running a VOC meeting) but a good voice of the customer program can drive loyalty marketing campaigns, not to mention process improvement.

Advice: Be best friends with your customer care management.  They listen to calls all day long and can give you good feedback.

Create Added Value
Brand development means just as much to current customers as it does for new ones.  The obvious answers here are introducing new products or loyalty discounts but can you create non-tangible value? 
What about aspirational value or value through pride? 
Do your customers brag to their friends that they are a customer? 
Do they defend you to the death and think your competition is inferior and anyone who uses the competition is soft-in-the-head? 
Does your brand mean something more than what it is?

The best companies can add value in non-tangible ways (and they rarely have to offer discounts which is an added bonus). 

Read Malcolm Gladwell's "The Tipping Point" to learn about Airwalk's mistake of ignoring their core customers.

Get Your Customers Involved
The last leg of the customer lifecycle is "advocacy."  Active customers are advocates. Customers who refer friends are advocates.  As I mentioned earlier, developing a community of your customers where they can connect with one another is huge in getting your customers involved.  You can also leverage that community to get new customers but it seems consomer are relying more on word of mouth as a main vehicle for selecting products and services. 

Conclusion
I believe comprehensive plans never work almost everytime.  Most plans are abandoned once you realize you didn't account for something you never would've known about in the first place.  Having a general strategy is the best approach.  Always watch your data, beware of confirmation bias, optimize performance, and constantly tinker.  I hope this practices help you when you are organizing your customer loyalty campaigns.