Customer Loyalty In Today's Retail World
The attraction is in the rewarding nature of loyalty which empowers customers through enriching experiences and also allows them to monetize their purchases by way of receiving 'loyalty points', an alternate tangible currency that can be used to shop and re-engage
Sustainability and revenue growth is the core of every business across the world. With the advent of new age businesses, entrepreneurs, and advancement of technological capabilities, it has been observed that there is a dramatic change in consumer behaviour and their affinity to brands, especially in the last decade. This paradigm shift in consumer preferences and adoption has taken place owing to diverse factors like multiple brand choices, extremely attractive value propositions and availability of content 24X7 with access to social media, online commerce, mobile apps, smart devices and wearable technology.
The change is reflected across industry dynamics too with hyper-competitive nature of businesses, the multitude of product choices, price wars, heavy marketing and brand spends and so on. However at the core of all the above is still the 'customer' and the fact that customer retention continues to be one of the biggest challenges to doing business today.
With an informed and discerning consumer at the forefront, brands cannot afford to forego the need to build long-term and sustained loyalty driving stickiness, engagement and repeat business.
Even though the last few years have seen a huge onslaught of customer acquisition focussed hyperactivity, there is a realisation across the board that though top line, valuations and GMV are important benchmarks, however, customer loyalty cannot be treated as a non-existential commodity. And the consumer's journey from the time they are exposed to a brand is an essential part of building brand equity and value in their minds. It is very important for brands to focus on how to better their interactions with the customer, build stronger relationships, and ensure that those relationships generate trust and engagement over time.
Successful marketing entails customer engagement which is that critical edifice on which the customer experience and value are built. Keeping this in mind, brands must go all out to offer a unique and personalised experience to their customers at each touch point in the sales process.
Businesses have deployed smart and innovative ways of engaging with the consumers like introducing the concept of loyalty programs which have met with success. It supports the retailers in effectively attracting, engaging and nurturing consumer relationships. In recent times, we have seen a huge influx in the use of loyalty programs across varied industry sectors and the trend is here to stay.
The attraction is in the rewarding nature of loyalty which empowers customers through enriching experiences and also allows them to monetize their purchases by way of receiving 'loyalty points', an alternate tangible currency that can be used to shop and re-engage.
Having a common denomination as a loyalty reward maximises the relevance of shopping for consumers by recognising individual preferences, providing targeted offers, and delivering unique benefits to ensure repeat purchase. Besides retaining customers based on incentivized shopping, a loyalty program employs consumer analytics to dig deeper into consumer attitudes and needs.
Taking into account the average spends of an Indian household, which is about $1.8 per day, the future of retailing with added benefits of loyalty programs assure customer retention. To create a robust and dynamic customer loyalty program it is essential to ensure they are flexible and easily accessible to the consumer (available on all form factors and devices). In addition, factors like 'relevancy' (ability to collect points in all relevant categories of everyday shopping), 'vitality' (continuous engagement with attractive offers) and 'benefits' (flexible earning & redemption options), loyalty programs can evolve with time to create easy channels for smoother customer interactions.
With the ever-increasing competition and more businesses dipping their toes in the loyalty pool and experimenting with strategies like experiential rewards, and advanced mobile and digital solutions for rewards and benefits, the possibilities for enhanced customer loyalty will only continue to grow. Businesses must leverage a combination of technology, operations, people and a profound understanding of the consumer in this omnichannel environment to ensure that their brand becomes the preferred choice of the futuristic consumer. The key is to marry both the modern and traditional methods of marketing to drive customer engagement and affinity to brands.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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